Japan Premier Lands Surprise Deal on Reform

Prime Minister Morihiro Hosokawa and the opposition Liberal Democratic Party early today reached a surprise eleventh-hour compromise on political reforms that promised to end a mounting challenge to Hosokawa’s grasp on power.

In an unprecedented joint news conference on national TV that began well after midnight here, Hosokawa and LDP leader Yohei Kono signed a 10-point agreement containing a pledge to enact a new reform package.

The breakthrough, if approved by Parliament before the current legislative session ends at midnight tonight, would eliminate pressure on Hosokawa to resign or call a general election.

It would also clear the path for Hosokawa to meet President Clinton in Washington on Feb. 11 as scheduled and allow him to dispose of a logjam of pending economic measures.

The agreement stipulated enactment of the reforms before the debate on Japan’s fiscal 1994 budget begins, implying action by March at the latest. The new fiscal year starts April 1.

Parliamentary approval is expected but not guaranteed.

The possibility remains that new rebellions could occur in both Hosokawa’s coalition and Kono’s LDP to scuttle the compromise when it is put to a vote this afternoon.

A revolt in the LDP helped pass Hosokawa’s reforms in Parliament’s powerful lower house last Nov. 18, while an uprising by Socialists, the largest group in the Hosokawa coalition, led to defeat of the bills in the upper house Jan. 21.

Hosokawa, who suggested last August that he would resign if he failed to enact political reforms, conceded that the compromise contained “large concessions.”

The original package would have cleaned up Japan’s scandal-ridden political system by eliminating corporate and labor-union donations to individual politicians and changing the way the lower house is elected.

The prime minister was forced to drop the ban on contributions. Under the compromise, donations from any single company or union will be limited to 500,000 yen ($4,587) a year.

In the news conference, Kono cited this concession as the greatest “ordeal” for Hosokawa.

The Socialists, condemning corporate funds as a hotbed of bribery, had insisted vehemently on a total ban.

Hosokawa defended the concession by pointing out that the reform would limit politicians to receiving corporate funds from a single body. And in five years, all corporate and union donations would be banned.

Tomiichi Murayama, the Socialists’ chairman, called the concession “unfortunate but unavoidable.”

He said the party’s leadership would back the compromise, but he added that members’ approval would have to be sought later today.

Hosokawa said he and Kono share the belief that “without reaching a conclusion to the problem of political reform, which has been debated for more than five years, the economy will not perform well. Recovery of the people’s trust in politics will be impossible. And international trust in Japan will decline more and more.”

Even with the compromise, the reform bills would constitute the biggest overhaul of Japanese politics since the American occupation of Japan after World War II.

Parliamentary red tape forced the compromise. With only a day left in the current session, too little time was left to print revised bills, as required.

Now, a 20-member joint committee from the upper and lower houses must approve the compromise by a two-thirds majority. With one Communist and a member of an upper house splinter group expected to vote no, as few as four LDP members of the joint committee could sabotage the agreement.

If the committee approves it, however, a simple majority in both houses would be sufficient to approve the government’s four original reform bills, each stripped of an enforcement date.

Revisions to implement the Hosokawa-Kono compromise, as well as a date for enactment, would then be added during the next session of Parliament, which begins Monday.

A new lower house electoral system was expected to lead toward a two-party system capable of producing changes in government. Until last summer, when their 38-year rule was broken, the Liberal Democrats had towered over an array of opposition parties, none strong enough to mount a power challenge on its own.

Only by embracing seven parties in the lower house and eight in the upper chamber was Hosokawa able to take power in August.

Until now the system for electing lower-house representatives enabled a candidate to win with 20% of the votes or less and led to a proliferation of small parties. It would be replaced with a combination of single-seat districts and proportional representation.

A method of counting party votes by regions, instead of throughout the nation, was also approved.

Redistricting would substantially decrease the weight of farmers’ votes, which are now worth about three times that of urban votes.

Saturday’s joint appearance by Hosokawa and Kono symbolized a new relationship between ruling party and opposition: Never before have a prime minister and an opposition chieftain appeared together at a news conference.

The two announced their agreement after more than six hours of talks attended by only Ichiro Ozawa, deputy chief of the coalition’s Renewal Party, and Yoshiro Mori, the Liberal Democrats’ secretary general.