Hosokawa's Reform Thrust Likely to Survive

After premier's resignation, Japan's ruling coalition struggles to find a leader who combines Hosokawa's ability to communicate a reform agenda with sufficient domestic political strength to make it happen

MORIHIRO HOSOKAWA and his image as a scandal-free politician crashed and burned this past weekend, but analysts here insist that his efforts to revamp the way Japan is governed will escape the wreck.

Mr. Hosokawa's sudden announcement on Friday that he is resigning as prime minister took Japan by surprise - and this is a country that has seen five premiers quit in as many years. As recently as last week, analysts were speculating that critics' concern over questionable financial transactions in the early 1980s would bring Hosokawa down, but no one thought the fall would happen as quickly as it did.

Endless weekend meetings

Consequently, politicians spent the weekend in what has seemed like an endless, rotating round of meetings. The seven-party coalition Hosokawa headed is a divided, tempestuous one, and it has not been easy for party leaders to find a replacement.

It first appeared that Foreign Minister Tsutomu Hata would be asked to lead the government, but that seems less likely. Amid rising speculation that the coalition will break down completely, the most its members have been able to accomplish is to promise to name a new prime minister by the end of this week.

The turmoil has opened the possibility that the governing coalition could be redrawn to include some members of Japan's Liberal Democratic Party, which ruled the country for 38 years until the elections last August that resulted in Hosokawa being named prime minister. The LDP has worked diligently in recent weeks to expose the transactions that embarrassed Hosokawa into quitting.

The party, demanding that Hosokawa comply with an investigation into his finances, also froze debate on the national budget, which should have been passed April 1. The country has been operating on a 50-day provisional budget since then.

In announcing his intention to resign, Hosokawa said he was doing so to break the parliamentary deadlock and to take responsibility for possibly illegal financial activities by ``a personal friend'' who was managing some of his money. The friend's name has not been publicized, but reports here have said that the man engaged in a loan-sharking scheme with Hosokawa's funds. There has been no word on when Hosokawa will actually step down.

Hosokawa apologized to the Japanese people in a news conference on Friday for not completing the broad reforms the coalition members were elected to institute. The overthrow last August of the LDP was a rejection of the corrupt political system that emerged in Japan's postwar era.

Political reforms passed

This January Hosokawa managed to win parliamentary approval of a political reform law designed to increase the power of ordinary voters and decrease the tendency of politicians to engage in suspect forms of fundraising. But analysts agree that other elements of Japan's postwar system - relatively closed domestic markets, a centralized and some say overly powerful corps of bureaucrats, and a national spirit that favors corporate growth over consumers' needs - are much more resistant to change.

One Western diplomat who tracks Japanese politics says that Hosokawa and the coalition that has backed him for eight months were destined only to clean up politics. ``The fundamental, organizing principle of the coalition is political reform,'' he says.

The diplomat argues that the Japanese political system is in the middle of a potentially messy period of breakdown and renewal. The postwar priorities that governed politics in Japan - keeping leftists out of power and rebuilding an economy crushed by World War II - are now all but irrelevant, so ``what we see now are the remnants of a historical period; parties grouped together for reasons that no longer apply.''

The word of the hour here is ``realignment,'' as politicians talk of new groupings and new parties. Several coalition parties have announced a plan to form an alliance to be called ``Reform,'' underscoring the sense that the process Hosokawa inaugurated will proceed.

Motoo Shiina, an independent member of Japan's upper house of parliament who left the LDP six years ago, says the drive toward fundamental change will not stop. ``The momentum among the general public, business people, and the international community will not allow [recalcitrant politicians] to return to the old system,'' he says.

The resignation may affect the timing of change may slow the pace of change here, but will not derail it, Mr. Shiina adds.

``The momentum which Hosokawa started cannot easily be reversed,'' agrees Hideyoshi Soeya, a political scientist at Tokyo's Keio University who is now at Honolulu's East-West Center.

Hosokawa firmly established political reform on the national agenda, Professor Soeya says, but the prospects for economic reform were always less certain.

``In that area the power of the bureaucracy is very strong and Hosokawa could not handle that.'' He adds: ``Precisely because Hosokawa was a new type of leader, he did not have the domestic political strength'' necessary to bring about some changes.

Observers here agree that Hosokawa was too weak a politician to run the coalition effectively. But many say that he made unique contributions as premier, both in style and substance.

Hosokawa, Soeya says, ``was a straight talker and he recognized the kind of thing that Japan should do today in order for Japan to meet challenges in 10 or 20 years time.''

He says that beginning the process of political reform, apologizing for Japan's war record, and opening the rice market in order to participate in the global trading system are all examples of this ability.

The fundamental question, he says, is whether Japan can find a leader who combines Hosokawa's ability to set and communicate an agenda for change with sufficient domestic political strength to make it happen.

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