Japan's unorthodox reformer steps down

Mr. Koizumi unexpectedly burst into office in 2001 after a string of traditional administrations that struggled to jump-start Japan's flagging economy. It quickly became apparent that the unconventional Koizumi offered a departure not just in style from previous leaders, but a real alteration in Japan's orientation.

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Japanese banks have been overhauled, employment has recovered, and the economy is in its second-longest expansion since World War II. Land prices are rising more than 10 percent a year in central Tokyo, the number of marriages is up, and the old factional style of politics that hamstrung effective decisionmaking in the ruling Liberal Democratic Party (LDP) is increasingly a thing of the past.

On the flip side, Koizumi's more muscular foreign policy and his visits to a shrine dedicated to the nation's war dead have lost Japan much goodwill around Asia. Wage disparities have increased, regional economies are still struggling, and a population decline has yet to be reversed.

But despite the entries on both sides of the balance sheet, few would dispute that Koizumi looms large in the history of modern-day Japan.

In April 2001, after the slightly eccentric former health minister took office, the nation was mired in a deep recession that was undoing much of Japan's economic miracle and threatening to destabilize the world economy.

The political process was stalled by vested interests within the LDP, international blue chip securities firms were going belly up, jobs were scarce, and land values had dropped in some areas by 75 percent in a decade.

Koizumi's most significant legacy is undoubtedly his no-holds-barred sweeping program of economic and political reforms. The origin of many of these programs date to the administration of Ryutaro Hashimoto in the late 1990s, but Koizumi accelerated the process and dragged a reluctant party into pursuing once unthinkable policies such as privatizing the post office savings system.

"There were two messages behind the smaller government campaign," says Hiroaki Hayashi, a public finance expert at Kansai University in Osaka. "One was that the central government had strayed too far into areas that should have been handled by the private sector or local authorities, and this needed correcting. The other was that there was little choice in the matter due to insufficient public revenue."

The effect of this policy has altered the way the Japanese business world works. "The essence of the Koizumi reforms has been to break the economy's addiction to the government," says Mr. Hayashi.

With his "lion-heart" moniker and shaggy mane, Koizumi also changed the image of political leadership in Japan, exhibiting quirky humor on the floor of parliament and speaking directly to the public by television and e-mail.

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He will hand over a party that is profoundly different from the political machine he inherited. The LDP once operated through the string-pulling of behind-the-scenes power brokers, but many of these figures are now gone. "Koizumi broke the old regime in the LDP and destroyed the faction system," says Kazuhiko Ozawa, a professor of political science at Obirin University in Tokyo.

In his fight against such backroom dealing, Koizumi's chief asset was his public support. His ratings have mostly hovered close to 50 percent, and a recent poll by Jiji Press showed that Koizumi ranks second in popularity on the list of historical prime ministers.

Where he has perhaps been most controversial has been in insisting on paying respects to the war dead at Yasukuni Shrine, something that pushed relations with China and South Korea to postwar lows. But Koizumi has at the same time strengthened military relations with the US and sent troops to Iraq on their first mission to a war-torn country since World War II. Tokyo's readiness to dispatch aid to Indonesia after the 2004 tsunami, and peacekeeping troops to Lebanon, has prompted rivals such as China to follow suit.

"After the 9/11 terrorist attacks in the US, Koizumi played a decisive role in overcoming the standard restrictive legal interpretation on the use of armed forces abroad" and pushed through a law allowing logistical support for the war in Afghanistan, says security expert Masafumi Kaneko at the PHP Research Institute in Tokyo.

Even so, Koizumi's foreign policy has been faulted for a lack of consistency. He failed to resolve territorial disputes and couldn't win a permanent seat on the UN Security Council. "Japan's foreign and security policy is now strong in a crisis, but the Koizumi administration hasn't been interested in constructing a long-term strategic approach," says Mr. Kaneko.

Many of these issues will be left to incoming leader Shinzo Abe. Mr. Abe is keen to do away with the parts of the nation's Constitution that effectively restrict Japan from becoming involved in global security hot spots.

As for Koizumi, some observers say he is likely to leave politics to pursue interests such as reading history and listening to opera. But the old lion may yet grab a headline or two. Gossip magazines have recently speculated that wedding bells are in the air for the 64-year-old divorcé.