New Japanese prime minister at a crossroads
Japanese people expect a brighter future under their new Prime Minister who represents perhaps the best chance for the ruling Democratic Party to begin pulling the country out of stagnation.
Yoshihiko Noda became Japan's sixth Prime Minister in five years on Tuesday, confronting a mountain of challenges including coping with a strong yen that threatens to hit exports, forging a new energy policy while ending a crisis at a crippled nuclear plant, rebuilding Japan's tsunami-devastated northeast and finding funds to pay for that and the vast security costs of an ageing society.
The former finance minister took the place of Naoto Kan, who resigned after just 15 months in office with rock-bottom poll ratings.
While tackling numerous ills afflicting the world's third-biggest economy, Noda must first unify warring factions in his own party and win over the opposition, which can block bills in parliament.
Noda, 54, stressed he was an ordinary man without political populist power or looks, and promised to be a peacemaker who would unite the deeply divided party and seek to engage the opposition.
The new administration must break free from the troika era led by former party leader Ichiro Ozawa, former prime ministers Yukio Hatoyama and Kan.
In a speech before the runoff vote, Noda expressed support for an accord among the DPJ and the opposition Liberal Democratic Party (LDP) and New Komeito on certain key policy issues.
"Will the Diet be able to go forward if we ignore the three-party agreement?" he was quoted as saying by the Daily Yomiuri Shimbun. "Won't a new administration grind to a standstill if we ignore it?"
Noda on Wednesday unveiled appointments for key party positions in a balancing act that aims to build unity.
Noda picked Azuma Koshiishi, leader of the caucus of its legislators in the opposition-controlled House of Councillors, for the party's secretary general.
"I believe he has power to bring together all lawmakers, not only in the upper house," Noda was quoted as saying by Kyodo.
The 75-year-old heavyweight, Koshiishi, a loyalist of key player Ichiro Ozawa who did not back Noda in the election, said he had accepted the offer after deep consideration and would strive to unite the DPJ.
"I'll make every effort to restore harmony within the party," Kashiishi said.
Noda also named Hirofumi Hirano, 62 – a close aide to Ozawa ally and ex-premier Hatoyama – to an influential post, that of the DPJ's parliamentary affairs chief.
Noda also gave the post of DPJ policy chief to one of the four candidates he defeated in Monday's ballot, ex-foreign minister Seiji Maehara.
Half a year after Japan was hit by the March 11 quake and tsunami, the Fukusima nuclear crisis continues and operator Tokyo Electric Power Company will struggle to bring the reactors to cold shutdown by January.
The radiation that has escaped from its reactors have driven more than 80,000 people from their homes, made some rural areas uninhabitable for years, and contaminated food supplies.
The country faces a public debt mountain twice the size of its US$5 trillion economy, the legacy of years of stimulus spending, and the debt is set to grow as Japan rebuilds its disaster-hit areas.
On top of the sadness, the economy has been hit by a strong yen, which has soared to post-war highs as a safe-haven currency amid global market turmoil, hurting Japan's exporters by making their goods less competitive.
As finance minister since June last year, Noda promoted raising taxes rather than borrowing to pay for quake and nuclear disaster relief, and to reduce the what is the highest debt-to-GDP ratio in the industrialised world.
"We still have problems with the yen's appreciation and with deflation," Noda told AFP. "On the topic of fiscal discipline, we need to carry out careful management of the economy and public finances."
To secure enough revenue through tax increases, consideration should be given to not only hikes in income and corporate tax but also in consumption tax.
Noda needs to regain public confidence and his ability will be tested over how to overcome strong opposition to tax increases within his party and to raise taxes through talks between the ruling and opposition parties.
Noda's party rivals in the race for prime minister were opposed to raising taxes to pay for reconstruction. They agreed on the need to raise the sale tax but were more cautious about the timing.
Opposition parties are also against a reconstruction tax but the main opposition group, the LDP, is on the same page as Noda on a sale tax hike.
Before Noda can embark on drastic fiscal reforms, however, he will need to ensure that his policies will not fall flat from the beginning due to a stubborn opposition bloc, as seen through the leadership eras of Noda's predecessors, Hataoyama and Kan.
On the foreign policy front, Noda, is known to be a strong supporter of the alliance with the United States. He has stated that the US-Japan security alliance is the core of Japan's diplomacy and an ally alongside key players in the Asia-Pacific region.
As top priorities, Noda has indicated he will work to compile and pass the third supplementary budget for fiscal 2011, aimed at a fully-fledged reconstruction from the disasters, while trying to build good relations with Japan's opposition parties for the time being.
A recent poll in the Daily Yomiuri Shimbun put Noda's public support rating at only 9 per cent but markets and industry leaders see him as a safe choice.
There are high hurdles for the Government to cross and policy problems amassing but some people suggest that Noda just might succeed. — VNS