WHO REALLY RUNS JAPAN? : On Leadership, Nakasone Ranks Historical Insight the No. 1 Quality : Ex-premier: In his five-year reign, he boosted defense spending, strengthened security, helped revive U.S. relations.

The year was 1983. Then-Prime Minister Yasuhiro Nakasone was determined to privatize Japan National Railways, a bureaucratic behemoth awash in red ink. There was one problem. The railway’s president was resisting. So Nakasone did what no politician had done before to one of Japan’s powerful bureaucrats.

He fired him.

“It was a giant earthquake to the bureaucrats,” Nakasone recounted with relish in a recent interview.

His critics screamed that the tactic was brute and bullish.

But it worked.

Nakasone privatized the railway, telephone and tobacco monopolies.

In a remarkable five-year reign, he also boosted defense spending, strengthened security ties with the West and helped revive U.S.-Japan relations through his “Ron-Yasu” friendship with then-President Ronald Reagan.

Initially feared as a dangerous nationalist bent on rearming Japan, Nakasone turned out to be one of the nation’s supreme statesmen, analysts say. And amid the growing cries here for stronger politicians, Nakasone’s experience provides a lesson in leadership.

“Nakasone was as decisive a leader as any who had come to Washington in a long time,” George P. Shultz, Reagan’s secretary of state, wrote in his memoirs. “Unlike other Japanese leaders who waited for consensus to form, he was ready to move out front.”

Nakasone was born in 1918, the son of a lumber merchant. He graduated from prestigious Tokyo University and, campaigning on a white bicycle to symbolize the emperor’s horse, won election to the House of Representatives in 1947 at age 29. Always outspoken, he wrote a paper saying the Allied Occupation was crippling Japan’s democratic development. Gen. Douglas MacArthur reportedly tore it up in fury.

Nakasone’s direct, showy style also handicapped him in Japan’s political world of consensus and ambiguity. In his 47 years in politics, the Liberal Democrat headed ministries such as transportation, international trade and defense. But he was so unpopular that party kingmakers promoted even the bungling Zenko Suzuki over him for premier.

Nakasone finally won the top post in 1982 in a deal with the Liberal Democratic Party’s then-godfather, Kakuei Tanaka. “I had always intended to be prime minister,” he said. “So by the time I finally (was), I had had 20 years of preparation.”

A lifelong student of history who still reads voraciously, he had enough policy ideas to fill 20 notebooks. But he also had a grand vision of leadership--to be Japan’s first “presidential prime minister.”

In short order, Nakasone made his mark with a surprise 1982 visit to South Korea to improve relations. In January, 1983, he triumphantly visited Washington bearing political gifts such as a Japanese defense-spending increase, pledges to exchange military technology and a plan to liberalize import duties on 75 items. He established an instant rapport with Reagan, telling him: “You be the pitcher. I’ll be the catcher.”

To push his domestic policies through a reluctant bureaucracy and political world, analysts say, Nakasone relied on two crucial elements: shrewd staff selection and direct public appeals.

Analysts say his masterstroke was appointing fellow Liberal Democratic legislator Masaharu Gotoda as his chief Cabinet secretary and point man to bring the bureaucrats to heel. Gotoda invoked fear and respect among bureaucrats because of his own long experience as one--particularly his post heading the national police apparatus. To handle the Liberal Democratic Party, Nakasone appointed Susumu Nikaido, Tanaka’s chief lieutenant, as secretary general.

“It was envisioned that if the three of us teamed up, it would be the most invincible combination ever,” Nakasone said.

He also bypassed the bureaucracy by forming his own brain trust of 30 advisory councils on everything from deregulation to education reform and using them to appeal to the media. Nakasone said he got the idea from President John F. Kennedy.

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His effectiveness was enhanced by his tenure--the longest of any prime minister since 1972. His record public approval ratings helped him fight off his political enemies.

Still, he failed in introducing a consumption tax--a failure he blames on his own impatience. Many of his council recommendations, such as more educational flexibility, were ignored. “Nakasone’s government raised a variety of issues, but none of them flowered or bore fruit,” Gotoda was quoted as saying.

Nakasone, who handpicked his successor after he had served an extended, maximum term as prime minister, does not hesitate when asked the most important quality for a leader.

“Historical insight,” says Nakasone, who still serves in Parliament, “is the most important foundation for good decision-making.”