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December 27, 2001
[talk] What should be questioned in the realization of the Prime Minister's Leadership
Michio Muramatsu: Professor at Kyoto University
Born in 1940. Graduated from the Legal Department of Kyoto University in 1962. Professor of the Legal Department of Kyoto University in 1976. Book authorship includes Postwar Japanese Bureaucracy (Toyo Keizai Shinposha, 1981) for which he received the Suntory Award, Regional automy (Tokyo University Publishing 1988) for which he was awarded the Fujita Prize, Japanese public Administration (Chuko Shinsho, 1994) and Text for Study of Public Administration (Yuhikaku, 2001)
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Why can't Japanese politics break the doldrums in which Japan finds itself in today? Prime Minister Koizumi who is trying to proceed with reforms under his own leadership is facing the resistance within the LDP and is forced to compromise. There are also arguments on abolition of so-called majority party investigation. However, more importantly, there is progress in the direction of reforms in the system of personnel within the executive branch has been proposed. It is necessary to conduct serious discussions in this direction. We spoke with Professor Michio Muramatsu concerning the way of the legislative branch and the direction of reforms of the bureaucracy.
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Another aspect of majority party investigation goes to the relationship between government officials and politics. The bureaucracy is at present committed to negotiate what should be done by the politicians, and but it should remove itself from a world where it takes upon the duties of politicians, and consider the range of action and formation of policy from the viewpoint of how the administration should be.
Bureaucratic institutions have until now been able to upkeep political neutrality, but it did not develop specialists. Rather than nurturing policy specialists, their policy was to negotiate with politicians and to write long sentences. It is now a good opportunity to argue what is the knowledge necessary for new bureaucrats. In the reforms of government officials, the most important theme is the retention of political neutrality in their hiring and promotion. One proposal for reforms was determined by the Cabinet without widespread debate or absorption of the majority, but in the execution of the reforms, all related parties should participate and think over the issues at hand.
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Kudo: There are now debates over the abolition of the pre-investigation by the majority party concerning the leadership system of the Prime Minister. What do you think of this?
Muramatsu: Because such debates occurred, I think that it provides a good opportunity to consider the relationship of politicians and bureaucrats in the formation of policy and legislation. I think it was beneficial for such debates to occur, and have thought that it was an issue which should be argued. If we are to change the policy formation and structure of Japan, it started with the administrative reforms in the 1990's, and the judicial system was put under scrutiny. As such, the legislative process was bound to be put into view, and I think that in this sense a basic argument has begun. However, for this debate also, it is necessary to have an objective recognition of the relationship between politics and administration. For instance, there is the issue of bureaucratic sectionalism, and in the background there are groups of Diet members who have supported proposed statutes and budgets through the process of majority party investigation.
The recognition of administrative reform conferences from 1996 to 1997 was also incorrect. It stated that the ministry bureaucratic system determined all aspects and that Cabinet meetings had no power, so that with no influence from politicians, it was bound to end in only administrative reforms. However, if we debate the pros and cons of the majority party investigations, we are back on the right road.
There is very little experience in Japan of giving power to one person. Toshimichi Okubo in the Meiji era could be said as one of those people, but in the postwar period there have been no such examples. Within this experience, we have to think of what type of leadership should be given to the prime minister. Should we make a framework where it is especially costly to represent individual interests, or should we conduct strict adherence to party lines under the prime minister's leadership? Can we develop the politicians morals to support the prime minister and the party president that they have chosen? This is an issue of the legislative process within the Diet, but it is also a question of the party's institutions. Therefore, it is not as if we can just abolish majority party investigation in a simple manner.
We must consider the influence of such a position. Without a total design of the relationship between the ruling party and the government, the relationship between public officials and politicians, the method of debate within the Diet, the way of political parties and the relationship of the Cabinet and the minority parties, we can not proceed. In other words, the debates should not be limited to that of majority party investigation. Especially important is the intra-party opinion consisting of general party members within the parties.
Kudo: Whether or not majority party investigation is to be abolished is the question of whether the coordination of opinions is done within the party or in the Diet. Considering the political situation in Japan today, is this a necessary evil? It has become an obstacle for Prime Minister leadership and become separate from the senses of the people.
Muramatsu: I think there was a period when majority party investigation was a necessary evil in postwar Japanese politics. Especially during the Cold War, Japan had to have a system whereby policies could be created in an efficient manner. The pre-investigation by the majority party began since the Ikeda Cabinet, and up till then there was no such investigation, but there were strict criticisms from the majority party representatives in the Budget committees, and I believe that the custom of consulting in advance of the voting in the subcommittee of the Policy Research Council was developed gradually. The fact that the ruling party Policy group or its subcommittee could not determine the public interest in a rational manner can be seen in the situation whereby the allocation of public works is fixed and doesn't change at all. Policies which should be dynamic are in a situation where everything is fixed, however, in reality, there is only movement between warring parties.
Within the background of ever continuing economic growth in the postwar period, there was an annual allotment of new funds to be distributed to individual interests. It was correct for the consideration of everybody to how such new funds would be allotted, and to grasp social needs, there was a long period in which the majority party investigation was effective. However, at present, the issue is not the coordination of interests, but how new policies should be created. As long as the basic structure of the era has changed, I believe that we must change the ways of the legislative process and political parties as an obvious result.
Presently, Prime Minister Koizumi is trying to take a leadership position based on his popularity with the people. I do not deny the importance of structural reforms, but I think that there should be a more flexible combination with policies to revitalize the economy. However, this is a difficult task within the coordination of power relationships which are fixed. It is an age when the majority party investigation may become a bottleneck, and the new issue is whether or not we can create a framework for flexible implementation of leadership. Even with the new Prime Minister, there is extremely little room for leadership to be taken, and it is difficult to create new policies. This structure must be changed.
Kudo: In other words, within the systems under the postwar growth era which are being reconsidered, we must also take to issue the legislative process and the political parties themselves?
Muramatsu: Yes. I consider the question of non-performing assets to be the most important issue today in Japan. Why can't such issues be solved under present politics? These individual problems are the questions we must ask today. There is no model of democracy, which should be taken as an example for Japan and in the US and the UK, there are democracies which match the circumstances of their respective countries. In these countries, the leadership institutions of the parties are not as deeply involved in policies as they are in Japan. As long as they are chosen, the Prime Minister or the president should create their policies flexibly, and take the responsibility for explaining their policies afterwards. It is not only a framework whence the strong involvement of the ruling party into the political process cannot break the deadlock but also makes the responsibility of the prime minister unclear.
In the question of the Japanese Foreign Ministry also, the reason that the Ministry can battle Minister Makiko Tanaka is because politicians stood behind them and it now has the support of the prime minister. Unless we argue from the assumption that the ruling party controls Japan today, we cannot get to the heart of the problem. This is the issue of how the actions of the ruling party can be restricted. Normally, the expectations would be for the minority parties, but we can't expect anything from them, and the bureaucrats cannot expect anything by sticking to their respective representatives in the Diet. The only way out is to change the framework of the parties. Can a structure whereby the opinion of the general party members can influence the processes? In other words, the framework that Japan must consider from now on is not whether the British model or the American model can be applied, but what framework can solve Japanese problems.
Kudo: The Koizumi administration is challenging the status quo for reforms albeit slowly under the leadership of the Prime Minister. However, there are still many forces resisting this within the LDP. I believe that there is a basic paradox in this circumstance. What do you think we can solve this issue?
Muramatsu: Looking from the viewpoint of leadership, it appears that Prime Minister Koizumi is doing well. I think that this is because he has the qualities to be a leader. Although there are yet to be details, there is the impression that he is acting in a strong and immobile manner. At times, he does compromise. However, there are some aspects where he has lost confidence because he compromised when he didn’t have to. However, in toto, he has informed the Japanese people what the issues are. He also has his own direction. In particular, from the viewpoint of leadership by the Prime Minister, it is a fact that he has progressed greatly. Although it is of little use to state ideals, the number of secretaries to the prime minister has increased, and the support system is being built in reality within the Cabinet Office.
There is a possibility that the Council on Economic and Fiscal Policy will play a large role in the future. In fact, we don't know whether what has been decided there will all be realized, but the reason for such a strong presence is because the prime minister himself supports the committee and there is the sense that it is a policy partner for the prime minister. In the future, to strengthen such committees as the Council on Economic and Fiscal Policy will be a method for brushing up the Prime Minister's policies.
If the Prime Minister consider the issues long and hard, his leadership should be implemented in a natural manner. What is interesting is the results of opinion polls such as the one taken by NHK and reported in the December 9th, 2001 news, whereby there were many opponents of individual reforms such as the reform of medical insurance, but the total support percentage has risen. Individually the opinions were opposed, but that Mr. Koizumi is doing well overall was evaluated, and as long as this occurs, Prime Minister Koizumi will continue to be in power.
I believe that there are methods of structural reform while stimulating the economy, but there are many issues which must be revised the structural reforms that the prime minister is undertaking. However, on this point, regardless of the fact that the prime minister is trying to take leadership, the way of thinking of the "zoku" representatives of partial interests and the individual institutions is to pull him back using arguments of responsibility and examples of hiding past mistakes, and this is occurring in both the public and private sector.
Concerning the recent debates on the majority party investigation, there are arguments that if there are pre-investigations or strict adherence to the party line are not determined in advance, what kind of procedures for session of the main Diet session and the budget committees are required, such as prolonging the time limit for consideration in advance, on implementing the party line under the leadership of the party president.
Prescription of the term of the party presidency to be four years, which is equivalent to that of the Diet members should be effective to increase the power of the president. I also believe that the revision of the official nomination procedures of the candidates for Diet membership is one solution. In the regulations within the LDP concerning procedures for session of the Diet, it will become necessary for the creation of regulations which raise the status of the top leadership in a continuous manner.
To change the systems which do not fit the present situation, it is important that the debates continue, and it should not only cover the administrative and the judicial branch, but also delve into the legislative process. The legislative process determines the contents of policy.
Kudo: How should the role of bureaucracy, in other words the issue of public officials, be handled under the debates up to now?
Muramatsu: The direction of reforms of the public officials has been determined within the Cabinet, but for changes in the Statute concerning Public Officials, the debates from now on will be more important. I believe it a shame that the interest of public opinion concerning the reforms of the public official system is low. I think that the procedures up to determination of the Cabinet leave much to be desired.
The majority of people have not participated in the debates. I believe that in administrative reforms such as the restructuring of the ministries and agencies should be left to the leadership of the prime minister, but the system of public officials is an issue that changes the patterns of job choice among the Japanese youth, and it is characterized by the long term which cannot be restored for a long time.
