Any new government leader may proclaim himself or herself to be a reformer. But some only talk about reform and don't enact it during their terms in office. In some cases, not only does nothing get reformed but the leader ends up being labelled as anti-reform.
Japan is a good example. Although it is the world's second-largest economic power, it has suffered from an economic decline since the end of the 1980s. Some even call the past 10 years a "lost decade" for Japan. Eight prime ministers have been appointed in the past eight years. Although the first seven all proclaimed themselves to be reformers, they failed to make any meaningful reforms and quickly left office.
Their failure mainly resulted from their fear of promoting structural reform. They didn't dare risk offending political factions by reforming the traditional power structure; they didn't dare risk offending vested interests by reforming the financial and economic structure; they didn't dare risk offending voters by reforming the social welfare structure. Each of them talked the reform talk, but they didn't walk the reform walk.
The new prime minister, Junichiro Koizumi, however, is a reformer who not only talks but also acts. As the cabinets of his predecessors were microcosms of Japan's faction-ridden politics, he ignored the factions when forming his cabinet. His predecessors failed to come up with any reform plan, but he has proposed the so-called "Koizumi declaration," a national economic reform scheme.
Moreover, the declaration is not a purely emotional one that is long on rhetoric and short on substance. Its main point is, "No pain, no reform; no reform, no development!" Reforms are expected to be painful because Koizumi is pushing for surgical style structural reforms. Not only will vested interests be sacrificed, but the public will also have to tighten their belts and brace for a recession during the next two or three years.
Koizumi's first step, for example, is to reform the banking industry and to help local banks to reduce their ?60 trillion or so in bad debts. The impact of such a move, however, may force poorly managed businesses into bankruptcy, which will throw a number of people into unemployment. The increased jobless rate will not only lead to a shake-up in society, it will also cause widespread discontent and influence votes. The Koizumi administration could even lose power as a result of its reform efforts.
Only through reform of the banking industry will there be much of an effect upon the financial, economic, social and political realms. Its effect in any of these realms may cause the reform to fail, or even bring down the government. That is why Japan's previous prime ministers didn't dare implement structural reforms. But Koizumi, who has been called Japan's Don Quixote, is bravely waving his lance and rushing toward the windmill.
Koizumi was quickly able to propose his reform plan -- which was discussed and designed by a few scholars and experts without negotiation between factions within the ruling LDP -- because he enjoys great public support. If he fails, Japan, having already experienced a "lost decade" may yet live to see a "catastrophic decade."
"Don't be afraid of hardship; don't yield to the vested interests; don't be limited by past experience" -- these are the three major appeals made in the Koizumi declaration. The fact that he has swiftly come up with a reform plan and made financial and economic reform his priority are worth every reformer noting.
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