Japan's PM can only offer vague promises

RICHARD LLOYD PARRY

Tokyo

The Diet yesterday convened what promises to be one of its tensest and most unpredictable parliamentary sessions for years, with a speech from the new Prime Minister, Ryutaro Hashimoto, which promised an invigorated economy and an active foreign policy, but shied away from issues which will dominate the 150-day sitting.

Mr Hashimoto's election on 11 January, in place of the Socialist, Tomiichi Murayama, marked the return to power of his Liberal Democratic Party (LDP) after 19 months in the back seat of Japan's three-party coalition. It also signalled the start of serious electoral sparring between the LDP and the Shinshinto (New Frontier) party, the main opposition group, led by former conservative colleagues of Mr Hashimoto.

The next election will be the first to be held under a reformed first- past-the-post system, intended to eliminate corruption and promote competition among the parties. As a side effect it is also likely to cost half of incumbent Diet members their seats. To add to the uncertainty, voter apathy is at an all-time high: for the last parliamentary elections, to the Diet's Upper House, turn-out was less than 50 per cent.

The election must be called by the middle of 1997, but the Shinshinto opposition, led by Mr Hashimoto's former colleague, Ichiro Ozawa, is noisily demanding an immediate poll, which many commentators expect as early as the spring. The quiet hysteria which this prospect is provoking will leave little room for the concerted development of policies outlined yesterday by Mr Hashimoto.

"There are many changes that must be made, like it or not, in all aspects of society," he declared, "to cope with the collapse of Cold War structures, the borderless economy, Japan's enhanced global status, and other international changes." More than a year after the end of a painful recession, he promised full economic recovery by the end of 1996, and renewed deregulation, including a strengthening of the Fair Trade Commission, a notoriously toothless body in highly regulated Japan.

None of this amounts to more than a restatement of previous government policies. On foreign affairs, he was content to ape the vague affirmations of his predecessor: "active initiatives" in international peace-keeping, and the "consolidation and reduction" of unpopular American bases on the island of Okinawa.

The part of his speech which won most attention concerned a group of seven housing loan companies, whose prostration beneath a burden of bad debts has become the government's biggest policy headache. The companies, known as jusen, sowed the seeds of their own doom in the 1980s with a series of rash loans to companies, many of them associated with gangsters, and LDP politicians. The government's decision to bail them out with 685bn yen (pounds 4.3bn) of taxpayers' money has provoked fury and has been seized upon by Shinshinto as its principal weapon against Mr Hashimoto, who none the less reaffirmed his intention of pressing ahead with the plan.

But the opposition has its own Achilles heel in the form of Soka Gakkai, a Buddhist lay organisation which campaigns on Shinshinto's behalf. The millions of votes it can mobilise among its members represent a serious threat to Mr Hashimoto. The LDP's efforts to capitalise on a growing public perception of Soka Gakkai as a sinister quasi-political force will demand far more of Mr Hashimoto's energy than the worthy nostrums trotted out yesterday.