Foreign minister looks set to succeed Hosokawa

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TSUTOMU HATA, Japan's Foreign Minister, appears set to become the country's next Prime Minister in a compromise deal that will leave the nominally reformist government even weaker and more at the mercy of obstructionist bureaucrats than before.

Mr Hata, who flew to Morocco yesterday for the signing of the Gatt world-trade pact, is likely to be confirmed as Prime Minister by the upper and lower houses of Parliament on Monday, after his return.

The political inertia that has gripped Japan could not have come at a worse time, as Tokyo is facing the serious prospect of a trade war with the US unless it moves to open its markets to imports more quickly. But deregulation needs strong political leadership - and that, for the time being at least, is nowhere in sight.

Mr Hata will replace Morihiro Hosokawa, who led the government for eight months until he announced last Friday that he would resign because of persistent accusations of financial wrongdoing.

This led to a fierce political squabble over who should succeed him among the seven-party coalition, which demonstrated vividly the petty factionalism and short- sightedness that continues to dog politics despite an overwhelming public mandate for real, systematic reform.

A serious rift between the Socialists and the right-wing parties of the coalition, including Mr Hata's Shinsei (Renewal) Party, was apparently patched up early yesterday when in secret talks the powerful position of Cabinet Secretary was offered to the general secretary of the Socialists, Wataru Kubo.

The deal was reportedly arranged by Ichiro Ozawa, who holds no official post in the government but has emerged as the most influential power-broker within the coalition. The smaller Sakigake party, led by Masayoshi Takemura, continued to resist the appointment of Mr Hata as Prime Minister.

But after the Socialists had been co-opted by Mr Ozawa, Mr Takemura was looking increasingly isolated, and was thought likely to bow to the inevitable for the time being. However, the strains within the coalition will make it difficult for the government to introduce any significant reform or deregulation measures, despite urgent calls from Japan's trading partners for it to do more to open its markets and reduce the red tape tying up foreign companies attempting to do business in the country.

But in the longer term the fall of Mr Hosokawa and the further loosening of the ties between the rainbow coalition of Socialists, conservatives and a Buddhist party will be seen as another step towards a new political structure for Japan.

The coalition had only ever been intended by its architect, Mr Ozawa, as a convenient vehicle to end the four decades of uninterrupted power of the Liberal Democratic Party (LDP).

To promote his vision of a more consumer-friendly, internationally engaged Japan, Mr Ozawa knows he will have to exclude at least the more eccentric left wing of the Socialist Party - which still, for example, recognises North Korea in favour of South Korea.

Even before Mr Hosokawa made his surprise resignation announcement, Mr Ozawa had been holding a series of discussions with like- minded conservative politicians, both from within the seven-party coalition and from the LDP, on the setting up of a single, unified party to fight the next elections.

Already one of the main faction- leaders of the LDP, Michio Watanabe, has shown interest in quitting the party and linking up with Mr Ozawa - in exchange for a term as Prime Minister.

Mr Ozawa, however, needs to hold the coalition together long enough for electoral-reform measures to be implemented - if elections were held now they would be conducted under the old multi-seat constituency system, which favoured the LDP's style of money politics.

The new system of single-seat constituencies will not be drawn up until October, and Mr Ozawa is determined not to be forced into new elections too early.

But while the man they call 'Steel Arm' is preoccupied with factional politics and realignments, the Japanese government will continue to project an all-too familiar image of indecisiveness and lack of direction to the outside world.