Reforms Won Him Popularity--and Changed the Nation : Nakasone’s Legacy: A New Japan

No other Japanese prime minister since World War II took office under the kind of criticism that was heaped on Yasuhiro Nakasone in 1982, and none left office with as much praise as is being heaped on him these days.

Condemned as a militarist, a “weather vane” without political principles and an adventurer in diplomacy who had sold himself to former Prime Minister Kakuei Tanaka to win power, Nakasone took office with the support of barely a third of the voters.

This fall, as Nakasone prepared to step down, a poll conducted by the Kyodo News Agency showed that 50.1% of the voters were behind him, the highest level of popular support any postwar prime minister has had at the end of his term. The previous high mark was 32.6%, for Zenko Suzuki in 1982.

The change underscores the fact that Nakasone--to the surprise of many Japanese--has helped to make Japan a different country than it was five years ago. And, as he yielded the prime minister’s job this week to Noboru Takeshita, Nakasone had prepared the ground for more changes to come.

Before Nakasone, Japan’s leaders acted as if they were carrying out a neutralist foreign policy. Japan now unabashedly declares itself to be an American ally, a member of the Western alliance.

Change used to come to Japan only through glacial evolution, but under Nakasone, Japan has experienced near-revolutionary reforms in administrative structure.

A government that had insisted that foreigners wishing to do business in Japan must adapt to Japan’s standards now has rewritten regulations to conform with international patterns and committed itself to bringing others into line.

A nation that had been satisfied with its own ways now confesses to being a closed society and recognizes that it must “internationalize.”

A public that appeared to demand silence and obtuseness of its prime ministers has found that it likes--and is proud of--dynamic, straight-speaking leadership.

A world accustomed to passive Japanese prime ministers, men occasionally likened to transistor-radio salesmen, suddenly discovered in Nakasone an activist at the helm in Tokyo, a man whose interests spread beyond economics into diplomacy, history, literature, the arts, music and spiritual concerns.

No Japanese leader ever established with another world leader the kind of rapport and mutual trust Nakasone has with President Reagan.

Approaching Crisis

Yet despite all this, Japan often finds itself the odd man out with the rest of the world. As Nobutsugi Otsuki, an editorial writer for the newspaper Asahi, put it, “Japan is nearing the position of a nation which lacks any friend with whom it can consult in trust and feel at ease.”

That such a state of affairs could have developed under the most activist and international-minded prime minister the country has had in the last 42 years indicates that what may be an approaching crisis may be more a product of the nature of Japan’s society than of its leaders.

Nakasone’s attempts at reform, his plea to internationalize a closed society and Japan’s emergence as “banker to the world,” the No. 1 creditor nation with the world’s largest trade surplus, all failed to uproot established interest groups and old social mores.

The institutions with the power to implement reform in Japan--the bureaucracy and the ruling Liberal Democratic Party--have remained aloof. Nakasone’s greatest successes came only when he was able to subvert them, or bypass them.

Pushed Through Reforms

Privatizing and splitting into seven companies the debt-laden Japan National Railways was hailed as an accomplishment worthy of a prime minister’s entire term in office. Yet Nakasone pushed through not only the railway reform but also privatization of the tobacco and salt monopoly and the state-run telephone company. Japan’s flag-carrier airline is to follow Nov. 18.

He accomplished the reforms not by means of nemawashii , the traditional method of building agreement among all persons concerned, but rather by appealing directly to the public for support. For recommendations, he turned not to the bureaucrats but to special commissions he set up--and stacked with reform-minded private citizens.

In a booklet he wrote shortly before assuming power, Nakasone said that “traditional consensus-making cannot cope with the many challenges of our complicated age. . . . It can slow down the decision-making process until the final decisions come too late.”

He set out, in his own words, to become a presidential-style leader, handing decisions down from the top rather than waiting for them to come up from the bottom.

Attacked Bureaucracy

Nakasone made no secret of his attempt to move Japan away from its century-old status as a nation run by bureaucrats. He said in a 1985 interview that Japan must end its reliance on the “dogmatism of the bureaucracy,” which in less-developed days had pulled the nation forward but now had “become a detriment hindering growth.”

Never was his attack on the bureaucracy clearer than on March 31, 1985. Ignoring advice that it was unseemly of him to deal with a third-echelon U.S. official, Nakasone, on a Sunday, met President Reagan’s special envoy, Gaston Sigur, then a member of the National Security Council staff, to promise that Japan would carry out a full liberalization of its telecommunications market.

Nakasone then called in the vice minister of the Posts and Telecommunications Ministry and, to the humiliation of the Japanese bureaucrat, ordered him to put the promise in writing and hand it to Sigur.

Within three weeks, American complaints on the subject evaporated.

But such victories were rare. Months, even years, of prodding were needed to extract most reforms. Some ministries never yielded.

Reform Squelched

Determined to embark on a “bold innovation” of Japan’s egalitarian education system, which emphasizes learning by rote, Nakasone tried to name a chairman of a reform commission from outside the education community. But members of his ruling party joined with the ministry’s bureaucrats to force the prime minister to name an educator.

The commission’s final report squelched all meaningful reform.

