Fukuda to Face Opposition Eager for Early Japanese Elections

Sept. 26 (Bloomberg) -- Yasuo Fukuda became Japanese prime minister yesterday, succeeding Shinzo Abe, 53, who quit after 12 months in office. The question is whether Fukuda and his government will last even that long.

``This will be an interim government,'' said Jun Iio, political science professor at National Graduate Institute for Policy Studies in Tokyo, who expects an election within a year. ``Without a general election, the situation isn't settled.''

Fukuda, 71, who will be authorized as prime minister by Emperor Akihito today, said his main mission is restoring public trust in the ruling Liberal Democratic Party, which lost control of the upper house of parliament to opposition parties in July. The opposition is pushing for an early general election, which doesn't have to be held until September 2009.

Fukuda said he will talk with the opposition about key issues, including an early election, and he appointed Makoto Koga, former secretary general of the LDP, to a new post dedicated to preparing for one.

``It's a temporary government,'' Kozo Yamamoto, an LDP lawmaker, said in an interview. ``We thought Mr. Fukuda would be the best choice for a temporary, election-management government after the confusion of Abe's prime-ministership and resignation.'' Yamamoto said he expects Fukuda to call an election between April and August next year.

Fukuda filled a leadership vacuum created by Abe's Sept. 12 announcement that he was quitting because he ``was unable to gain the trust of the people.''

Split Legislature

While the lower house of parliament voted strongly for Fukuda as prime minister yesterday, the upper house chose Ichiro Ozawa, leader of the opposition Democratic Party of Japan. Under Japanese law, the lower house's choice stands in the case of such a split. It was the first such split vote since 1998.

``The coalition's policies have created inequalities in Japanese society,'' Ozawa told a press conference after Fukuda's confirmation yesterday. ``This government must be dissolved as soon as possible.''

Fukuda will have to stabilize the political situation, deal with the emboldened opposition and try to extend a Japanese naval mission in the Indian Ocean supporting U.S.- coalition operations in Afghanistan. The mission loses legal authority on Nov. 1.

Fukuda will also have to reconcile existing plans by Abe and his predecessor, former Prime Minister Junichiro Koizumi, to reduce the world's largest budget deficit with demands by his party and its coalition partner to spend more on the elderly and in the countryside in preparation for an election. Since declaring his intention to lead the party Sept. 14, Fukuda has been vague on how he will achieve that.

Pressure to Spend

Fukuda's choices on the economy are likely to be driven by politics, said Kirby Daley, a Hong Kong-based strategist at Societe Generale Group's Fimat unit.

``This prime minister is not really able to control the LDP,'' Daley said in an interview. ``This LDP has one thing in mind and that is the next election.''

Daley said fiscal and economic reform and fixing Japan's pension system are ``out the window'' since the LDP lost the upper house to the opposition.

``They are going to resort to pork-barrel politics,'' he said. ``They are going to be spending again. It's the only way LDP knows how to take control.''

Yesterday, Fukuda's LDP agreed with its coalition partner, New Komeito party, to come up with new policies that address complaints by rural residents, the elderly and small businesses.

Left Behind

``We genuinely regret we rushed to reform and didn't provide enough safety nets for people left behind by reform,'' the agreement reads.

It calls for rural ``revitalization,'' infrastructure building and a reconsideration of plans to cut government contributions to the health care system for elderly people next April.

Fukuda said on Sept. 21 he'll seek to extend Japan's naval mission in the Indian Ocean in a new bill to be introduced during the current parliament session, which lasts until Nov. 10. Since parliament is unlikely to vote before the Nov. 1 deadline, the navy ships may have to return to Japan.

The opposition has said it will try to block that bill in the upper house.

Fukuda is Japan's first second-generation prime minister, taking office at exactly the same age as his father Takeo was when he became LDP leader in 1976.

At a press conference Sept. 23, Fukuda said he didn't desire that distinction. ``Honestly speaking, I didn't want to become the one involved with such a case,'' Fukuda said. ``It turned out be this way.''