December 6 1993



December 6 1993




Like many Japanese of her generation, 31-year-old Keiko Matsura has never really paid much attention to politics. There didn’t seem to be any point: after 38 years of uninterrupted rule by the Liberal Democratic Party (LDP), the prospects of meaningful political change appeared, at best, remote.

But since reformist Prime Minister Morihiro Hosokawa swept to power in August, toppling the scandal-ridden LDP, things have been changing. “Hosokawa has rekindled my interest in politics,” says Matsura, a Tokyo magazine editor. “He has listened to the voice of the younger generation. He has shown us there is another way.”

By staid Japanese standards, Hosokawa’s way is nothing short of revolutionary. As head of a seven-party coalition, he has championed major legislation to clean up the country’s notoriously corrupt political system, which for years has turned a blind eye to porkbarelling and kickbacks. He

has led a drive to arrest businessmen suspected of bribery and influence-peddling, as well as the politicians who are believed to have been in their pockets. He has even promised economic reforms—including deregulation and tax breaks—that he says will relieve Japanese consumers of the bur-


Under Prime Minister Morihiro Hosokawa’s reform package, private companies would be banned from making donations to individual politicians. In addition, politicians convicted accepting bribes would be prohibited from running for office for five years. A few of the many recent bribery scandals:

AUGUST, 1992:

Leading Liberal Democratic Party member steps down after admitting receipt of $4.7 million in illegal donations from major transport group.

JUNE, 1993:

Mayor of Sendai arrested on charges of taking $925,000 in construction industry bribes.____

JULY, 1993:

Governor of Ibaraki prefecture accused of accepting a $92,500 payoff.

OCTOBER, 1993:

Construction company executives accused of funnelling $18.5 million a year to about 80 politicians, in return for help in winning public-works contracts.


Prosecutors arrest billionaire Ryoei Saito, owner of giant Daishowa Paper Manufacturing Co., on charges of paying a $925,000 bribe.

den of high prices and restrictive trade practices. “Hosokawa has surprised a lot of people,” says Richard Cochrane, vice-president of corporate banking with the Royal Bank in Tokyo. “He was looked on as a traditional man, but he has demonstrated he can change a lot in Japan. The old club is disappearing.”

For that, most Japanese voters seem grateful. In a country where cynicism towards politicians runs deep, the 55-year-old prime minister enjoys an unprecedented approval rating of more than 70 per cent. Although their new leader has been in office for only four months, many Japanese obviously like what they see. “Hosokawa has created a new image for Japan in the international world,” says Kazue Nishizaka, a 24-year-old Tokyo librarian. “He looks young and handsome, whereas LDP leaders tended to be old and stodgy. He stands for change.” As far as Nobukatsu Nishimura, branch manager with Wood Gundy Japan Ltd., is concerned, the change heralded by Hosokawa is for the better. “I find Mr. Hosokawa unique compared with previous prime ministers,” says Nishimura. “He is doing a good job and has set Japan on the right track.”

The first step in Hosokawa’s plan to get the country on course is an attempt to do what no Japanese leader has done before: push through sweeping political reforms. For a decade, successive LDP governments paid lip service to the idea, conscious of growing public dissatisfaction with a seemingly endless series of corruption scandals. But none of Hosokawa’s predecessors ever delivered. In fact, it was former LDP prime minister Kiichi Miyazawa’s failure to enact promised reforms that led to his defeat in a surprise nonconfidence vote over the issue in June. Deeply protective of a system that encouraged major corporate campaign funding—and assured its repeated re-election— Japan’s political establishment was understandably reluctant to change.

Until now, that is. In a major victory for Hosokawa, the 511-seat lower chamber of the Diet, or parliament, passed four bills in November that, if approved by the upper house as expected soon, will radically alter the face of Japanese democracy. The triumph came as some renegade members of the LDP broke ranks to vote for the mea-

sures. Currently, Japan has 130 multi-seat electoral districts, each of which sends between two and five members to the lower house. As a result, several candidates from the same party run for office in a single district. Critics charge that the system makes politicians dependent on powerful corporations, to whom they promise lucrative government contracts.