The political power is changed by whom considered this system, and I do not believe it is beneficial that the contents are determined and publicized by the Cabinet. I think that the issue should be taken up with more clarity.
There are many weak aspects to the proposed reforms submitted at present, but I think that the most serious issue is that of the examinations and hiring of new recruits. The next proposal reform assumes the maintenance of the past career level system and the number of those hired from those passing the career examinations are proposed to increase fourfold. Next, the people who are hired are to be chosen under the jurisdiction of each ministry. However, the issue here is the maintenance of political neutrality in the hiring of public officials. There is a rule concerning the interests of politics which occur where there is discretion. If there are people who pass the examination among the fourfold increase, those who have the support of politicians must be hired. Furthermore, the fourfold increase is the bottom line of the determination of the evaluation of the quality of public officials. It is not difficult to come within the fourfold increase.
Another point which received my attention is that, specialists among the administration were not nurtured, which became clear, for example in the financial administration. How could the career officials learn about the actual positions and receive the most recent knowledge? In finance, medical insurance and other such areas, the job of specialists in each area should not be done by generalists, but by specialists who hold authority and responsibility and can receive good positions. Within the job of specialists, there are many who should receive the best treatment according to their importance. In other words, while the ministries hire high quality people, they did not nurture specialists, and their capabilities were used to negotiate with politicians and write long sentences. If these people do the coordination of interests which should be carried out by politicians, the circumstance whereby public officials leave the realm of bureaucracy. I think that this is a good opportunity to debate what should be the necessary knowledge for new bureaucrats. If we are to maintain career status, there should be a special moral code for these people and good treatment should be given.
At the same time, I think that there is a unique noblesse oblige among such officials, and we should return to the prewar and the period just after the war in the necessity of recognizing the position of these people once more.
There are the arguments that the chosen people have been picked through a competitive process, but competition in the public sector should be carried out according to the specification of results, and wouldn't this just cause the maintenance of the majority party investigations? In these cases also, unless good people are hired in the beginning, the pride of the public officials cannot be maintained. If the entrance is wide, these people would be evaluated at the bottom line of those passed the examination conducted?
Kudo: What type of bureaucrat do you think is necessary for Japan in the future?
Muramatsu: In a book I wrote a long time ago, I have said that the ideal bureaucrat was a technocrat which does not cause technocracy. Technocracy indicates the control of politics by bureaucrats through specialization, but I think that it is possible for specialist abilities to be high but not controlling, the control being the responsibility of the political parties.
In contrast, for example, the Ministry of Finance has gone too far into politics. The bureaucrats have a huge influence on the contents of policies. I think that this is true. However, there is the aspect of bureaucrats not working as bureaucrats in fear of politicians. There is no use in listing all the examples, but during the Obuchi Cabinet, there was a sea accident by the JCO, and the secretary of the prime minister did not want to interrupt a luncheon by the prime minister and did not inform the information of the Science and Technology Agency to him. During the Murayama administration, there were no bureaucrats who pressed him to utilize all his authority. The people who are in responsible positions within the administration should conduct its manner with the responsibility of the executive branch. In relation to the majority party investigation stated earlier, the coordination of political interests should be left by the bureaucracy to the politicians, and should be left alone, even if there is the possibility of a vacuum occurring.
Unless the bureaucracy stays out, the bureaucrats will hold the responsibility of muddy coordination of the politicians, and they will become tired in their individual lines. If the bureaucrats feel that work makes their life worth living, the bureaucrat himself will take time away for his subordinates and ignore the nurturing of these subordinates, which might result in the self-destruction of the bureaucracy.
The system of top ranking bureaucrats in Great Britain is not of the decision maker, but they have continued to work in a steady manner. The top ranking appointments in the American government do important work. The present proposals for reform of the public official system takes as its model the American case in increasing the mobility of the officials, but the US has its own history. Both countries have developed their systems through hardship. The US has a pool of political appointees from think tanks and universities, and high ranking government officials retire into universities and think tanks and international organizations. There are such prospective officials in both the Democratic and the Republican parties, so that they are appointed with each change in administration. Japan does not haven that luxury. Therefore, the bureaucrats have nowhere to escape, and must follow the commands of the politicians.
Returning to the subject of new ideas for those officials retiring from their ministry posts to the private or semipublic sector, I believe frankly that the regulations are too lax. This is because there are no a priori regulations of these practices. There is the argument that if there are problems, they should be solved after the fact, but what happens if there are an unlimited number of problems? Wouldn't the dignity of the Japanese bureaucracy which is already endangered drop? Public officials have the power to implement a certain amount of authority. Therefore, we must firstly consider that their pay is obviously lower than that of the private sector counterparts.
Another question is the self control of the execution of authority, but there is the issue of whether the former bureaucrat can control himself after he leaves his ministry post. Here too there should be some sort of rule in advance, and there should be control by a committee which oversees such matters. I don’t believe that it has to be the Personnel Agency at present, but I do think that there should be some a priori regulations of the jobs taken by former ministry officials.
I shall repeat that the reforms of public officials has been determined by the Cabinet without widespread debate, but the present situation is tenuous.
Kudo: Thank you very much.
投稿者 gnpo : 09:35 AM
[paper] To Proceed with the Structural Reforms of Politics
Yasunori Sone: Professor, Keio University
Yasunori Sone: Professor at the Keio University, the head of provisional private political investigative committee. Professor Sone was born in 1948, majored in political science and policy analysis and obtained a Ph.D. at Keio University. His articles include "Kettei no Seijigaku","Gendai no Seijirironn","Political Dynamics in Contemporary Japan"; his collaborations include: "Political Science","Kono Seijikuuhaku no Jidaini".
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Progress on Prime Minister Koizumi's structural reform has not been very smooth. This is not so much because of the vagueness of its objectives and strategies, but rather it is because of the delay in political restructuring to adjust relationship between the cabinet and the ruling party.
People are placing much expectations on Koizumi’s reform plans, but in order to carry them out, we think that the relationship between the cabinet and the Liberal Democratic Party(LDP) need to be changed to establish a Prime Minister-led mechanism to decide policy. Based on this thought we worked on our ideas into ‘Proposal for political reform to support Prime Minister's initiative in November.
Currently, ruling parties hold an examination(Ruling Party Examination) on cabinet bills prior to the Diet debate, but this is the convention that need to be reviewed in the first place to set up the Prime Minister-led mechanism. After we had produced the proposal, this unfamiliar term Ruling Party Examination aroused opposition among LDP members and became the point under political debate. But we should remember that changing conventions entails changes in the party and bureaucrats. This relationship between the cabinet and the ruling parties is the biggest challenge that has been left untouched throughout the past political and administrative reforms
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Prime Minister Koizumi still retains high approval rate, which stands at more than 70%. The rate did not come down even during the Diet debate on special anti-terrorism bill, which took place after September 11 terrorist attack. Actually, some people even argue that if anything, the terrorist attack dampened criticism emerging in the LDP around the end of August and thanks to that, Koizumi could rally his support. Still Koizumi's reform has not been conducted as much as expected. Some people criticize that what he did on the medical insurance system and public corporations such as Japan Highway Public Corporation were not restructuring but compromising. However, leading bureaucrats and LDP members think that Koizumi has won on these issues. That is because Koizumi brought up a process, which may skip the prior consultation to the ruling party and this process can be applied to the issues of budgets and privatization of the postal services. Also, if he can submit bills directly to the Diet and open debate without going through the prior examination, he will stand a good chance of passing his proposals. In the past one month, the issue of Ruling Party Consultation has come to the fore as a focal point of political debate. Currently the debate is conducted in a form of a confrontation between "Resistant Group" to Koizumi's reform, which tries to protect vested interests and Destroyer, which support his reform. However, if this debate can be turned into a debate, which focuses on the political process concerning Ruling Party Examination; Koizumi, even though he is in the minority in the LDP, can stand a fair chance of wining. So far Koizumi has been bluffing with the high approval rate and the similar stance of the Democratic Party of Japan; but if, in addition to these, the cabinet gains the authority to decide policy; it will make the situation very difficult for old guard to resist Koizumi's reform plans.
The Koizumi cabinet is very popular in spite of the economic slowdown and increased unemployment. This is an anomaly in politics. The fact that Japanese still expect Koizumi an essential factor in the future of his cabinet's reforms.
We must remember that in last July, when the upper house election was held, 40% of the voters did not support the Liberal Democratic Party but did support Mr. Koizumi. Thus, recent opinion polls do not necessarily mean that the approval rating of the LDP is on the rebound.
By now, the policy concept of Koizumi cabinet has been submitted. Therefore a crucial factor for Koizumi cabinet is whether it can carry out the structural reforms based on its policy concept.
The Japanese government has tried most conventional fiscal and monetary measures over the past 10 years without success, thus this government felt that it is necessary to undertake structural reforms. "Structural reform" is an ambiguous phrase that can mean, individually or severally, to put the economy back on the long-term recovery path, make the economy more efficient and/or make Japan's market economy more transparent, free and fair.
What is common in these understandings is that people are aware that this nation's finances and companies cannot recover from the current stagnation by using stopgap measures and it is the time to make the economy more efficient.
However, in general structural reforms are mid-term and long-term measures.
Recently more and more people want instant stimulus measures, since the economy has been deteriorating and showing signs of deflation.
If the government is asked to cope with deflation in general, it must choose either fiscal or monetary policies. This is the problem it must solve.
Of course the government can handle the situation by asking the people to wait for economic recovery before they can implement economic structural reforms. But I think that the government should have prepared a short-term, structural reform policy option up its sleeve to counter those who favor economic stimulus measures.
I suppose that the people view the government's structural reforms as if they are like the corporate reforms of Nissan President Carlos Ghosn, who made an effort to rejuvenate the firm in a short time.
Locus of the resisitance
In general, the Japanese think that there are forces of resistance that are keeping the Koizumi cabinet's reforms from moving faster. This resistance force is comprised of interest groups, LDP politicians and bureaucrats who represent views of vested interests.
However interest groups and vested interests are found in every country and reforms are still carried out in many countries all over the world. In Japan, large-scale political reforms are rarely implemented, but such political reforms as the one being proposed by Mr. Koizumi have been carried out very often in foreign countries.
Raising the question as to why the Koizumi cabinet's reforms cannot simply be carried out, has brought to light the problem of policymaking in Japan. Advocacy-based opinions are not reflected in the government's measures because they are frequently blocked by the above-mentioned vested interests.
