Every time I hear Jun-san rush to the defense of his reform program, I know the Japanese prime minister must be in some kind of trouble.
The question raised becomes more evident on each occasion: Does it matter whether Junichiro Koizumi remains in charge -- if he is in charge -- of the most economically and politically fraught of the industrial nations?
Koizumi has been vociferous in his own cause of late, and he now seems to be getting it from both sides. A year and a bit after taking office, his ratings in public opinion polls have swung dramatically into the red.
Those in the governing Liberal Democratic Party opposed to reform appear to have intensified their anti-Jun resistance.
No credit goes to Koizumi, it seems, for the current upswing in the economy. The consensus is that Japan's first-quarter growth rate could reach 8 percent, an extraordinary figure against the background of the past decade of doldrums.
Yes, it's a cyclical recovery in a long recession, and it is riding largely on a weak yen that the Bank of Japan, as of last week, appears eager to preserve. Jonathan Allum, the Japan-watcher at KBC Financial Products, makes an interesting point about the upturn in the economy in the May 22 edition of his newsletter, The Blah.
The services sector, he notes, has been much more resilient than manufacturing in Japan since the last downturn, in the late-1990s. "Although it may now be the industrial sector which shows the biggest bounce," he wrote, "it is likely that the recession will mark an important point in Japan's transition to the sort of post-industrial economy we enjoy in the UK and US."
Could be, but it doesn't look as if Jun-san will see much benefit. Among Koizumi's problems is that none of the reforms he is talking about is quite visible yet -- not to the Japanese voting public and not to the foreign community interested in the financial markets. Only the anti-reformists in the LDP and the bureaucracy have a good idea of what he's up to, and they think it's a bad idea.
Koizumi has accelerated ambitious public-sector reform policies inherited from previous administrations, probably in a bid to win political credibility.
In doing so, he has established only the limits of what the markets and his anti-reform adversaries will tolerate.
Pushing ahead too aggressively with bond issues for public corporations marked for privatization, the Koizumi folk have made investors nervous as to just what they're supposed to be buying.
It's unlikely now that the target for new bonds from public-sector entities this year, at 2.7 trillion yen (US$21.7 billion), will be met.
With his poll ratings under water and a spate of local electoral challenges on the way, Koizumi may now be less useful to the conservatives in the LDP for whom he was always a kind of front. Last month a longstanding LDP man, a former Construction Ministry bureaucrat, got shoved out of City Hall in Yokohama by a 37-year-old independent who likes to talk about things such as transparency.
In Koizumi's Japan, you still can't see much, can you? You would have thought Koizumi, long associated with the Health and Welfare Ministry, would at least be able to manage health care reform in a manner that satisfied voters. He hasn't yet, despite a protracted fight with the health care "tribe" in the Diet and their lobbyists.
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