Japan's prime minister quits

April 08, 1994|By Thomas Easton | Thomas Easton,Tokyo Bureau of The Sun

TOKYO -- Stung by scandals and unable to effectively govern, Prime Minister Morihiro Hosokawa resigned today, ending a period of extraordinary optimism for political and social change in Japan.

Mr. Hosokawa, whose resignation shatters the fragile coalition he has headed since last summer, announced at a press conference at 2:20 a.m. Eastern time that he would step down. During his statement to the press, he said there might be new problems stemming from management of his campaign finances.

The news threw Japan's already volatile political world into deep confusion, and sent stock prices plunging.

Visibly tired and distracted, Mr. Hosokawa briefly informed members of his Cabinet of his decision around noon today. The move comes after repeated denials of a discussion the prime minister was said to have had earlier this week when he allegedly told two political leaders that he was exhausted and wanted to quit. There is no obvious successor to Mr. Hosokawa.

Though he still enjoys extraordinarily popularity by historical standards, enthusiasm over Mr. Hosokawa and the shaky coalition he led had steadily declined in recent months.

Major initiatives for reform had stalled, efforts to open up Japan's economy had been blasted both at home and abroad for being vague or empty, and discussions on a new budget had come to a standstill.

The opposition Liberal Democratic Party, which had led Japan for 38 years before the election of the Hosokawa government last summer, had become an intractable block against any movement in Japan's parliament, the Diet. It caused a paralysis Mr. Hosokawa found intolerable, a member of the coalition said.

Largely because of the LDP's prodding, Mr. Hosokawa had been under fire for a series of questionable financial deals. In 1982, Mr. Hosokawa received a $1 million loan or payment from a scandal-ridden trucking company that he never fully explained.

Some of the money may have been used to finance his successful campaign for governor of a southern Japanese state that became the launching pad for his political career.

Mr. Hosokawa has said that part of the loan had been used to buy a fancy Tokyo apartment that subsequently became part of another scandal. In 1986, shortly before the privatization of Nippon Telephone and Telegraph Corp., the apartment was used to purchase shares in the giant government monopoly on favorable terms. The purchases were listed in the name of Mr. Hosokawa's father-in-law but a witness emerged willing to testify that the purchaser was really Mr. Hosokawa.

From its inception last summer, the seven-party coalition headed by Mr. Hosokawa had been problematic. To oust the Liberal Democrats, some of the most liberal and conservative political factions joined together. At times, members of the government would admit that the only tie keeping them together was a desire to be in the ruling government, a goal that could not be achieved independently.

In retrospect, the highlight of the administration came in November, immediately before the meeting in Seattle with President Clinton and other Asian leaders. The day before departure, a political reform package was passed in the crucial lower house of the Diet and attention began to shift to vexing trade problems with the United States, a persistent recession, and genuine efforts to reform the ossified administrative bureaucracies which exert extraordinary force on life in Japan.

The reform package, however, was derailed in the upper house of the Diet by dissident members of the coalition, beginning a pattern that ultimately destroyed the government's effectiveness.

A much weaker bill was passed using back-room tactics the government had hoped to avoid. The pattern was consistently repeated afterward, with dissidents forcing compromises resulting in weak legislation. Underlying the difficulties were profoundly different ideas about almost every facet of government, from trade, to taxes, to electoral policy.

Optimism, however, remained until the end.

"The paralysis would have ended next week," said Hajime Ishi, a member of one of the coalition parties, suggesting that all that was needed was time.

His offer to resign yesterday apparently caught many of his own coalition leaders by surprise.

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