For five years Japan has defied the skeptics, mounting an eye-popping economic comeback under reforms ushered in by Prime Minister Junichiro...
TOKYO — For five years Japan has defied the skeptics, mounting an eye-popping economic comeback under reforms ushered in by Prime Minister Junichiro Koizumi after more than a decade of doldrums.
But what comes next is a big question mark as the nation prepares to pick a new prime minister. Whoever next pilots the world’s second-largest economy faces the tough task of keeping it clipping along and not sliding back.
The ruling Liberal Democratic Party (LDP) chooses a new party president today, and the winner is virtually guaranteed to be elected prime minister when the parliament convenes on Tuesday.
The new premier will face a host of economic challenges: taxation problems, a growing gap between rich and poor, massive government debt, a shrinking population, frayed relations with Asian trading partners and a lingering oversensitivity to U.S. downturns.
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With Japan finally emerging as an engine for global growth, any economic misfires could have far-reaching fallout.
Koizumi has been one of Japan’s most popular and longest-serving prime ministers for good reason.
Under his watch, unemployment has dropped, the stock market has rocketed, the government has been streamlined and bad debt has been mopped up at the nation’s banks. The public corporations running the nation’s highways have been privatized, and he passed a plan to do the same to the post office. Corporate profits have climbed and Japan’s economy has now expanded for six straight quarters.
Hoping to fill Koizumi’s shoes in the LDP presidential vote are Chief Cabinet Secretary Shinzo Abe, Finance Minister Sadakazu Tanigaki and Foreign Minister Taro Aso. Aso is the longshot and Tanigaki the man with economic credentials, but Abe is the front-runner.