It is standard political practice that policies are realized in the form of laws or the budget and legislation necessitates passage in the Diet. Traditionally in Japan, even cabinet sponsored bills can not be submitted to the Diet without the approval of the ruling parties. Such an approval is dubbed as the ruling partie' examination and an approval before bills are introduced to the Diet is called the prior examination . Therefore, it can be argued that the resistance to reform is not in the Diet but in LDP committees, such the Policy Council or the General Council, where the prior examination takes place.
This custom of the screening system, which brings the decisive and substantial deliberation on bills to committees in the LDP, has come into being because it is convenient for the LDP Diet members and the bureaucrats who require the passage of bills.
If the ruling parties approve a bill it is almost automatic that the bill will be passed as they constitute a majority in the legislature. This means that the substantial discussion on laws disappears from the Diet and the roles of the ruling parties mainly consist of the Diet Affairs” for passing drafts.It is generally said that this custom is one of the features of the parliamentary system.
Looking back on our history, this system became a custom only since the first half of the 1960's when the LDP dominated the government. In a parliamentary system like that of the UK, there is nothing like the ruling parties' prior examination.
What would happen if the cabinet-sponsored bills could be submitted to the Diet without the approval of LDP committees such as the Research Bureau and the General Council. Of course it would be OK by law. But even under the current situation, many lawmakers oppose the Koizumi cabinet and if bills were to be presented to the Diet without this traditional process inside the LDP, an all-out war would break out
One can imagine that under this scenario the ruling parties' lawmakers will vote against the bills because the examination process is skipped, thus defeating the bill in the Diet. However I suppose that the lawmakers' remarks made publicly in the Diet will be different from remarks in a closed-door meeting inside the LDP.
At this point, the picture does not have to be completely pessimistic, but this means if the Diet becomes the main battleground for legislation, the outcome will be difficult to predict.
Currently, political structural reform, in particular the relationship between the cabinet and the ruling parties, has not been discussed adequately. Therefore, even though Prime Minister Koizumi emphasizes the importance of the economic structural reforms, I can assume that many of his reform plans are doomed to fail because opposition elements insist on following the conventional intra-party policy formulation procedures.
Please refer to the 21st Century Commission's proposal calling for political structural reform under the Prime Minister's initiative in which these points are elaborated.
The commission held a press conference on November 8th to announce this proposal and delivered it to the Prime Minister on November 19th.
Prime Minister Koizumi instructed the LDP to consider the proposal and some lawmakers have reacted against it. If the Prime Minister wants to accelerate his reform, which is expected by the Japanese, he must take the initiative to create a Prime Minister-led policymaking system that changes the relationship between the cabinet and the ruling parties.
I suggest we take “abolishing the prior examination by the ruling parties' as the starting point of our discussion.
A war or a compromise
Prime Minister Koizumi will have to make an important decision as to whether it should be an all-out-war or a compromise. Apart from this scenario, there are several moderate alternatives. To categorize them roughly, we will have these two options.
Generally speaking, a compromise is realistic and likely to happen. One of the interpretation of the parliamentary system views the prime minister as exceeding his rights. Based on this view, some suggest that Prime Minister Koizumi concede and side with the majority of his party.
On the other hand, Koizumi won an overwhelming victory and was nominated for Prime Minister in the Diet. In addition, he won the LDP's presidential election after the upper house election without opposition. If they were going to resist his campaign promises, members of LDP should not have voted for him. If LDP members thought that they would make Mr. Koizumi their party president for winning the upper house election him only to oppose him or do anything they want after the election, LDP's intra-party procedures were not at all reasonable.
The reason that some have behaved in such a way is based on the idea that the Prime Minister is only required to act as a figurehead of his party.
The common understanding that the prime minister as a figurehead can be replaced, but the party should be stable is merely remnant of the so-called 1955 system and is difficult to theorize. I think whether Prime Minister Koizumi can choose an all-out war, not to opt for a compromise is one of the significant factors for the future.
Another task for the cabinet is to name several heavyweights as cabinet members.
Moreover it is important to establish a mechanism to absorb opinions inside the party and discuss the policy-making process in the cabinet. I am not optimistic about the Prime Minister's ability to initiate parliamentary change and settle the current confrontation between the cabinet and the ruling parties.
The current system lacks several factors that would allow government policy to be controlled by the government under the cabinet's initiative centering on the Prime Minister. Although the Prime Minister's supporting staff has been strengthen considerably in this year's realignment of ministries and agencies, it remains fragile.
Prime Minister Koizumi has established a special team comprised of bureaucrats of ministries, which do not have minister's secretaries, but it is still not enough.
Presumably it will be required to create some political systems like the Policy Unit implemented by the former British Prime Minister Thacher and the current Prime Minister Blair and discuss how far the prime minister's rights to decisions on personnel.
Learn something from Mr. Carlos Ghosn's method.
Prime Minister Junichiro Koizumi's opinion that he should carry out structural reform with no sanctuary, including the pain, has some problems but it is to the point. It is not unlike Mr. Carlos Ghosn's method of accomplishing Type V business recovery, i.e., rapid short-term recovery,Nissan's short-term restructuring. It is important for Nissan to maintain their competitive ability in the medium or long term, but for Koizumi it's necessary to consider the decisive reasons why structural reform can't be accomplished in the short term. Mr. Ghosn's four points for success with difficult restructuring are,
1. To have company-wide commonality in targets, priorities and strategies.
2. To try to make employees believe in their restructuring plan.
3. To listen to employees' opinions.
4. To make it clear that management believes employees. (Nippon Keizai Shinbun Oct.31,2001)
One of things that Koizumi can learn from these points is that he should make the target of structural reform clear. Then he should establish the priority between disposal of nonperforming loans and reform of special corporations, especially which special corporations are to undergo reform. Then he needs to decide the strategy for the target. But this is not a private firm, this is politics, so opposition parties and forces of resistance are an inevitable accompaniment. The next problem, however, is the extent to which there is a shared awareness that the Japanese economy must undergo structural reform. Koizumi's high support rate in the current opinion polls could be evidence that (2) people believe in the structural plan. At the same time, it has few adherents in the governing party. If that balance is upset, bureaucrats would adopt a wait-and see attitude.
Unlike private enterprise, people in politics must act under the inevitable constrains of multiple organizations and hard conflict. However, without forgetting the precedent of Shoji Matsuda, Toshiaki Kasai, and Masatoshi Ide and the privatization of the former Japanese National Railways in the Dokorin-tyo era, we need collaborators inside organizations to carry out reform. It is essential that we use their knowledge in the optimal way. This is what led to the failed privatization of the three postal businesses during Prime Minister Hashimoto's administrative reform, so it is absolutely necessary for Koizumi's reform of special corporations such as the Public Roads Administration.
In addition, regarding Mr. Ghosn's points (3) and (4), I think it's still not clear whether Prime Minister Koizumi is aware of them. That's why he is considering the worst-case scenario of confrontation in the LDP, policy deadlock, dissolution of the House, a general election, and political realignment. In short, when confrontation within the LDP occurs in the Diet, it will be clear who is for him and who is against him. If the Cabinet bill isn't approved at the same time, Koizumi can resort to dissolution. On the other hand, if it is a case of policy deadlock within the party's committees, his scenario of dissolution and general election can't be justified.
Dissolution and general election due to conflict in the Diet is easy to understand and can be seen as a means of carrying out the people's will. Koizumi promised from the beginning, "I'll desperately carry out reform" and the people count on him. That is why a Koizumi compromise within the LDP, if it's possible, would end in disappointment for the people.
The unusual concept of prior examination by the ruing party has emerged as a controversial political issue and has been accepted as a national issue by the people. However there are a few big roadblocks left before it can be thoroughly discussed and implemented. At least the custom of selecting ministers from the LDP's faction list when forming a Cabinet has been destroyed by Koizumi. Prior approval by the ruling party is also such a custom. Changing that means substantial change in the Diet, parties, and bureaucrats. The relationship between the Cabinet and the ruling party is the biggest problem left to be tackled by conventional political and administrative reform. Without that reform, it's difficult for the Prime Minister to demonstrate his leadership.
投稿者 gnpo : 09:28 AM
[interview] Reform of the Liberal Democratic Party and Proposals for Partial Policy Association
Koichi Kato: Lower House Representative
Born in 1939. Graduated from the Law Department of Tokyo University in 1964 and entered the Ministry of Foreign Affaires in the same year. Attained a Masters from Harvard University. Elected Lower House Representative in 1972. Cabinet Vice Secretariat for the Ohira Administration in 1978. Cabinet Secretariat for the Miyazawa Administration in 1991. Secretary General of the Liberal Democratic Party (LDP) in 1995. Wrote What Should be Done in Today's Politics: The Design of Japan in the New Century (Published by Kodansha) .
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Former LDP Secretary General Koichi Kato contributed this piece concerning the interim summary of the Koizumi reforms and the significance of the LDP reforms, the recent arguments for the development of a prime minister led system and the arguments recently concerning the government sponsored statute proposal of the abolition of majority party investigations and of strict adherence to party lines. In this contribution, Mr. Kato evaluates the success of the Koizumi reforms to move the axis of Japan as a whole, and emphasizes that the LDP reforms were initiated in the doubts of the Japanese people towards the significance of the LDP's existence itself. Furthermore, concerning the issue of a Prime Minister led system, he proposes an experiment of partial policy association within the Diet as an experiment.
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When looking at the issues confronting Japan today, (the Koizumi reforms) are said by some to be lacking in speed or not strategic. However, the method of Koizumi's reforms proposes in a unique manner an objective far from where they land, and even with the intra-party objections and resistance, the method taken will land at a goal far further than using regular methods. Therefore, it is obvious that it hasn't reached that objective yet, but it is clear that it is moving us further. This method will change the Japanese axis as a whole as long as the people continue to support Koizumi. The role that has been played by the LDP thus far was speedy and uncorrected passage of the plans set up by the executive and bureaucratic institutions within a political system of nationally regulated economy, and in return, by the rights to portion out the budget and allocate the national resources with their own hands, receive votes and continue to be in power. Of course, the assumption behind this is that the executive branch continues to match with the course of history, the national goals and the consciousness of the people, and when the LDP stopped having this awareness of goals, many of the Japanese started to disdain the LDP system. For Japan to respond to the era of great change in the world, the speed of the political decision making process must be increased. Within the graphics of opposition between the Prime Minister and the resistance forces, there are debates to eradicate the pre-investigation by the majority party and the restraint of party judgment for statutes submitted by the government to strengthen the leadership of the prime minister and as an argument it is interesting, but as long as Japan takes a parliamentary form of government, it becomes an issue of whether or not postwar Japanese political fundamentals will be changed or not. The origins of this debate can be found in the failure of the present political system to absorb the will of the people, and I myself would like to revitalize the arguments for prime minister leadership and the debates in the Diet, and I think that to do so we should partially abstain from majority party investigation and strict adherence to party lines, but there are some assumptions that must be met. First, in the cross voting, we should try to take Diet votes without adherence to party lines about ten times a year. Thereby, we should try to find a partial association within the Diet. Based on this experience, we should abolish majority party investigation and strict adherence to party lines for this debate to become a reality.
