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The Hosokawa Approach: An Ambitious Grand Design : How Washington can help Japan's dynamic new prime minister

THE U.S.-JAPAN RELATIONSHIP: New Ideas for Reducing Bilateral Tension: one in an occasional series.

September 05, 1993

Is this man serious? That is the question long-time observers of Japan are asking about the dynamic new prime minister, Morihiro Hosokawa.

"A nation of no-frills excellence"--this is the phrase coined by Hosokawa to describe his ideal Japan. He wants a country that values the good and simple and shuns useless luxury and extravagance. Drawing on these traditional values, he wants to shape a new, leaner Japan, better equipped to become a global superpower.

Coming back down to earth, Hosokawa supports open markets, cheaper imports, deregulation and a reduced trade surplus--reforms long sought by the United States and resisted by the now out-of-power, status quo-minded Liberal Democratic Party. But Hosokawa's new government, barely a month old, is built on a fragile coalition of eight parties--all with disparate interests and priorities. Transforming rhetoric to policy could be a daunting task.

Washington can help the new prime minister by taking a clear and consistent approach to Japan. This is no time for U.S. vacillation or showy saber-rattling. A clarity of purpose on the U.S. part, set forth by President Clinton in his expected meeting with Hosokawa later this month, will help to shape the political debate in Japan. The fluid political situation offers an opportunity for Clinton to move, delicately, in support of Hosokawa's efforts.

Hosokawa has described his biggest challenge as "not simply to lead the country for a brief interlude but to undertake the important mission of opening the way for a new era to come." In that mission he and President Clinton share a goal of fashioning epoch-making initiatives to better manage the U.S.-Japan relationship in the post-Cold War era.

For now, Hosokawa's most powerful weapon is his great popularity. But his political instincts will be severely tested by December, his self-imposed deadline for first carrying out the voters' mandate for political reform. Though he has been short on details, here is his program so far.

POLITICAL AND ELECTORAL REFORM: The aim, he says, is to reconfigure the absurd electoral system, which makes the rural vote worth up to three times the city vote. He also wants to eliminate the graft-heavy system of political contributions, which has encouraged the corruption that brought down the LDP in July after 38 years in power.

THE NEW BUDGET: Hosokawa has indicated that he wants to avoid deficit financing in the budget. But the Socialist Party members in his coalition want a tax cut. The Clinton Administration favors a Japanese tax cut, too, but also new spending by Tokyo to help stimulate consumer demand for U.S. goods in Japan. To avoid having a huge increase in overall government spending in the fiscal 1994 budget, Hosokawa may want the Parliament to pass an emergency stimulus package soon that offers new public-works allocations to counter the sluggish domestic economy.

ECONOMIC POLICY: Despite all the hoopla about political change, the new government's most vexing immediate problem is economic: Japan is wrestling with a recession and an appreciating yen. Reducing Japan's $134-billion global trade surplus--and especially the $50-billion surplus with the United States--is important to Hosokawa, and any such reduction should help ongoing U.S.-Japan trade talks. But Hosokawa has criticized numerical targets advocated by Clinton and has indicated that no change is forthcoming on Tokyo's ban on rice imports. Hosokawa has also criticized both Japan's narrow-minded pursuit of personal economic gain and the pervasive influence of collusive institutions that shut out foreigners and other outsiders and work against Japanese consumer interests.

FOREIGN POLICY: Hosokawa's major initiative to date is his unprecedented, and welcome, expressions of apology to other Asian nations for Japan's World War II atrocities and aggression. U.S.-Japan relations remain the central pillar to Japan's foreign policy. Hosokawa may reveal other initiatives in an address to the United Nations' General Assembly later this month.

For now, Hosokawa's great achievement has been to open debate and the political process in Japan. The new government reflects a Japan that, at least in concept, is challenging its die-hard old ways. Whether or not Hosokawa succeeds in his major aims, he has already made a mark for himself on the world stage.

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