Japan hopes new leader can deliver

Koizumi will be named Japan's 11th leader in 13 years on Thursday

By staff and wire reports

TOKYO, Japan -- Junichiro Koizumi says his victory in the race to lead the ruling Liberal Democratic Party is a revolution for Japanese politics.

Japan is waiting and hoping. The soon-to-be Prime Minister will have to deliver quickly to a nation beset by economic woes and leadership failings.

He has the backing of business. But apprehension was growing in some parts of Asia that Koizumi was hawkish on defense.

VIDEO CNN's Marina Kamimura talks about change that could occur with Koizumi as prime minister Play video (QuickTime, Real or Windows Media)   AUDIO Junichiro Koizumi at his first press conference as President of Japan's governing party. 2.99Mb/4:44 min. AIFF or WAV sound CNN's Marina Kamimura discusses the change in leadership of Japan's Liberal Democratic Party 1.14Mb/1:41 min. AIFF or WAV sound   ALSO TIMEasia.com: -- 'People Believe I Can Change Japan'

China on Tuesday urged him to to back away from campaign pledges to visit a controversial war shrine and to acknowledge Japan's wartime aggression.

Koizumi defeated former premier Ryutaro Hashimoto -- the favorite of the LDP old guard -- 293-155 in Tuesday's party election. On Thursday he is to be voted in as prime minister by the LDP-dominated Parliament. His victory came on a groundswell of support in a weekend vote by grass-roots party members.

At his first press conference after election as LDP president, reporters asked for details on his policies. The charismatic dark horse gave few clues. Pressed on his economic revival plan, Koizumi smiled -- and dodged: "I haven't decided on my Cabinet yet, so I can't say."

He also appeared to soften his stance about breaking with old-style LDP dealmaking.

"Politics is about compromise, people say. Sometimes I'll have to compromise. Sometimes I'll have to push my views," he said.

Straight talk, common touch

For now, Koizumi, 59, appears to have captured the hearts of many people with his straight talk and common touch.

A divorced father, he represents a less tradition-bound Japan. He's a rock music fan. His long silvery locks and sharp ties set him apart from his staid LDP colleagues.

But analysts expect that the LDP has so alienated the public with corruption scandals, opaque policy making and economic bungling that any honeymoon for Koizumi will be brief.

The reformer's challenge is all the more formidable because parliamentary elections are slated for July. That means he has to deliver results fast.

Koizumi promised to take a bold approach to reform, but was vague about whom he would name in his cabinet and exactly how he planned to lift Japan's economy out of its decade-long downward spiral.

"No one expected that I would be chosen as president of this party, so this is kind of a revolution in the LDP," Koizumi said.

Koizumi defeated former Prime Minister Ryutaro Hashimoto in the two-tiered vote, which included 141 ballots divided up among the party's local chapters and 346 votes cast Tuesday by its members of parliament.

Koizumi won 298 votes, to 155 for Hashimoto. A third candidate, Economy Minister Taro Aso, had 31. Koizumi needed a simple majority of 244 votes to be elected.

Asked exactly what measures he would take to revitalize Japan's economy, Koizumi answered: "First of all I have to establish a new cabinet. I have to think about who will be appointed, and then I have to consult with the economics minister about that."

Later, he added: "As I have said, I would like to bad (banking) debts within two or three years, however it will be accompanied by some pain. It is necessary to think of some measures for that. It's also necessary to create new industry and new jobs."

Koizumi's "Change the LDP, Change Japan" platform won resounding support from local party members deeply afraid of losing an election for parliament's Upper House in July, but left many analysts unsure how it would play out in concrete policies.

"I am different from other candidates and that has been supported by all the members, many of the members of the LDP, that is why I have been chosen as the party president of the LDP," Koizumi said. "We have to change the old-fashioned structure."

Lack of clarity

Richard Jerram, an economist at ING Barings, has said Koizumi's monetary policies lack clarity, making it impossible to predict how his success will affect Japan's ailing economy.

"His economic policy has been vague, contradictory and frequently changing, but the market's taking the view that anything is better than what we've had so far," he said.

"He's seen as the only person who offers anything radically different and therefore it's probably a good thing . . . but so far it's impossible to say what all this means because we don't know exactly what he's going to do."

Business interests welcomed Japan's new leader with optimism. But all eyes are now on how far Koizumi will be able to push reforms.

"He is at heart a radical reformer, and I don't have many doubts about that," said Garry Evans, Japan equity strategist with HSBC. "The question is whether he sticks to his principals and . . . whether he's able to push through what he wants to push through."

On Tuesday, Koizzumi defended visits to a Tokyo shrine honoring Japan's war dead, including World War II war criminals. The visits are opposed by South Korea and China, who suffered under Japanese aggression in the first half of the 20th century.

"It is China's persistent stance to oppose visits to the Yasukuni Shrine by Japanese political figures," Foreign Ministry spokeswoman Zhang Qiyue told a news conference.

"A responsible statesman should take concrete actions to show his sincerity and attitude towards Japan's history of aggression against some Asian countries, including China," she said.

Needs full support

Koizumi's success as leader will depend on how much support he receives in the LDP, Jerram says.

"The number of votes he got suggests that followers of (contender and conservative LDP policy chief Shizuka) Kamei voted for him.

"This is going to be the next key thing to watch for. If Kamei gets a serious position in the new set-up you're already going down the path of pragmatism leading to re-written promises.

"It would be very, very negative for the market if Koizumi gives Kamei a serious post, because Kamei has been almost the antithesis of Koizumi," Jerram said.

Officials from the Koizumi and Kamei camps struck a nine-point policy accord late Monday in a move that could lay the ground for their cooperation. But it also hints at less than complete reforms.

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Liberal Democratic Party of Japan
Japanese Prime Minister

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