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Diet Lower House Member Koichi Kato
I believe that Japan is the most successful example of an efficient social democratic nation in modern times.
What the Koizumi administration is trying to do is make this a smaller government and approach a more liberal country. This is the thinking behind the Koizumi reforms. Specifically, it is the idea of letting work which can be done by the private sector to do so, and the reforms should shrink the large fiscal amounts given to special enterprises, etc. This is symbolized by the 30 trillion yen cap of issuance of government bonds.
When looking at the issues confronting Japan today, (the Koizumi reforms) are said by some to be lacking in speed or not strategic. However, the method of Koizumi’s reforms proposes in a unique manner an objective far from where they land, and even with the intra-party objections and resistance, the method taken will land at a goal far further than using regular methods. Therefore, it is obvious that it hasn’t reached that objective yet, but it is clear that it is moving us further. This method will change the Japanese axis as a whole as long as the people continue to support Koizumi's methods.
Looking individualistically, it is not as if there is no dissatisfaction, but the reforms of the medical system, etc. should have gone more forward. I am dissatisfied with the lack of progress in the management of the increase in senior citizen medical expenses. In some ways, the renewed consideration of medical expenses and their total payment and the different payment plans chronic and acute problems during the Hashimoto administration was more revolutionary. Concerning the reforms of the executive branch, they talk about the regulation of total personnel regulations. Looking overall, there are still some places which are lacking, but if we ignore these, Japan is moving forward towards change in fact.
Why is the reform of the LDP itself necessary?
Concerning progress of these reforms, it is said to be lead by the Prime Minister. To change the present Japanese situation, the leadership of the Prime Minister is necessary, and such debates are important, but I think there are still ways to consider in its progress.
The graphics of Prime Minister leadership and resistance forces which are taken up by the mass media may not be interesting, but in the case of medical expenses, we talked it out with former Prime Minister Hashimoto and if we had handled it as peers, the reforms might have progressed more. Of course, politics with conflict will slow down reform and this is irony. I have said before that the three urban leaders who have experienced the Minister of Health and Welfare, Messrs. Ryutaro Hashimoto, Kan Naoto and Junichiro Koizumi could get together and really cooperated, the reforms of medical expenses should have undergone more progress.
Mr. Koizumi became the head of the LDP saying that he wanted to break up the LDP. The person who became president of the LDP is saying that he wants to break up the LDP, so he presents contradictions, but I think that this is of its own significance. This is because it you ask whether or not the LDP should change, that is not the case. In this case, the theme that what form the LDP which should change is of interest.
I myself believe that the LDP is not a party with an ideology, but a system which should support the government. First of all, the LDP is said to be the party with a conservative ideology, but this is not based in fact. The LDP administration has changed Japanese society in the postwar decades.
The LDP was not a party which turned around to defend. It has even broken up Japanese values. Furthermore, it developed postwar Japanese economy.
The policies of the LDP were not a small Adam Smith government based on liberalism and the market mechanism. In other words, what the LDP did was build an extremely large government to which all parties depended. From the angle of making the people’s consciousness dependent on the state, this was not a liberalist, economic politics.
Under such a national regulated economy political system, the government made statutes based on the plans made up by the executive and bureaucratic institutions. The role played by the LDP which took power was for the legislative branch to pass such statutes uncorrected and speedily, and thereby the right to allocate the budget and use national resources by their own hand to gather votes and continue in power. The LDP maintained its legislative function within a national planned economy and the allocation function of the national resources.
Of course, the assumptions behind this is that what the executive branch was doing must match the context of history, the goals of the state and the consciousness of the people. With clear objectives absorbing the people such as the US Japan security system, economic growth and postwar recovery, the present system was created. When these goals and the clear consciousness were lost to the LDP, the majority of citizens started to disdain the LDP system. In other words, the origins of reforms of the LDP were from when the raisond’etre of the LDP were put into question.
What is necessary is for the reform of the people’s consciousness.
Recent voters have begun to think that the LDP should debate its vision of Japan's future, and that they do not want the budget to pass without correction without such debate. Furthermore, it is thankful that the budget is allotted to their regions, but even those who receive the allotments debate whether this type of Japanese democracy is beneficial and they vote for other parties.
Prime Minister Koizumi wants to change all this and thereby has received such strong support. If he were just another character, he should have gotten more votes in the previous LDP presidential elections. However, this was not the case. This time around, when the people thought that they really needed reforms, the character and resonance of a person who brought about expectations of reform became so popular.
However, on the other hand, because the people themselves support reforms, they will have to expect their consequences. They support reforms with pain and say that they would accept the decrease of national resources, taxes and other official funds which go to them, but if this becomes fact, won’t there be criticism from the people? Furthermore, even when the government implements policies for this recession, if it says not all the goods inventory from companies which are not popular cannot all be sold, there will be many people who will become discouraged.
In such an environment, the consciousness that the government doesn’t have some magic hand with which to relieve the recession under the consciousness of politicians who say “leave it all up to me” will not disappear.
Therefore, whether or not the Koizumi reforms will really lead to a reform of the consciousness of the people will become a great theme upon which to continue these reforms.
In such a manner, Mr. Koizumi must explain the present circumstances to the people and question the significance of the reforms. It is alright to be swept in through popularity, but in any event, the people must also be able to test their expectations. This point I believe is still insufficient.
I believe that the questions faced by Japan today must be considered in the context of a wider plane. The reasons are the huge supply of high quality and low priced labor which has appeared on the labor market of liberalist countries accompanying the breakdown of socialism, and within the world deflation and global deflation, I believe that Japan is squirming to find a response. By coincidence, the US covered the lack through its IT bubble and its Hedge Fund bubble for about 5 or 6 years, but recently, it is unable to bear the whole burden and the real questions have become clear. In Japan also, the IT factories and the fabric factories are moving to China, and I believe that when a metals factory from Kamata in Ohta-ku escape also, the real questions need to be raised.
If you believe that the basics of the questions are there, even if demand is increased through increases in the public works budget, the solutions to the questions are not easy. It appears then that the question of the limits of the government bond issues to 30 trillion yen or over that amount is not really significant.
System of Prime Minister's leadership and the abolition of majority party investigation and strict adherence to party lines
Japan must respond to this global era of change which is occurring just now, and it will become necessary for its decision making process to be more speedy.
The Koizumi administration is also trying to progress in the system of leadership by the Prime Minister. Within the graphics of the conflicts between the Prime Minister and resistance forces, there are now debates to abolish the systems of pre-investigations by the majority party and the strict adherence to the party line in the statute proposals of the government. These debates are interesting but they are rather large scale and I believe that it becomes an issue of whether to change one of the fundamentals of postwar Japanese politics.
The abolishment of majority party investigation will on the one hand give the Prime Minister the chance to speed up the timing of statute proposals necessary for reform, and it is a daring reform in the institution of the Diet. However, on the other hand, Diet review will become confused, and it is possible that questions from majority members will continue. The merit that the members of the majority attained in the allocation process of the budget will no longer be a merit, and it is obvious that they would revolt.
The debates which were held within the LDP would become debates in the whole of the Diet, and for the government, the passage of laws would become difficult; the proposals of the statutes will become faster, but the Diet sessions may become extremely slow. However, as a direction I think this debate will become extremely interesting. The conclusion is that the arguments in the Diet will become revitalized, and debates will be possible.
Those Diet members who can plea their messages to the people and their constituents will win seats in the Diet. In fact, there has already been experimentation with abolition of a priori majority investigation and strict adherence to party lines. First, when I was secretary general, it was a time of policy coordination between the LDP, the Socialist Party and the Sakigake party and we were debating the proposed statute for organ transplants. We believed that it was a question concerning life philosophy, the viewpoint towards death and religion, and we determined that it was not an issue of parties. Therefore, we did not have the parties investigate in advance and we did not force strict adherence according to party lines. This was not a statute proposal brought by the government, but by a Diet member, Individual voting brought on interesting results.
I along with then Vice Secretary General Nonaka voted for the proposal in Mr.Nakasone opposition to the proposal. In a LDP General Affairs meeting at that time, I was told that "We would like you to limit the voting format to this one issue". Returning to my election district, I was asked by an elderly gentleman from the town Why did you vote for the statute? And I could not respond. It would have been easiest to say that I voted along with the party line. However, if there is no thinking on your own, you cannot respond to such a question. In cases where there is no a priori investigation, it becomes extremely important for the member to have his own independent types of thinking to improve the qualities of the individual member.
The second experiment occurred in the first rounds of the so-called Finance Diet session starting from August of 1998. At this time, the situation was urgent and the Diet was scared that a Japanese initiated financial depression would spread around the world, and that it had to do something to prevent this. In the end, the LDP and the largest minority party the Democratic party cooperated to proceed to debate the statutes and the members within the party who were called new breed and the minority party members discussed the issues. Thereby, the proposal which the government submitted was changed in a great manner, and the new proposal was to be passed with the cooperation of the parties. In other words, although it was a statute proposed by the government, it was in reality determined during the Diet session.
In the future, the cases of such determination will increase if the laws are passed without a priori investigations. If so, it will be a Diet full of members who understand policy and it will be operated by the parties. It will be an extremely new ways of operation for the parties and the Diet, but because it will be different from the format whereby the intra-party determination of statutes were the main, the initial resistance from within the party was strong. This new method was reversed during the second round of the Finance Diet session. Here, the LDP, the Liberal Party and the Komeito Party could pass the government sponsored statutes with sheer numbers and they reverted to the methods used in the past. The resistance towards this I believe was one reason for the downgrading of the status of the LDP afterwards.
However, we must realize that the recent debates on Prime Minister leadership depends much on the feeling that since Mr. Koizumi's popularity is great, it should go its course. There is the assumption that the resistance forces of the LDP will try to obstruct all development in the world, but unless we let them try, the debate will be weak.
