Japan opposition takes on economy after landslide
By ERIC TALMADGE, Associated Press Writer Eric Talmadge, Associated
Press Writer 1 hr 53 mins ago
TOKYO – Japan's likely next prime minister rushed to select Cabinet
ministers Monday after his party trounced the ruling conservatives in
elections and inherited a mountain of problems, including how to
revive the world's second-largest economy.
Yukio Hatoyama spoke only briefly with reporters before huddling with
party leaders. In a victory speech late Sunday, he said he would focus
on a quick and smooth transition and make a priority of choosing
Japan's next finance minister.
He has also said he wants to redefine Tokyo's relationship with its
key ally, Washington.
Prime Minister Taro Aso, conceding defeat, said he would step down as
president of the ruling Liberal Democratic Party.
As head of the party, I feel strong responsibility and it is my
intention to resign, Aso told a news conference Monday. His successor
as party leader is expected to be named in late September.
Although the nation gave the Democratic Party of Japan a landslide
win, most voters were seen as venting dissatisfaction with the LDP and
the status quo.
The staunchly pro-U.S. LDP — teaming up with big business,
conservative interests and the powerful national bureaucracy —
governed Japan for virtually all of the past 54 years. Their election
loss has been attributed primarily to frustration with the economy,
which is in its worst slump since World War II.
Official results were still being counted, but exit polls by all major
media said Hatoyama's party had won more than 300 of the 480 seats in
the lower house of parliament. That would easily be enough to ensure
that he is installed as prime minister in a special session of
parliament that is expected in mid-September.
The Democrats controlled the less powerful upper house of parliament
with two smaller allies since 2007, but if they fail to quickly
deliver on their promises, the LDP could resurge in elections for that
house next year.
The task ahead for the Democrats is daunting.
Japan managed to climb out of a yearlong recession in the second
quarter, but its economy remains weak. Unemployment and anxiety over
falling wages threaten to undermine any recovery. The jobless rate has
risen to a record 5.7 percent. After a rapid succession of three
administrations in three years, Japan is facing its worst crisis of
confidence in decades.
It must also figure out how to cope with a rapidly aging and shrinking
population — meaning fewer people paying taxes and more collecting
pensions. Government estimates predict the population will drop to 115
million in 2030 and fall below 100 million by the middle of the
century.
The Democrats' solution is to move Japan away from a corporate-centric
economic model to one that focuses on helping people. They have
proposed an expensive array of initiatives: cash handouts to families
and farmers, toll-free highways, a higher minimum wage and tax cuts.
The estimated bill comes to 16.8 trillion yen ($179 billion) when
fully implemented starting in the 2013 fiscal year.
The party has said it plans to cut waste and rely on untapped
financial reserves to fund their programs. But with Japan's public
debt heading toward 200 percent of gross domestic product, the
Democrats' plan has been criticized as a financial fantasy that would
worsen Japan's precarious fiscal health.
Japan's stock market surged early Monday on the news of the election,
but then fell back — indicating uncertainty among investors about what
the Democrats will bring.
The key difference is the Liberal Democrats' spending on public
projects and infrastructure, but the Democrats spend on family and
education, said Martin Schulz, a senior economist at the Fujitsu
Research Institute.
The Democrats have a year to show results, he added, noting next
year's elections are looming.
The Democrats are also under scrutiny for their positions on national
security and foreign policy.
Hatoyama has been vocal about distancing Japan from Washington and
forging closer ties with its Asian neighbors.
He has said he will end a refueling mission in the Indian Ocean in
support of U.S.-led coalition forces in Afghanistan, and wants to
review the role of the 50,000 U.S. troops stationed across Japan under
a post-World War II mutual security treaty.
He is not expected to make any radical departures that would harm
relations with Washington, however, and the new U.S. ambassador to
Japan said President Barack Obama is looking forward to working with
the administration in Tokyo.
The challenges we face are many, but through our partnership our two
great democracies will meet them in a spirit of cooperation and
friendship, Ambassador John V. Roos said in a statement Monday.
The Democrats' first task will be to convince a skeptical public that
they can actually lead.
The party is made up of an inexperienced group of left-wing activists
and LDP defectors. It is