On the one occasion Nakasone did rely on bureaucrats, he suffered his greatest political setback. This was the scrapping last spring of a proposed overhaul of the tax system and the introduction of a 5% value-added sales tax. Only one part of the reform--elimination of the tax exemption on savings--was implemented.

On some issues, Nakasone chose not to challenge the old order. On his first trip to Washington, he rejected American appeals for an opening of Japan’s agricultural markets and never budged from that position.

Nonetheless, other government barriers to imports and doing business here have been lowered to the point that it is now the insular minds of Japanese businessmen and consumers that keep Japan as the odd man out.

Trade Surplus Out of Hand

A survey by the firm Booz, Allen and Hamilton, published Sept. 28, found that only 12% of executives of 398 foreign companies in Japan felt that government regulations remain a significant impediment to doing business, while 68% said they did not stand in the way. Cultural differences, 38% of the respondents said, are the major barrier.

The survey was commissioned by the American Chamber of Commerce in Japan and the Council of the European Business Community.

Nakasone’s greatest failure was of his own making.

A policy of administrative reform he initiated earlier as minister in charge of administrative management became such a fixation that Nakasone stuck to a budget-squeezing policy until earlier this year, long after Japan’s trade surplus got out of hand.

Under Nakasone, the global trade surplus soared from $20 billion to more than $100 billion. The surplus with the United States rose from $18.9 billion in 1982 to $58.6 billion. And, according to a report by the Tokai Bank, issued in September, per capita income in Japan this year will reach $19,500, topping the United States for the first time--by about $600.

Lower Living Standard

Yet the Japanese living standard remains far below the United States’ in terms of housing and working hours, and its consumer prices are the highest in the world, the bank report said.

Japanese workers must pay 5.6 times their annual income for a home, on average, compared with three times annual income for Americans, even though the average Japanese floor space amounts to only 60% of space in the United States, the report said.

A Nakasone commission did propose the reform of the economic structure, from one dependent on exports for growth to one in which domestic consumption would provide the spur to progress, but little has been done on that score. As he left office, the view that Japan is a “rich country with poor people” was just taking root here.

Foreign Ministry officials admit privately that from the beginning Nakasone consciously stressed a strong commitment to defense to win Reagan’s confidence and suppress U.S. frustrations on economic issues. But he did produce new government policies that were praised by both Reagan and Secretary of Defense Caspar W. Weinberger, who had been critical at first.

Criticized Defense Effort

No longer does Japan ban exports of weapons technology to the United States. Japan has agreed to join research on Reagan’s Strategic Defense Initiative, as the “Star Wars” missile defense system is known. Japan’s next-generation support fighter will be developed jointly with the United States.

Japan’s defense effort, Nakasone complained in 1982, had been “carried out on the cheap.” He said Japan “has not done enough.”

Five years later, allocations for foreign aid had risen by 37.8% and defense budgets by 36%. Finally, this year, the defense budget crept a fraction of a percentage point above the previous politically fixed limit of 1% of gross national product.

Public apathy toward defense, however, remained unchanged, as shown by the indifference here to the sale by Toshiba Machine Co., a subsidiary of the electronics giant Toshiba Corp., of sensitive technology to the Soviet Union.

Stressed Internationalism

And for all the popularity Nakasone himself earned with the “easy-to-understand” politics he promised in 1982, he himself appointed a successor, Takeshita, who is expected to make policy-making as obscure as ever--a man publicly committed to the consensus-style of decision-making that Nakasone condemned.

Power brokering within the faction-ridden ruling party, by which Nakasone himself won the post, remains the route to the top.

Before he took office, Nakasone complained that Japan, after its defeat in World War II, had developed the habit of “acting shrewdly and egotistically, like a small country,” only for its own benefit. He said that Japan must be “like a gentleman in international affairs . . . insisting upon our rights but also assuming our responsibilities.”

Yet only last July 6, as if admitting failure, Nakasone acknowledged that he was “keenly aware of the need to modernize Japanese thinking and institutions.” He also said that “domestic and foreign policy alike must strike out in bold new directions befitting an international state.”

Although often offering Reagan strong support for U.S. policies, Nakasone failed to strike out on his own.

Sought Respect as a Nation

When the Soviet Union shot down a Korean Air Lines jetliner in 1983, he passed to Washington information the Japanese had obtained by monitoring Soviet fighter pilots’ conversations, rather than announce it on Japan’s own authority.

At the 1986 summit meeting in Tokyo, only Japan initially took no stand on Libyan terrorism. And Japan’s reaction to troubles in the Persian Gulf, through which 55% of its oil flows, came as usual belatedly, halfheartedly and only after American pressures began to get out of hand.

Nakasone’s principal legacy, which promises to be Japan’s chief hope of avoiding complete isolation from the rest of the world, may turn out to be his advocacy of transforming Japan into an “international nation.”

Last Wednesday, in his final press conference as prime minister, Nakasone admitted that his government never accomplished what he most wanted--making Japan “a nation respected in international society.”

“We have not yet won international respect,” he said. “For that, we must correct (our faults), we must expand efforts to associate with foreigners and we must make appropriate donations (to the world). . . . Japan must carry out reforms at home to win a voice in diplomacy.”