Japan gets another prime minister: Can he stop the revolving door leadership? (VIDEO)

Finance Minister Yoshihiko Noda won the Democratic Party of Japan (DPJ) presidency Monday and will replace Naoto Kan as prime minister. The aftermath of the tsunami and earthquake will test his leadership.

Yuriko Nakao/Reuters
Japan's Finance Minister Yoshihiko Noda, who was chosen as the new leader of Japan's ruling Democratic Party, speaks during a news conference after the party's leadership vote in Tokyo August 29. Finance Minister Noda will become Japan's next prime minister after defeating Trade Minister Banri Kaieda in the ruling party leadership run-off vote on Monday.

Yoshihiko Noda is slated to become Japan’s sixth prime minister in five years after the resignation of the unpopular Naoto Kan on Friday. But Mr. Noda's emphasis on collaboration is offering some hope that he will be able to slow his country's revolving-door leadership, despite a host of daunting challenges at home and abroad.

The former finance minister in the government of Mr. Kan, who resigned after just 450 days in office, confronts major tests in the aftermath of March’s triple disasters, a deeply divided party, and a strong currency that is making exports even more expensive in a stuttering global economy. He also faces potentially strained relations with Japan’s closest neighbors and an unforgiving electorate and media at home.

Still, some observers are cautiously optimistic.

“He seems to treasure harmony, unlike Kan and Hatoyama [Kan’s predecessor], so he may last a little longer if he looks for cooperation with the opposition parties,” says Takashi Koyama, professor of politics at Akita International University.

Noda defeated trade and industry minister Banri Kaieda in a second round run-off by 215 votes to 177 in a ballot of Democratic Party of Japan (DPJ) lawmakers and is expected to be sworn in on Tuesday. Five candidates ran in the first round though nobody achieved an overall majority. Seiji Maehara, by far the most popular of the five with the public, was eliminated in the first round.

Economy policies

Known as a fiscal conservative in the left-leaning DPJ, Noda had stated an intention to increase taxes to help control Japan’s huge and growing national debt. However, he has recently been backpedaling away from that stance as Japan’s economy has registered its third straight quarter of contraction.

“He doesn’t have much room for maneuver with policies for the economy, even less than the other candidates would have done because of his statements about raising tax,” says Martin Schulz, senior economist at the Fujitsu Research Institute in Tokyo.

However, Dr. Schulz believes any tax rises will be “on the back burner for the next couple of years until reconstruction from the disaster is complete and the economy recovers.”

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As finance minister, Noda was vocal in proposing government intervention to weaken the strong yen which has hurt Japan’s exporters when weak domestic demand means that overseas markets offer the only hope of growth. Nevertheless, with foreign exchange markets having grown exponentially in recent years, even the $50 billion spent by the government post-disaster has provided only temporary relief.

“All the intervention does is buy a few days of weak yen for exporters to cash in, and then it carries on back on the same trend of strengthening,” says Dr. Schulz.

With Japan’s national debt already at around 200 percent of GDP – the highest ratio of any country except Zimbabwe – there will also be pressure on Noda to tackle that $10 trillion problem.

Finding harmony

Before he can attempt any policy initiatives, the new prime minister must try to unify a DPJ so wrought with internal divisions that five candidates representing its various factions stood in today’s leadership election.

The appointment of cabinet positions will then be as much about placating those competing groups as it will be about finding the most capable ministers for the respective posts.

As the revolving door of premiers continues to turn, many are wondering whether anybody can be a successful Japanese prime minister, even as the country seems to be crying out for strong leadership. While Noda’s nonconfrontational style may help him to some extent in Japan’s consensus-driven politics, few expect him to be inspirational.

“He is calm and a compromiser who doesn’t get into fights with other politicians for emotional reasons,” says Professor Koyama.

Noda is also likely to need some of those skills to smooth relations with China and South Korea, who he recently angered with his statement earlier this month that convicted Japanese Class-A war criminals were not in fact guilty of war crimes. Japanese wartime aggression and its perceived failure to acknowledge its actions remains a thorny issue with its Asian neighbors 66 years after the end of World War II.

“If he doesn’t manage to resolve this issue with China and Korea, then Japan could once again become more isolated in Asia,” says Professor Koyama.

Whatever Noda brings to the table, it simply may not be enough to satisfy Japan’s fickle electorate. A poll before Kan announced his resignation showed that a majority of voters didn’t believe the next prime minister would last more than a year, whoever it turned out to be.

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