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Farewell Mr. Fukuda

Japan's outgoing Prime Minister Yasuo Fukuda bows at the ruling Liberal Democratic Party's general meeting in Tokyo on September 3, 2008. (KAZUHIRO NOGI/AFP/Getty Images)

Japan's outgoing Prime Minister Yasuo Fukuda bows at the ruling Liberal Democratic Party's general meeting in Tokyo on September 3, 2008. (KAZUHIRO NOGI/AFP/Getty Images)

by Michael Kulma
Director, Policy Programs, Asia Society

TOKYO, September 3, 2008 - The political mood on the streets here was disheartening as Prime Minister Yasuo Fukuda announced his resignation at a hastily arranged press conference Monday night in Tokyo. Faced with low approval ratings, rumblings within his own party, strong opposition in Japan’s upper house of parliament, and a slowing economy, it ended up being only a matter of time before Mr. Fukuda would step down.

Low approval ratings, which hounded the prime minister throughout his tenure, remained so even after a cabinet reshuffle in early August. The announcement of an economic stimulus package last Friday did little to help the plight of Prime Minister Fukuda in the eyes of a public who found his leadership uninspiring and lacking in vision.

At the same time, there was concern within the Mr. Fukuda’s ruling Liberal Democratic Party (LDP) that candidates would not be able to successfully contest elections with an unpopular prime minister at the helm. This had to have been at least partly on his mind when announcing that he was stepping down.

Yet Mr. Fukuda had more problems than those posed by his own party. Since taking over from the embattled Shinzo Abe in September 2007, he has been faced with a divided Diet, with the lower house controlled by the LDP, and the upper house by the opposition Democratic Party of Japan. This has made governing difficult at best. While Mr. Fukuda attempted to breach the divide last November, calling for a grand coalition, negotiations broke down soon thereafter, resulting in regular political stalemate.

It is on the economy that this impasse between the two parties may have been most important. During the press conference announcing his resignation, Mr. Fukuda hinted at the impasse between the two parties when he said “Considering the state of the Japanese economy and the well-being of the public, we can’t let this happen again in the extraordinary Diet session.”

So where does Japan go from here and who will be the next prime minister? Once the next prime minister takes hold of the reins, there will likely be calls for an early dissolution of the lower house of parliament, though when that takes place may largely be determined by the approval rating of the next administration. As the LDP cannot afford to lose the lower house, their need for a much more popular prime minister is critical.

As for the candidates, the race seems to have narrowed over the last few days to former LDP Secretary General Taro Aso and former Defense Minister Yuriko Koike. Now the internal struggle begins. Secretary General Aso represents the traditional wing of the LDP, which may want to appeal for voter support through fiscal spending to boost the economy. Ms. Koike, on the other hand, is supported by younger LDP politicians who want to continue the policies of deregulation and administrative overhaul championed by former Prime Minister Junichiro Koizumi.

While outgoing Prime Minister Fukuda hopes his successor will be able to breathe new life into the political process, the next prime minister will face many of the same challenges that confronted him. Neither Mr. Aso nor Mr. Yuriko is likely to have the kind of widespread popularity enjoyed by Mr. Koizumi that would help the next prime minister overcome the obstacles ahead. We’ll know soon enough who will prevail, but in the meantime the political mood on the streets of Tokyo is one of resignation.

Michael Kulma is the director of Policy Programs at the Asia Society.