Of course, there will be voices raised against such debates. The breakdown of the past patterns is worrisome to those people who have made the base of their opinions upon the previous system, and even if the present majority party system does not itself present much policy debates, the positioning and the insurance of merits for the Diet members who are from the LDP depends on this framework.
Japan does not take a presidential system like the US but a parliamentary cabinet system. Therefore, the voters choose their desired representatives which in turn create a majority party which chooses its Prime Minister, and this Prime Minister implements good politics based on the opinions of the majority party. If the Prime Minister did not satisfy the people, which is the reverse of the present situation, what would the people think when that prime minister tried to proceed in his own way? It was the LDP Diet members who chose that Prime Minister, and there may be debate that states the framework within which the Prime Minister did not listen to their opinions was a mistake. In Japan, debates tend to get unbalanced, and we must debate based on whether or not we can handle such counter-arguments.
If even in this case the Prime Minister is to take leadership, we must make it so that the people choose the Prime Minister themselves. As long as Japan takes a parliamentary system, the Prime Minister acts as the conductor of an orchestra, and for the members of his party to make harmony, he must retain leadership. If we progress towards debate of the leadership of the Prime Minister, it is difficult to respond to issues such as a parliamentary system or a presidential system, and the relationship between the executive branch and the Diet members.
We must assume experiments such as the partial association in policies
Prime Minister Koizumi is searching for the formation of a Prime Minister leadership system in many ways. One of these is the progress of economic policy through the Economic and Fiscal Advisory Conferences, but in this case, the issue is whether or not the determination of policy is through the leadership and control of the Ministry of Finance or if the prime minister controls the Finance Ministry through the Advisory Conference which is a question within the executive branch. For Diet members of the LDP, the issue becomes whether or not the executive branch has gotten their permission whether or not it is determined by the ministry of Finance or by Minister Takenaka, and if the executive branch does not do so, it may not guarantee that the budget and statutes are passed in the Diet session in cooperation with the government.
In fact, before the Ikeda cabinet, this is how debates were carried out in the Diet. The government had a difficult time, but it was considered a format which was simplified since the LDP would be unified by the party itself. This led to the custom of a priori investigation by the majority party.
The question is that at present, this format cannot absorb the opinions of the people. Should we therefore return to the old ways or should be we continue to use the simplified format, and this is what makes the daily Koizumi administration an active one. I myself believe that partial abolition of the majority party investigation and the strict adherence to party lines is a good thing. It should become all the more interesting if the Diet votes through its individual members and not in control by the majority or other parties.
In the US also, about 30% of the votes are conducted under cross-voting whereby the adherence to party lines is abolished. In this way, the strength of the parties is probably stronger in Japan. In contrast, the simplified format which has taken root in Japan has delayed the revitalization of debate in the Diet.
At the same time, politicians should consider their own merits by positively expressing their viewpoints in the Diet. At present, the members are not accustomed to this type of debate, and the representatives who are serving their first or second term must shut up in response to opinions given by the older representatives who are serving their 7th term. In committees, the media will take up opinions which state that the roads should be built in the representatives' own election district, and these have more merits.
The representatives who have no courage or no way of expressing their opinions must stay quiet, but there are many younger representatives in the party who have a great deal of policy capability and methods of expression.
In Japan, there is already starting to be a situation where the qualities and capabilities of the politician himself are being scrutinized. In the US, there are NPOs which check upon the contents and the voting records of representatives of Congress, and in time, there will probably be the same ranking and points for representatives in Japan.
In Japan also, the politics of majority party rule by numbers and the total acceptance of what the government proposes will no longer stand. It is about time that in Japan also, we must realize that there should be cooperation according to policy or a partial association. This is not just limited to the majority party. The coalition parties should also realize that it can change policy not in total acceptance to what the majority LDP says and the minority policies should determine their opinions on a policy not just in opposition to what the majority party says. This change should change Japanese politics. However, resistance to the abolition of a priori majority party investigation and strict adherence to the party line will be great, and it is possible that the debates will return to their initial beginnings. First of all, we should try ten votes using cross voting.
Then, based on this experience, we should do away with majority party investigation and strict adherence to the party line to make this debate a reality.
The implementation of a Prime Minister lead system and the revitalization of the Diet will, I believe, bring efforts and experiments to a reality under Japan's parliamentary cabinet system.
投稿者 gnpo : 09:24 AM
[talk] How to Proceed with the Prime Minister led reforms
Yasuhisa Shiozaki: House of Representatives
Born 1950. B.A. from Tokyo University, Department of Liberal Arts. Master Degree from Graduate Program in Public Administration, Harvard University. Bank of Japan 1975- 1993. Elected to House of Representatives in 1993 from former Ehime Constituency, 1st District. Parliamentary Vice-Minister of Finance, Chairman of the Legal Committee of Liberal Democratic Party(LDP); Chairman of the Diplomacy Committee, LDP. Authored: "Found Japanese SEC" "Second Phase in Money Riot-Rebuild Assets Market" and more .
Yoshimasa hayashi: House of Councilors
Born 1961. B.A. from Tokyo University, Department of Law 1984. Mitsui Corporation since 1984. Graduated from Harvard University Graduate School 1994. Elected to House of Councilors in 1995. Participated in development of Mansfield Bill in U.S. in 1991. To present, Vice Chairman -LDP Upper House Policy Review Committee, etc.
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Two Diet members from Liberal Democratic Party talk about their view and appraisal on the progress of Reform Plans initiated by Prime Minister J.Koizumi. Both Yasuhisa Shiozaki, House of Representatives, and Yoshimasa Hayashi, House of Councilors, are the LDP mid-level officials, actively involved in policy and measures development. Genron-NPO asks their view on how persistent resistance inside LDP interferes with the Prime Ministers reform process; is the controversial "preliminary bill screening by ruling party" a real stumbling block to the reforms. And also asks how they see the effectiveness of Japanese lawmaking system, as actual participants in the process inside LDP.
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Yasuhisa Shiozaki:
Some measures could be highly rated as we can see the notable progress.( e.g. streamlining Special Public Corporations), while others are not. Doesn't fully agree with the Prime Minister's priority setting and particularly in economy reform plans.
The Council on Economic and Fiscal Policy plays an important role to provide the Prime Minister with power to drive the reform. We must legitimize a system in LDP of visionary and prudent but also quick decision-making, no matter who will be the Prime Minister. That system should demand high-level discussion among LDP Diet members to come up with Cabinet positions that are aligned with the Cabinet objectives of the Prime Minister. Once we have such a system in place, bill screening could be eliminated.
The Prime Minister could leave key reform bills up to each representative's discretionary voting with no LDP screening. Discretionary voting is definitely an option to be reserved by the Prime Minister when it comes to a point where he must have a political showdown. Under current constituency system, a party could have a representative whose belief is conflicting with the party policy. If those representatives choose to vote based on their personal beliefs, the party's control over the vote will be fragile. That may trigger to break the party frames. A debate on policies throughout parties and the Disparked so be sparkedso that policy alliance across parties will be visible.
Yoshimasa Hayashi:
Because a certain paradigm shift has been seen at the start of the reform, the expectation level has been raised to high. I was afraid that people might be disappointed about the gap between expectation and reality. But at least now, reforms are advancing with high public approval rate. We have to accomplish all reforms while the high support continues.
I never recommend that all the bill screening be eliminated. It’s a matter of counterbalancing (between the cabinet and lawmakers). What's unusual in Japan is that Japanese Diet members are forced to vote unanimously for the party direction, even though they won the election with their own effort and strategy. We could try to hundle some bills without party screening and unanimous voting direction. Our party pledge in the last election, which did not specify the reform contents and timeline, might be the cause of never ending disputes inside LDP.
Time is running out for the budget and taxation bills. If these are submitted to the Diet with no mediation made in LDP, we will risks drastic changes or confrontations being raised in the session. This could lead to the situation Mr.Shiozaki hinted. Right now though, we have no time to dissolve the lower house and repaint political maps.
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KUDO: (Genron NPO Chief Editor)
It's been about seven months since Prime Minister Koizumi’s Reform plan started. It seems to be making some progress in political timeline although many gave mixed appraisals as the declining economy continues. Would you tell us what is your interim rating to the Reform progress?
SHIOZAKI:
Nothing was specific until we saw proposals on reengineering Public Corporations . I however believe that Mr. Koizumi has successfully demonstrated his commitment to accelerate the reform process by announcing streamlining of seven corporations as phase one, followed by some others as well.
Since the LDP's (Liberal Democratic Party) President election, we at the LDP kept appealing the Koizumi Reform Plan to constituents and received a big approval in the election of the House of Councilors. In other words, we made a big promise for changes to the whole nation. Before this, the Ministry of Land, Infrastructure and Transport has never agreed to accept privatization of Public Corporations under their control. Also, third-party organizations are being created, directly reporting to the Prime Minister, not to the ministry. It's another unprecedented event, which could give more vital signs for change.
Now everybody knows that things have already started moving ahead. Public Corporations will be streamlined as described in the master plan, although some other plans, e.g. Medical Reform, might not effectively move ahead as originally planned. At any rate, Major reform actions could only be viable under the Koizumi Administration.
I am a bit concerned over the priorization of major policies implementation. The most critical is economic policies, symbolically, bad loan disposals. In my opinion, it is a too big issue to throw away all public finance options. Philosophically, it's ideal since we should bring our public finance back in good standing. I think things need to be done in the correct order. Today's top priority should be clearing bad loans to revitalize businesses and industries. I support the concept of replacing the public finance components, but the proposed sequence of financial measures does not appear practical. This could lead to a cumulative negative balance in the national balance sheet, accelerated deflation that could negatively impact the unemployment rate and because corporate bankruptcy as more bad loans get written off and reengineering of businesses and industries takes place.
Even though we have to take some measures toward medium to long-term public finance rebuilding, I see no reason to worsen our financial position right now. One short-term option is to reserve the right to cash government assets to counter deflation impact. In the meantime, I support his commitment to the 30 trillion yen cap of national bonds as a symbol of finance reform. This could go hand-in hand with my option.
HAYASHI:
These days I often think of the English word "Mandate", which means the will of constituents to the president-elect to follow when he starts his tenure. Ever since I ran the last election for the current term at the House of Councilors, I keep feeling that the "Mandate" from the last election must be "Commitment".
This means we proposed at the election: "We are committed to reform the nation, with your approval and consistent support all the way". They positively responded with their support and understanding to the reform that will bring a certain amount of pain involved. I assume that's why Mr.Koizumi keeps consistently high public approval rate under a devastating economy.
