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A Dreadful Failure to Lead

Japanese Finance Minister Shoichi Nakagawa pauses at a press conference as he announces his resignation at his office in Tokyo on February 17, 2009. (Yoshikazu Tsuno/AFP/Getty Images)

Japanese Finance Minister Shoichi Nakagawa pauses at a press conference as he announces his resignation at his office in Tokyo on February 17, 2009. (Yoshikazu Tsuno/AFP/Getty Images)

by Nobuyoshi Sakajiri

Originally published in the Far Eastern Economic Review, February 25, 2009

Given the global financial crisis, the G-7 press conference was an important stage for financial and monetary authorities to send a clear message to the markets. But Shoichi Nakagawa, the finance minister of Japan, looked groggy and slurred his words as if drunk. Mr. Nakagawa, reportedly a heavy drinker, initially claimed, “I drank the night before, but didn’t touch a drop before the news conference.” Later he admitted that he had “enjoyed some wine at lunch.”

Although Japanese Prime Minister Taro Aso refused to fire Mr. Nakagawa, the finance minister ultimately resigned after images of his wobbly performance played repeatedly on TV and the Internet world-wide.

In fact, Mr. Nakagawa’s blunder at the G-7 meeting was not his first. He made as many as 26 errors while reading his policy speech at the House of Representative in late January. This latest resignation highlights the Aso administration’s lax crisis management. Mr. Nakagawa is the second minister to step down from the Aso cabinet since last September, following former Construction and Transport Minister Nariaki Nakayama who left last September after just five days on the job, amid mounting criticism of a series of controversial remarks.

Meanwhile, Japan’s economy continues its downturn. The real gross domestic product tumbled by an annual rate of 12.7% in the last quarter of 2008, the sharpest contraction since 1974 amid the first oil crisis, and only the second double-digit decline in the postwar era.

Yet it could be argued that Japan's political decline is even worse than its economic decline. Mr. Aso is Japan’s third prime minister in less than two years, all three chosen by the Liberal Democratic Party (LDP). Prime Minister Aso must call for a general election before September when the term of the Lower House ends, but his approval ratings are dismal (around 10%) and the LDP is surely in danger of losing power in an election.

Nonetheless, Prime Minister Aso received an invitation last Tuesday from U.S. Secreatary of State Hillary Rodham Clinton to visit Washington this month, which would make him the first foreign leader to meet with President Barak Obama at the White House. But this platinum ticket might be too little too late for Mr. Aso’s popularity back home.

When asked about the disarray of Japanese politics and its impact on U.S-Japan relations during a Tokyo interview, Mrs. Clinton responded that the U.S.-Japan alliance would continue to be durable “no matter who is in charge here in Tokyo.” That generally has been true. But the Japanese minister of defense whom Mrs. Clinton met in Tokyo is the sixth defense minister in just two years. This may be acceptable for an inconsequential country but not for the second largest economy in the world.