Japan in Crisis

January 22, 1994

In rejecting political reforms, the Liberal Democratic troglodytes of Japan's House of Councilors or upper house of parliament have not merely canceled the mandate of the August election to the lower house. The political crisis they brought about cripples the government's ability to face the economic crisis, a recession that has seen share and property prices halved in three years. It is now doubtful that Prime Minster Morihiro Hosokawa can bring about the stimulus package he promised.

The crisis also cripples Japan's ability to negotiate. The hastily scheduled visit of U.S. Treasury Secretary Lloyd Bentsen this weekend, to forge trade deals in advance of Mr. Hosokawa's planned visit to Washington on Feb. 11, is probably in vain. Mr. Hosokawa may not be prime minister next month. He may have fallen or have called new elections by then. In the current confusion, even he doesn't know.

Mr. Hosokawa has more urgent matters on his mind than to mollify the Americans. He has a self-imposed deadline of one more week, until next Saturday, when this session of the parliament ends, to rescue his political reforms. That means negotiating their dilution with Liberal Democratic obstructionists.

After years of relentless scandals in Japan's otherwise remarkably successful political and business system, the Japanese electorate last July humiliated the Liberal Democrats and created the seven-party coalition that was installed in August. Mr. Hosokawa is committed to reforming the electoral process that converted politicians into hired contract-fixers for companies. One element is to forbid corporate contributions to individual politicians. Another is to replace multi-member districts with single-member districts and proportional representation. That is, to make elections more ideological and less commercial.

His reforms narrowly passed the lower house in November, but fell afoul of the unreconstructed upper house. Not only were the Liberal Democratic councilors opposed because they favor the corrupt old ways. A substantial number of Socialists, not comfortable in a reform-minded but conservative coalition, defected to the opposition.

The Hosokawa reforms are modest enough and what Japan needs. The remarkable thing about the enduring Japanese recession is that it has not -- so far -- prevented the recovery that is grabbing hold in the United States. But in the long run, the world needs a prosperous and politically stable Japan. The reform elements in its body politic offer the best hope.

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