So, we must push hard to dispose bad loans, which have been shelved for long. At the same time,we must give confidence in the future. We were asked "Would the private sector only be the hardest hit when a series of rehabs are implemented ?" or "Will the finance reform include the medical reform bill, is implemented?" ," The downsizing plan on the government's side must be a head start for the series of reform initiatives.
While streamlining Public Corporations looks stand-alone, there are two other key elements in the reform package that should be addressed, reengineering of public employee organizations and Nonprofit Organizations. The progress of the three as a package seems successful as part of the Koizumi reform.
Since some changes have been seen, expectation of the reform went up to an extraordinarily high level. I was afraid that people might be disappointed about the gap between expectation and the reality. But Mr. Koizumi very passionately encouraged people by demonstrating his commitment even under many constraints.
Objectively, that expectation is still kept up high. We have to keep that level as high as possible so that we can implement all major actions without delay while the "Mandate" persists with passion.
Appraisal on Koizumi Economy Measures
KUDO:
Mr.Shiozaki, you have been advocating a full-blown preparation prior to lifting full protection of bank deposits. Are you satisfied with the current progress?
SHIOZAKI:
I am very worried about it. Some bank stock prices have gone down below \100 level. I have been warning this could happen since early 2001. Unless the government spearheads to work on immediate solutions to the bad loans issues and restructuring distressed companies, the market will seek its own catastrophic solution. That’s exactly the worst scenario foreign leaders had in mind for Japan since early 2001.
I kept emphasizing the needs for drastic disposal of non-performing loans before the April "cap" rule kicks in. It is still questionable whether a government-led disposal could be completed so that the rule would be effectively implemented by April. In reality, due to Mr.Koizumi's strong pressure on Finance Services Agency, a certain progress is seen in "big-boned policy (policy guidelines featuring a set of structural reform measures aimed at reviving the economy)" and "Reform Timeline" . But it is still unclear as to how far they could go. People are getting suspicious whether the government is serious on this issue as the April timeline is a factor.
KUDO:
Mr.Hyashi, I ask you on the same issue; there are always two conflicting issues involved at the same time. One is that there will be some pains we have to face as the reform moves ahead. The other is an already slow and still declining economy. Mr.Shiozaki showed his idea to sell government assets for cash to bolster national finance. Is there any consensus made inside LDP on this issue? It is unclear to me what is LDP’s goal on economy policies. For instance, they first talked about precautionary measures on deflation, then it has been changed to prevention of deflation spiral. Reforms should go on at full sails to increase the economy growth rate but on the other hand there are advocates of stimulus package inside LDP. Will these different views eventually be unified to one single policy or will such diversity expand?
HAYASHI:
The two issues are always conflicting, not only in LDP but also among economists. One faction believes that the stimulus package should be placed as top priority where aggressive measures for national finance and macro economy are to be introduced first. Structural reform could take place whenever the economy returns to an upward trend. Another faction believes that none of these stimulus measures would work to turn the economy around. I assume the former opinion is somewhat dominant in LDP.
In fact, the Koizumi Reforms are pretty similar to the previous Six Reform Plans led by Prime Minister Ryutaro Hashimoto who tried to reduce national debt, which was reaching a 400 trillion yen level. Though it did make some progress, due to some other reason the Hashimoto Administration lost the House of Councilors election, leading to the Obuchi Cabinet's take over. I strongly supported another candidate Mr.Seiroku Kajiyama to take power but to no avail. Electing Mr.Obuchi brought a big shift to the policy, resulting an inflated national debt of 666 trillion yen triggering the new reform deal.
Although conflicting opinions are always there, the Reform this time is characterized as top-down and making fair progress.
The key to the success of this reform depends on the level of trust of the Japanese nation who gave that “Mandate”. It appears to me that the Japanese people are committed to go through tough time for reform, as approval rate of Prime Minister Koizumi remains high under unprecedented devastation in jobless and growth rates.
LDP Confrontation to Prime Minister
KUDO:
Many LDP Diet members have led important policy proposals like Mr.Shiozaki. But under such crisis in Japan, the conflict in policy making between LDP and the prime minister drives me crazy. Why does this happen all the time?
HAYSASHI: I do not think that the system itself is malfunctioning. When a policy bill is to be presented top-down, some counterbalancing, or trade-offs, on a bottom-up basis is quite normal. To rephrase, the mandate given to the Prime Minister should be reviewed in due processes of democracy. Once a draft form of the policies is leaked out at an early stage, there will be a series of criticisms, if they were not implemesuccessfullysfuly. It's really not bad to allow room for modification of such drafts in the course of deep conferencing before making decision.
KUDO:
Is there any function in LDP to propose policies?
HAYASHI:
The first place is League of Diet Members where everyone can brainstorm. Most recently, members interested in the Inflation Target got together for debates. When members feel they should move forward, a Subcommittee is formed in the Policy Research Committee of LDP with increased legitimacy. The Inflation Target case though did not go further to propose a bill.
This process is transparent inside the party and an attempt to make it visible to outside the LDP is important. Anyhow, LDP where senior party leaders do not curb newer member's proposals.
KUDO:
As the Koizumi Reform moves ahead, more resistance seems to rise inside the LDP. Would it be better to change the LDP system to allow the Prime Minister to implement his policies without party interference? Someone is even recommending screening by government party be eliminated.
SHIOZAKI:
Currently many LDP members are frustrated because the Council on Economic and Fiscal Policy is dominating many decisions alone. Those frustrated call themselves constructive advisors, but reality they are just resist...., it makes no difference to me. At any rate, the current decision-making is fairly under control by the Prime Minister's office.
We should legitimize a system where we, as a nation, can stand visionary and at the same time respond to global key issues quickly and precisely no matter who is Prime Minister. We shouldn't rely on circumstances of the very visionary and highly popular Mr.Koizumi's presence. Now is the only chance to make functional changes to the nation's governance system and preserve them formally.
We must realize that we live in a new world where we are required to redefine our national interest and goals. From Japan's post WWII recovery till mid 70's, it was simple and obvious to everybody that our national interest and goals are economic growth and improvement in the standard of living. But only because defense and security issues were totally pushed aside, we were able to keep them simple and clear-cut.
Thereafter, the world started to change, going through the Oil Crisis and/or Nixon Shock and the world economy started to mature. After the Cold War, market economies started to explode in former communist countries, leading to a globally borderless economy. Looking back Japan's key policies did not change over that period.
When we were involved in the Financial Reconstruction Total Plan a few years ago, many of the accomplishments would never have been done in the traditional bottom up scheme. The LDP Secretary General, Koichi Kato and Prime Minister Hashimoto who were overseeing the whole process from the summit. In Government administration, we must have individuals who are able to define country goals, how it stands and acts. They are the only people who deserve Prime Minister candidacy and once elected with national endorsement to the vision, the administration should stick to that vision to implement policies.
Nobody paid attention to visions of former Japanese Prime Ministers. No matter who he was, all policies and measure had been implemented systematically based on what was mainly internally agreed upon by LDP. Such a mechanism would not be accepted by the Japanese people's buy-in any longer.
In a system, of which all projects are led under the Prime Minister's initiative, there should be a validation system, to check the conduct of the administration whoever the Prime Minister is. Diet members should represent constituents voices in a representative democracy. If their thoughts and visions are not respected and reflected in the Cabinet's policy administration, the Prime Minister will end up being an autocrat. What's needed now is to develop a speedy but prudent decision-making mechanism for future policies of Japan.
Controversy on screening by ruling party and to be bound by a pardecisionion
KUDO:
Mr.Hyashi, do you think it's necessary to eliminate bill screening by ruling parties for effective Cabinet administration?
HAYASHI:
I never recommend that all the screening be eliminated. It’s a matter of counterbalancing (between the cabinet and lawmakers). In other nations' politics, ruling parties' approval rates are normally poor. I guess that means they develop good policies. However in Japan, Diet members are forced to vote unanimously for the party position, even though they won the election for their own efforts and strategies. I have never seen a system like this outside Japan.
KUDO:
Are party constraints very tight in Japan?
HAYASHI:
Yes. We run elections as individuals but once elected, we are forced to vote unanimously. We are too kind compared to other countries' representatives. Bill screening and unanimous vote are one unit. However, for the Body Organ Transplant bill we agreed on a free voting basis, with minimum parameters approved by the Administrative Committee of LDP. From now on, many moves may be seen. For instance, "in case of legislation by House members, it's a discretionary voting" is definitely an option.
I suggest that discussions in the bill screening be disclosed to make the process more accountable.
The opposition should also do the same. If unanimous voting is only revoked for the LDP and not for the opposition party,it will not be fair game. In the Upper House, the government side is a minority. If we discuss there with the opposition on free voting, it could be a mess.
After all, the key to the success of the reform is in making the process more transparent under any options.
KUDO:
In Japan's rapid growth period, there has been a system inside the government where everything is managed under consensus and compromise. This became an obstacle for bringing power to the Prime Minister. Why voters support these representatives is one issue but with the given situation, how do you deal with the confrontational factions in designing new system that gives more power and control to the Prime Minister?
SHIOZAKI:
Representative democracy is to elect representatives of all the people of Japan by geography, etc. to the Diet for discussion,as all of 130 million Japanese nationals cannot get together at the Diet.Because the ultimate authority in the national rights lies with the Diet and, not the administration, everything must be finalized through Diet voting. For that reason in late 50's a custom was developed that the Cabinet is not to send any bills to the Diet unless they are approved by LDP.
In U.K., only a few ministers participate budget allocation. When an agreement is reached the money is given to the respective sectors fimmediateate use. The system functions because all understand the direction of discussion in the ruling party. Also members of Parliament from the ruling party play important roles in the Cabinet. If we over emphasize the power of the Prime Minister and to let him drive everything as top down without that mechanism, things will get awkward.
I am not sure if it is a good idea to eliminate all bill screenings right away, as Mr. Hahashi said. In the long run, we should go that direction provided that Diet representatives have quality discussions on all key issues to come up with recommendations which are also aligned with what the Prime Minister is trying to accomplish. The Cabinet should present those ideas as Policy proposals. These bills could be overturned at the Diet. The Prime Minister should listen to Diet members representing constituents' voices to make a prudent decision as a leader. But this is totally different from being disturbed by a handful of people who are dominating the party's policy-making process.
KUDO:
Are you recommending, if situation allows, that bills could be voted freely, without party screening?
