JIN-245 -- Is the Latest Koizumi Comeback the Real Deal?

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Issue No. 245
Wednesday, September 24, 2003
TOKYO

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CONTENTS

++ Viewpoint:
Is the Latest Koizumi Comeback the Real Deal?

>> Noteworthy News
-- Japan's First Defrosted Baby

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++ Viewpoint:

Is the Latest Koizumi Comeback the Real Deal?

On September 20, Japan's Prime Minister, Junichiro Koizumi, surprised
no one when he saw off a leadership challenge from within his own party
and secured a three-year term of office. Two days later, he undertook
a major cabinet reshuffle, and conversation in the corridors of power
has turned to speculation of a general election in November.

Koizumi was reelected president of the ruling Liberal Democratic
Party (LDP) with 399 votes, or 60 percent of the combined 657 votes
cast.

The electorate consisted of 357 LDP Members of Parliament (MPs)
and 300 ballots covering 1.4 rank and file party members.

Despite the considerable margin of victory over his three
challengers, Koizumi remains a leader with powerful enemies.
His win may make him appear secure, but questions remain over
how tightly he is actually holding the reins.

A closer look at the breakdown of the voting reveals a more worrying
message. Less than half of the votes for Koizumi came from MPs -・
and the news that mere rank and file members approve of the PM is
nothing new.

The 194 votes he did win from the MPs is well below the 230 it was
thought he would have secured.

But Koizumi's charisma and huge public approval ratings force
his enemies within the LDP to support him until the general
election is over. The big question is how long he can survive the
aftermath.

The breakdown of the voting did, however, reveal very clearly the
cleverness of Koizumi's political engineering. He leaked word of a
reshuffle and an imminent general election. The fear of being punished
in party personnel affairs and branded as an anti-reform legislator in
front of an electorate desperate for economic recovery forced many
MPs -- even in the factions openly hostile to Koizumi -- into voting
for the premier.

The reshuffle itself sent mixed messages. Koizumi's supporters see
the new line-up as a sign that the Prime Minister has finally broken
the stranglehold of LDP factional politics. His opponents believe that
the reshuffle points to rifts within the party that can now only
deepen.

The two most obvious features of the reshuffle were the names Mr Koizumi
did not replace. The career bureaucrats Yoriko Kawaguchi and Heizo
Takenaka will remain in their respective posts of Foreign Minister
and Minister for Financial Services and Fiscal Policy. During the
leadership race it was widely assumed that the PM had been forced to
buy・the votes of the hefty 113-strong faction led by Mikio Aoki with
a promise to remove Takenaka ・ a man highly rated by investors,
but detested as a maverick in many corners of the LDP.

Takenaka is the man most closely associated with the controversial
no gain without pain・structural reforms aimed at fixing Japan's
battered banking system and wider economy.

Similar rumors surrounded Kawaguchi, whose line on North Korea and
Iraq has also made her unpopular with some. Their retention in the
cabinet is taken as a sign that Koizumi, with his very considerable
public popularity, has attained enough political escape velocity to
break free of the factional system.

There is further evidence to support the view that Koizumi has, unlike
so many of his predecessors, carved a position where he can make his
own choices. The position of finance minister vacated by the 81-year
old Shiokawa, was filled by Sadakazu Tanigaki, a Koizumi man and an
incumbent cabinet member serving as chairman of the National Public
Safety Commission.

But other appointments have provoked doubts. As a precursor to the
reshuffle, Koizumi made his first bit of business the appointment
of Shinzo Abe to the LDP No. 2 position of party secretary general.
At 49, Abe is among the youngest ever to take the post, and is
popular with the Japanese public for his work with Koizumi on
North Korean issues. The fact that Abe's promotion involved the
removal of one of Koizumi's oldest allies has prompted speculation
that what the PM most fears is a split within the party -- or, more
specifically, a collapse in his administration, as malcontents defect
to join up with the Democratic Party of Japan.

As a senior economist at CSFB argues: "The conduct with
which the party elections were carried out certainly did nothing to
dispel those worries."

The wider question posed by Koizumi's victory is how far it
threatens the fabric of the LDP itself. Koizumi has already pledged
to "demolish" the LDP, if necessary, to carry out his reforms. Many
believe that the process is already well underway.

-- The Editors

**FOR MORE:

"The Koizumi Cabinet: Sheep to the Slaughter," from
J@pan Inc magazine, January 2003:
http://www.japaninc.com/article.php?articleID=974

"Japan is Back, and Koizumi Rules," from the Asia Times:
http://www.atimes.com/atimes/Japan/EI23Dh04.html

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>> Noteworthy News

-- Japan's First Defrosted Baby

In Brief: Today's Yomiuri Shimbun reports that Japan's first defrosted
baby was born at the Suwa Maternity Clinic in Nagano. Its mother is
a woman in her 30s whose eggs were frozen and stored -- then
fertilized at a later date in a process known as "vitrification."
The baby is only the fifth successfully defrosted birth worldwide.
It is reportedly healthy and growing, with a birthweight of
approximately 7 pounds.

Comment: The sociocultural, economic and philosophical implications --
not to mention the commercial prospects -- of this event are enormous.
As more young and even middle-aged Japanese women opt for careers over
connubial bliss (or blandness), the option to freeze and defer one's
more fertile years becomes ever more attractive.

The nation's steadily declining birthrate is one of its greatest
economic challenges, as a shrinking domestic labor pool and consumer
base spell potential disaster in the coming years. Women need to
be given the incentive to reproduce with some buffer of career and
consumer convenience. And in relatively irreligious Japan,
opposition from entrenched fundamentalists of any stripe is
virtually nonexistent.

In her capacious, in-depth report on Japan's (and Korea's) rising
vitrification industries -- published in our June issue (story link
below) -- journalist Mayumi Saito interviews obstetrician Yahiro Netsu
at the Suwa clinic in Nagano, revealing that the major stumbling
block appears to be the government's conservatism and befuddlement
in the face of yet another biotech milestone.

**FOR MORE:

"Here Comes the Egg Biz," from J@pan Inc magazine, June
2003:
http://www.japaninc.com/article.php?articleID=1108

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Written and edited by Roland Kelts and
Leo Lewis (editors@japaninc.com)

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