Under Hosokawa’s proposals, the number of lower house seats will fall to 500, of which 274 will be chosen in single-seat districts. The other 226 will be filled by proportional representation. Voters will cast two ballots: one for a candidate in their home district and another for the party of their choice at the national level. In addition, electoral boundaries will be redrawn and the number of seats in rural areas cut back. That will reduce the influence wielded by farmers—who have benefited greatly from government protectionism, including an almost total ban on rice imports.

Even more significantly, the reform legislation will prohibit private firms from making donations to indi-

vidual candidates. Instead, political parties will receive government funding for the first time. Those two measures, supporters argue, will seriously curtail the “money politics” that have come to characterize Japanese government. Politicians convicted of accepting bribes will be barred from holding office for five years.

But while most Japanese support the initiatives, not everyone thinks they go far enough. “Hosokawa is continuing a feudal electoral system,” contends Nastoshi Ito, an upper house member of the leftist Social Democratic Party. Adds Ito, who says he will vote against the reform package: “I don’t believe that single-seat elections will promote debate on policies. The competing politicians will resort to grander campaigns in order to win.”

If Hosokawa is successful in his drive to overhaul Japan’s electoral system, it will strengthen his hand as he moves on to the next stage of his program: reforming the Japanese economy. At the core of his strategy is a plan to eliminate many of the country’s more than 10,000 government regulations, which result in significant price markups for food and consumer goods. Some observers suggest that could lead to a gradual opening of the Japanese market to increased foreign trade and investment. As well as proposing income-tax cuts to spur spending, Hosokawa argues that consumers will be the big winners if the economy is made more efficient and competitive. It is a prospect that appeals to many Japanese. “Hosokawa has promised us a simple life,” says Ken Hongo,

a 39-year-old freelance translator. “He has promised to make the consumer, and not the company, the most important player in the Japanese system.”

In fact, the pressure to streamline the world’s second largest economy has become virtually inescapable.

“There has been a sea change in Japan,” says Sherry Cooper, chief economist at the Toronto-based investment firm Burns Fry Ltd., who travels frequently to the country. “They are in a deep recession, the confidence level is quite low and the unemployment rate [2.6 per cent] is at a five-year high.

This is a new world for them.”

One sign of the changing times is a recent round of cutbacks by major corporations, many of which had previously enjoyed uninterrupted growth for more than three decades. Nissan, the country’s second largest automaker, has announced that it will close several of its factories for two days in December as a cost-saving measure. And other corporations have begun to lay off employees—especially workers known in Japan as “people by the window,” who perform no real function but are kept on

the payroll by paternalistic corporations. “They can no longer afford to have an inventory of underemployed labor,” says Cooper, who predicts that deeper cuts are in store. Some forecasters even suggest that Japan’s unemployment rate could surpass eight per cent by the turn of the century.

For a workforce accustomed to guaranteed lifetime employment, the job losses have come as a psychological blow. Economic protests, once unheard of on Tokyo streets, are becoming more common, as demonstrators with placards march against white-collar sackings. “There’s an unprecedented pessimism,” says Cooper. “People are feeling very nervous. They don’t know what to make of the future.”

The uncertainty has even started to take its

toll on the famed Japanese work ethic, long embraced by dutiful employees with an almost slavish devotion to their employers. “We have worked too hard and have nothing for ourselves,” says Hongo. “I want to be able to lead a simple life which is rich in leisure.” Tetsuro Sasaki, a 42-year-old “salaryman” at a

Tokyo department store, heartily agrees. “The Japanese are supposed to have the highest salaries in the world,” he says, “but we are struggling because life is so expensive. I hope Hosokawa will improve our standard of living. The government must spend more money on increasing parks and housing, not just keep using our taxes for improving infrastructure that benefits industrial production all the time.”

But the road ahead seems rocky. In a country where upholding tradition is a way of life, many opponents argue that Hosokawa is attempting to accomplish too much, too quickly. “He

should look carefully at what is good and bad for Japan,” says Ito of the Social Democratic Party. “Right now it looks as if a revolution is taking place in Japan. But that’s not the way things are done by the Japanese. We should move step by step.” Fortunately for Hosokawa, many ordinary Japanese seem to think he’s moving at the right speed.