SHIOZAKI:
Free voting is definitely an option to be reserved by the Prime Minister when it comes to a point where he must have a showdown about his confidence. For instance, he could leave the special public corporations bill up to each representative's decision with no LDP screening.
Conflict inside LDP
KUDO:
What most bothers me is that Mr.Koizumi proposes many reform plans with strong support from voters; nevertheless the LDP members who are dominating party's conventional mediation system challenge his plans. Are they trying to show a live performance of internal debate, or does this simply mean the old mechanism is dying and needs fundamental reengineering?
HAYASHI:
In principle,during the past election,the LDP lacked specifics in our pledge leading to these controversies. We presented no specifics about what we are going to do when we take the government. So what has been delegated by voters is also vague. In the Diet , each of us is not supposed to vote for unless personally.
Each representative cannot precisely judge if he or she should blindly support what the Prime Minister proposes.
In the case of the Japan Highway Public Corporation at the election, has LDP proposed that it remains public for next the 50 years with no government subsidy? No, we haven't. So, that bill may be voted by each LDP representative's discretion as suggested by Mr. SHIOZAKI, even though there is the risk that the bill will not pass since the opposition would take advantage of our controversy. We could live with that risk.
I am not fully convinced of the current obligation to obey the party's decision to such a bill that It was not clearly pledged at the election and has been mediated in the party without my consultation. We need to have criteria for circumstances under which the party can force unanimous voting. Some could be left for free voting like the Organ Transplant; while others could be open for discussion when brought in, then when it gets closer to a consensus, the party could recommend unanimous voting. Both are seen in the U.K. Bills could be handled in many ways by timeline and contents, e.g. 100% free voting; Party directed voting at the end of Committee session where the ruling side also makes amendments to bills submitted by the Cabinet; or unanimous voting only at the plenary session.
However, we need full understanding and cooperation on these methodologies from the opposition. Otherwise we lose ammunition, and they don’t. As I'd like to see more good cases like the Organ Transplant Bill, we need rules for disclosing the content review process.
SHIOZAKI:
In countries like the U.K. and Australia, and probably the U.S. has the same tendency, the two-party system defines each party's characteristic very clearly. Their policies sometimes overlap, particularly in the U.S., but as in the U.K./Australian Conservatives-Labor system, party–controlled voting makes a lot of sense.
Here in Japan, LDP, which is legally a political party with vision, includes an extremely broad base of people whose profiles are not communists, not socialists or with no religious background and so forth a big melting pot of residuals. The Democratic Party of Japan is a bit smaller size melting pot in the same nature. Many candidates run as Democrats because LDP did not give them candidacy in their constituencies.
Parties' vote forcing under such circumstances could distress many representatives. Across many parties, we will soon know whose opinions are similar and whose are different as time goes by. Then regrouping of representatives across party frames wilbebw an issue. Normally this would never happen voluntarily. Even though the constituency constraints could be an obstacle, it is still ridiculous if a representative must vote against a bill he wishes to support only because it came from the opposite side. Now we are at least seeking a structural solution to such an ineffective political system. Otherwise this dilemma will go on endlessly. The recent Anti-Terror Bill session started with for-and-against disputes among parties even though the bill was not yet drafted. We need new governance now. At the same time, political parties should be geared toward change.
KUDO:
Do you have in mind a kind of ad hoc affiliations beyond party frames, to seek a base of political regrouping?
SHIOZAKI:
Let's say Mr.Koizumi could give all representatives a 100% autonomy from the LDP central management in voting for the Public Corporation Reform bill. If we move ahead, the Democrats will be forced to behave prudently.
KUDO:
What if he had quite a few against vote from LDP?
SHIOZAKI:
He must have a showdown about who is right, i.e. whole cabinet to resign or dissolve the Lower House.
KUDO:
It's very easy to understand for the general public. Can he do it now?
SHIOZAKI:
If the majority of LDP ballot was against his bill, he won't survive. The same holds true if the bill did not pass. But if the bill did pass but LDP majority recommended against, it could be a good chance to move the politics into new phases.
Koizumi to risk his political life
KUDO:
Mr.Hayashi, LDP is a huge party with diverse base and opinions. But it is very funny to see that intra-party resistance is still visible although his reform has already advanced halfway. Even though he is honestly struggling to improve the party, tension against him seems critical. What is the best way for him to move along?
HAYASHI:
For budget and taxation the clock is ticking. Budget is literally figures and numbers. While most of other bills are discussed subjectively, i.e. talking about roughly midpoint, or 30% agreeable, etc. the Budget bill is presented in numbers. This could expose composition of Koizumi Cabinet's policy components to objective views. It comes to how the Diet reviews the Budget bill submitted by the Cabinet. In the past, the Budget bill has been handled in a sort of "Fast Track" approach, i.e. take it or leave it within a short timeframe. We had only one exception, requested by Secretary General K.Kato for one revision in the rider of the budget bill.
The Prime Minister in the face of LDP and ruling parties' resistance can push this coming budget bill hard. Theoretically at the Diet session, the ruling parties could dispute the bill. When they deny or insist on drastic amendments to it, Mr. SHIOZAKI's scenario could realize. It sounds exciting but I am afraid that now is not the right time to dissolve the Lower House, followed by nationwide election to scrap and build major parties, as far as time and expense are concerned.
We could wait and see how the Budget bill will go through the Diet rather than insisting on election and political re-affiliation now. If the bill is handled so far smoothly, we might be able to see it as a vital sign for more people to join the reform.
SHIOZAKI:
I am not favoring the dissolution right now either. The resistance sector would not even be able to officially confront the Prime Minister who keeps such a high public approval rating. So,for now they claim to be constructive advisors, and not resistance. As such, Mr.Koizumi is now given a chance to lead the whole process as he wants, although personally. I have some concerns on his national finance measures. We should keep disputing on policies to identify issues in the future.We may encounter a circumstance where the Prime Minister need a political showdown.
The Council on Economic and Fiscal Policy is scheduled to submit Tax Reform proposals in 2002. This must have a big impact to the intra-party resistance as this issue is the closest and biggest to people's lifes.
KUDO:
How do they work with LDP Researchcommissionn on Tax System?
SHIOZAKI:
We never recommended the LDP Committee be dissolved. We say that if the Council on Economic and Fiscal Policy is officially asked to fundamentally review current taxation system, they will do it. No matter what discomfort the party Committee members may have, it's their mission and no laws can prevent them from doing it.
KUDO:: Mr.Hayashi, when the Cabinet brings in a bill, which the resistance faction would never accept, don’t you see any challenges in handling disputes and the steps in the Diet?
HAYASHI:
Certainly we foresee some challenges as the current system requires intra-party bill screening to make consensus in order to dictate unanimous voting to all representatives. Even if internal mediation does not reach a consensus, the party will have to force the vote. Then, people who did not agree will face a big dilemma. They may think about some options like to abstain, voting against and so forth. If they do, the real resistance will ten be known.
KUDO:
Is there any chance for open voting to the Budget bill?
HAYASHI:
Probably not.
KUDO:
Then, certain underwater struggle will be expected.
HAYASHI:
Yes, drafting of the Budget bill.
KUDO:
How does the Council on Economic and Fiscal Policy get involved in the process ?
HAYASHI:
Let's take the taxation reform as an example. There are three entities that are working on the same issue, Council on Economic and Fiscal Policy, Tax Commission and LDP Tax Commission on Tax System . Prime Minister Koizumi recommends that they each work on their own recommendation. The Prime Minister is the head of the Cabinet and the president of LDP. As long as the party's Taxation Committee is a part of LDP Policy Research Council, the LDP president could officially control who should be nominated ascommitteee members. As such, the party and the cabinet may be perceived as one single body but officially, the two reporting lines merges at the Prime Minister. Theoretically we might be able to interpret these organizational charts to find ways to get over the conflicting interests
Economy Reforms Stalled?
KUDO:
The recent U.S. source represents some disappointments to the slower-than-expected reform progress in Japan although it still highly values Mr.Koizumi's reform efforts. Due to lack of a powerful opposition in Japan, America and other countries often assume the auditor's role. They are anxious to see more speedy and thorough reforms to progress. Do you think their concerns are legitimate?
SHIOZAKI:
Absolutely. When we were standing at the crossroads on economy measures three years ago, the government decided to put the stimulus package as the top priority and hold off bad loan disposal and structural reforms. All has been decided in an almost closed chamber. Koizumi was appointed with his pledge to counter those strategies and promised to put top priority to reforms of finance, economy and industries, symbolically, bad loan disposals. Since Japan still fails to show significant results of these reforms, they wonder what's going on. First of all, they like to see recovery of economy, but the first move delivered to them was the streamlining of special public corporations, which they see having no immediate relationship to the economy recovery.
After all, the only one and most important thing they were looking forward to was a major changes in the economy, which has been left stagnant with no fundamental solutions over the last 10 years. So we have no options other than to speed up bad loan disposals. Although it could have been resolved much earlier, it's been shelved for long. We have everything in our toolbox to fix it immediately. They always wonder why Japan doesn’t do it now, and are getting impatient. So, unless we make a quick advance on the bad loan disposals, they will never value our reform efforts.
HAYASHI:
I again emphasize that it comes to a matter of people's commitment to the reform process. There are always two mainstreams in the philosophy of economy measures. Whenever people are getting frustrated to go on the long and painful reform trails, the easy-going thoughts rear their ugly head. I really hate to see the worst scenario where people look back the halfway-abandoned reforms and think what if Mr. Koizumi had been given another chance to move the reforms ahead.
KUDO:
Thank you very much for joining us today.
投稿者 gnpo : 08:58 AM
[talk] The Role of Bureaucrats in the Politician Led System
Participants:
Ministry of Finance (MOF), Division Director
Ministry of Economic Trade and Industry (METI), Vice-Minister for bureau
Ministry of Foreign Affairs (MOFA), Division Director
Moderator:
Kudo Yasushi, Genron NPO
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Kasumigaseki bureaucrats had played such an important role as the "brains" of Japan in the past. As reforms contain pain, the bureaucrats are facing a big change, including the relation to politics, and loss of direction in the turmoil. Career bureaucrats from various ministries gathered and gave frank discussion on what challenges Japan and/or bureaucrats are facing, particularly prime minister-initiated political reform, bill screening by the ruling party, and scandals.
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MOF: The role of Kasumigaseki had played a roll to resolve conflict of interest in the past where no leadership is responsible for the crisis. When the overall Japanese economy came to the point where it no longer functioned properly, the remedies that involved a pain to the nations could no longer be solely discussed in Kasumigaseki or politics. This is where we have come to the phase of trial and error.
