Fall of Hashimoto Reverberates in Japan and around World Prime Minister Said Yesterday He Will Resign. Will That Slow Economic Reforms?

Article excerpt

Overnight, "continuity" has become the buzz word of Japan's leaders. In the aftermath of the ruling party's devastating election defeat Sunday, they're arguing that the country's economic reform plans and foreign policies will remain unchanged.

Prime Minister Ryutaro Hashimoto confirmed yesterday that he will resign. But he insisted his Liberal Democratic Party (LDP) will carry on as before. "I don't think there's going to be any change in the basic course, just in the actors," adds Foreign Ministry spokesman Sadaaki Numata, talking about Japan's foreign policy. "We'll have basic continuity."

But in reality, the transition may not be quite so smooth. The political landscape has changed in ways that not only will disrupt foreign policy, but also may delay the repair of the global economy and affect international security.

On Sunday, voters overwhelmingly favored opposition candidates in the election for half of the 252-seat upper house. The LDP won only 44 seats, far short of the 61 it held previously and the 69 it hoped to gain for a majority. The shortfall means the LDP will have to cooperate with several parties to get its legislation through the upper house.

Ideological differences will cause some delays. The Communist Party, which gained nine seats, is in a better position to push its pacifist agenda and could make it tougher for the LDP to win approval for a new set of guidelines intended to make Tokyo more of a full partner in the US-Japan security relationship.

Mr. Hashimoto's resignation may have a more immediate effect on ties with Russia. He and Russian President Boris Yeltsin have developed some personal chemistry in working toward a resolution of territorial disputes left over from World War II, and the momentum they generated now seems in jeopardy.

Economic reforms may be affected for two reasons. One is that Japan's government has become reliant more on political leadership than on its bureaucracy - thanks to scandals and mistakes that have diminished the power of civil servants. But, for at least the next few weeks, politicians will be concentrating exclusively on politics, meaning that economic supervision will likely suffer. The ebb of the world's second-largest economy is an international concern because Japan's troubles could drag other economies down.

Tokyo's political and economic troubles especially concern Asian leaders, who want a vigorous Japan to aid their own tenuous economies. …

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