A new leader but unknown path for Japan

Yasuo Fukuda has been Japan’s prime minister for only a day, but he already has made it clear that he’s aware of the dire predicament facing his once-vaunted Liberal Democratic Party.

The government has “its back to the wall,” said longtime lawmaker Fukuda, 71, after tinkering with the political machinery he inherited Tuesday from discredited predecessor Shinzo Abe. “If we take even one wrong step, the LDP could possibly lose power.”

That blunt talk has yet to be matched by any explicit ideas about how the new prime minister intends to rescue a stumbling party that may be forced into an early election at any time. The LDP was so eager for a pair of veteran hands on the tiller that its two-week rush to crown Fukuda avoided the more awkward task of thrashing out coherent policies.

Instead, the prime minister arrived in office to low expectations, tepid enthusiasm and clashing assertions over how he intends to govern, particularly over the economic reform agenda that has animated Japanese politics since Junichiro Koizumi became prime minister in 2001.

Does Fukuda plan to continue the economic reforms associated with Koizumi, as some insist, cutting wasteful public works projects and trying to get Japan’s massive public debt under control?

Or will political realities force the LDP to return to its infamous pork-barrel ways, using public funds to buy the loyalty of voters outside big cities? And if so, will Fukuda have to raise taxes to pay for it?

Even LDP members say they are confused.

“I have no idea about Fukuda’s policies because there was no debate whatsoever in the campaign,” says Taro Kono, one of the LDP’s younger lawmakers. “I wish he would clearly disclose what his policy is on the issue of reform. Because at the moment, I have no clue.”

Nor is there any consensus on whether Fukuda’s appointment of four senior back-room brokers to key party posts represents a restoration to power of the factions that once ruled the LDP but were marginalized under Koizumi and, to a lesser degree, under Abe.

It was LDP faction leaders who sought out the charisma-starved Fukuda to save the party from the self-inflicted disasters of the last year under Abe, who is 53 but was derided for governing like an irresponsible teenager and fulfilled that characterization by suddenly walking away from the job Sept. 12.

Fukuda played the reluctant conscript throughout the campaign to succeed Abe, professing to be running more out of duty than ambition. As the front-runner from almost the start, he never articulated firm positions. Instead, he declared plans to operate on the principle of jiritsu to kyosei, an ambiguous -- if not contradictory -- slogan that combines “harmonious coexistence” (kyosei) with “self-reliance” (jiritsu), and which has observers scratching their heads on what that means for economic policy.

Lacking a popular mandate, Fukuda may also find himself constrained by circumstances against any bold moves. Japan’s debt load, as well as wary foreign investors, may rule out massive new spending, no matter what the demands of regional party bosses.

Nor is Fukuda the master of his party the way Koizumi was. His route to power met unexpectedly strong resistance from former Foreign Minister Taro Aso, the only other candidate, who ran a dynamic campaign that included pledges to address regional economic disparities with government help. Aso refused Fukuda’s offer of a post in the new Cabinet. And his respectable showing suggests there are big pockets within the LDP willing to defy the instructions of party elders.

“The bigger-than-expected support for Aso strongly suggests that the regional LDP members favor expansionary fiscal measures,” said Hiromichi Shirakawa, Credit Suisse’s chief economist for Japan. “And while the LDP may not go back to old-style public works spending, I think you’ll see increased subsidies to local governments.

“Fukuda may pay lip service to Koizumi’s legacy of fiscal reform. But the next election is going to be fought over regional voters.”

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bruce.wallace@latimes.com