The relationship between the Prime Minister and the ruling party is an issue of policy-making process, rather than dual power structure. The policy-making system in both the ruling parties and the rest of the parties is weak compared to other nations. Japanese democracy is based on what everybody-agrees where the leader is not the winner of policy discussions but is assigned by the seniority system. Therefore, even if we abolish the bill screening by the ruling party, I don't know if it really works in Japan. If conflict of interest adjustment/coordination is required to be resolved for a bill to pass, it is just a matter of who is going to do it whether the party or the Diet. In other words, it is basically a political matter.
The MOF situation is still in turmoil, trying to recover confidence from a series of scandals, and adjust to the change in environment. We need enhancement of morale and environment where bureaucrats can think of national interests. If Kasumigaseki becomes the worst place to work, nobody (especially younger people) will go to work there.
MOFA: How we understand the Prime Minister-led initiative is that we follow what the state ministers assigned by the Cabinet where the prime minister is democratically elected in the Diet does. A private study group in the ruling party does not have legal status at all. The current situation is called dual power structure. The focus of power should rest with the Prime Minister's office. It is easier for us to do the work if the Prime Minister's office hosts the center of administrative branch. We are wasting our time if we don't take action quickly and decide with clear responsibility under the current situation. I think bureaucrats should provide several non-subjective policy options for politicians so that they are required to decide with clear responsibility.
In the case of MOFA, I accept criticisms because there are some people who committed crimes. However, I think it is unfortunate that people think that all MOFA employees are against reform, and are stubbornly protecting their own interests in the fight against Foreign Minister Tanaka. The world is moving, and it won't wait for us. I sincerely hope that the Foreign Minister focuses 100% on her job as Foreign Minister.
METI: The bureaucrats can not force people to accept a pain by themselves. The constituency will not be satisfied if political responsibility is not taken. I think it has come to the point where politicians have to make the decisions. However, since the policy-evaluating method is not yet established, political debate is still heavily focused on resolving conflict of interest. For example, evaluation of public works has just started, and priorities cannot be discussed without having an objective mechanism. Hence, we can not say that this is a matter of policy-making.
Some of us, the bureaucrats, want to leave the ministries and try working for private institutions. However, we also have desire to return and work in the policy-making field. In that sense, we the bureaucrats and the bureaucracy could not survive if we don’t make a mechanism that allows the bureaucracy to enhance expertise.
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Participants:
Ministry of Finance (MOF), Division Director
Ministry of Economic Trade and Industry (METI), Bureau Vice-Minister
Ministry of Foreign Affairs (MOFA:), Division Director
Moderator: Kudo Yasushi, Genron NPO
Kudo: There are many members requesting discussions about the bureaucracy and the bureaucrats, since continuous criticism towards bureaucrats exists, claiming they are only seeking their interests or benefits of ministries/agencies they represent. Some of us question whether bureaucrats who have been committed to resolve political conflict of interest function well under the Koizumi-led reform framework. To begin our discussion, what do you think about the current criticism of bureaucrats?
[Criticism towards bureaucrats]
MOFA: In the case of MOFA:, I understand the criticism the Ministry has received,since there are some people from the 5,000 employed by the MOFA who have committed felonies. However, it is very unfortunate that the media reports as if all 5,000 employees had committed felonies. I understand restructuring the MOFA is important and has to be done with a considerable effort; however, our primary job (diplomacy) will not go away . During 2000 to 2001, Japan had a very difficult time with Korea and China. Also, the world is changing quickly after September 11th. Therefore, we have to respond to those changes. The reality is that the media only focuses on things like the fight between the MOFA bureaucrats versus Minister Tanaka reluctance to restructure by MOFA bureaucrats. I sincerely hope the media will give objective observations.
I don't mind having many criticisms, but they should be based on facts. If everything we bureaucrats do is bad, then it really affects our morale, and ultimately our diplomacy.
Kudo: Is Minister Tanaka the problem?
MOFA: To be honest, I would recommend the Minister of Foreign Affairs to study about diplomacy and focus 100% on it. It's no more than that and no less than that.
Kudo: If we look at the current economy and the fiscal situation, the MOF should have more sense of "crisis" and should appeal to the public. After a series of scandals, it seems that the MOF has remained quiet.How is the MOF like now?
MOF: We're doing usual things like the annual budgeting, but I feel that it is a time of soul-searching. Not only because of scandals but after the bubble burst, the situation of the MOF has changed a lot. Although there were many criticisms, the bureaucracy as a system was working well until the bubble burst. With high-quality bureaucrats in Japan, the system worked well under the Kasumigaseki (=bureaucrats) leadership. However, after the bubble burst, there was criticism towards arrogant bureaucrats who could not revive the economy.
We the bureaucrats don't have complete visions of how to revive the economy. Therefore, we're experiencing trial and errors along with soul-searching. Up to the burst of the bubble, the MOF was the top ministry and had a overall vision for the nation. After the bubble the MOF was [forced to be] separated into a smaller MOF and FSA, and had its name change from Okura to Zaimu. The Council of Economic & Fiscal Policy (CEFP) is now in charge of budgeting. In addition, the Prime Minister's power is strengthened with regard to budgeting,which we are, told to follow. This all just started in 2001, and we are still thinking about what is the best way for us to be a part of this process.
Budgeting is a process of resolving conflicts among various interests. It does not mean that the MOF has the leadership in budget policies. What we need is to slowly rebuild trust of others step by step. There were some MOF bureaucrats who did wrong things during the bubble era, and therefore, we have been trying to recover wounded trust. Of course, it does not mean that we won't talk to interest groups, but we are gradually returning to "normal" relations. I see the current situation as a transition era.
Kudo: Industrial policy is also important under the current economic situation. Japan had industrial policies during the financial panic in 1929 and the U.S. had a strategy to revive the economy in the 1980s. I don't see a clear role for the METI. Today, Japan has less competitive advantage due to the economic structural shift. Do we need industrial policies or should we rely on the market mechanism?
METI: When we joined ministries, the Japanese economy was growing rapidly and various systems were functioning well. The life-long employment system provided a sense of loyalty and accumulated know-how within companies. The main bank system provided governance, low-cost information, and mechanisms for mutual help. This was a market supplement system that perfectly fit into the catch-up system until the early 1990s. 10% of Japanese industry had competitive advantage in the global economy. The system re-distributed the profit earned by 10% of industry to benefit the whole economy. That system functioned.
However, in the 1990s, Japan caught up with the West, and the catch-up system became outdated. Issues of aging, pension, and health care emerged and the nation could not go forward if it continued to have an outdated system.
At that time, an extreme debate of let market mechanism decide emerged. There are winners and losers in the same industry, and life-long employment has shifted to capability-based contracts where labor mobility is achieved. Under such a situation, no industry-oriented policy but mechanism as a whole, i.e., employment, pension, and fiscal systems, need to be considered. It was the Hashimoto administration that started the economic structural reform on high-cost structure, employment, and the commercial code. Now it seems the reform is in progress.
On the other hand, due to China's rising competitiveness and rising domestic unemployment, questions have been raised as to whether or not we can really manage the Japanese economy in the future where we rely on the market mechanism of free competition. There is an emerging debate as to whether the government should support Japanese industries in order to compete in the global market. Discussion on intellectual property rights, R&D strategies, and public works that would improve productivity and industrial competitiveness are getting a lot more attention.
[Do bureaucrats have policy-making abilities?]
Kudo: What I want to know is the policy-making abilities of the bureaucrats. Can the current bureaucrats think of scenarios to solve the current economic and fiscal problems? If not, why not? There are some views that the bureaucracy does not function under the current situation.
METI: To be honest, I have an answer. The world is moving faster and faster.Because of this politically-led initiative, we have to prepare policy plans within a month, and modify them within a short time. I wonder if we can really think about long-term strategy. We're always tackling plans as needed every day. This is the problem we are facing.Recently, bureaucrats could not have dinner with corporate executives because of scandal-measures. As a result, we cannot gather valuable industry information. We are expected to use information on the internet; however, we're in a transition period and we have a concrete idea of how we can develop long-term policy effectively using information technology. Since the economic situation is severe, we're expected to tackle Non-performing loan (NPL) problems that are well-exposed. As a result, the real job of constructing a financial system that takes middle-risk-return is delayed.
Kudo: The MOF used to be so powerful and even controlled politicians from behind the scenes. Rather than controlling politicians, the important job is to increase GDP growth and stabilize the market environment. In other words, a combination of economic policies can solve fiscal problems. CEFP will conduct such policy-making. What kind of role will the MOF play?
MOF: Rather than weakening of MOF, the situation has changed. Now banks have to swallow bitter medicines. During the high growth era, there were some bitter medicines, but there were also sweet juices to go with and banks became healthy again. In Kasumigaseki, we had that know-how of let the banks take bitter medicine with sweet juice.
However, we never experienced such a consensus-building situation where only bitter medicine exists. Under such a situation, political leadership is required. Up to now, what Kasumigaseki played was resolving conflict of interest where no real crisis was present and no leadership was required. Fortunately, the model of the catch up system already had been placed. That model was full of know-how and because of that, Japan was able to grow to the present level. However, we did not inherit any know-how from our predecessors on how to swallow bitter medicine when the whole economy is in bad shape. This, we cannot decide on our own, and politicians cannot decide on their own. We’re rather lost as to what to do. As I said before, we at least have started doing trial & error and policy evaluations.
MOFA: Diplomacy was consistently conducted by political initiative since the end of WWII. For example, the most important decisions were taken by: 1) Prime Minister Shigeru Yoshida for the San Francisco Peace Treaty and the U.S.-Japan Security Treaty; 2) Prime Minister Nobusuke Kishi for revision of the Security Treaty; 3) Prime Minister Ichiro Hatoyama for rapprochement with the Soviet Union; and 4) Prime Minister Kakuei Tanaka for normalization with China. A combination of political leadership and support from the bureaucrats enabled this to happen. This is the nature of diplomacy, we bureaucrats cannot deal with the Secretary of State or the President of the United States even if we wish to. Therefore, we hand it over to the political level to make decisions. Even if a bureaucrat has exceptional skills and abilities, his/her face is invisible. We need an appropriate position in order to be recognized.This is a disadvantage for the Ministry of Foreign Affairs, as compared to other ministries/agencies where an able person can stick out.
In the area of diplomacy, Japanese politicians have to convey their own messages to their counterp