Japan's PM race goes down to the wire

Junichiro Koizumi has been described as a 'quixotic reformer' and 'an eccentric'

In this story: Indications A reformer Not giving up RELATED SITES

By staff and wire reports

TOKYO, Japan -- Japanese people who watched with bemused detachment the recent U.S. presidential race between George W. Bush and Al Gore are now faced with a similarly tight contest between two equally divergent contenders for the leadership of their nation.

The contest for control of Japan's ruling Liberal Democratic Party, and therefore the world's second largest economic power, has effectively come down to two players -- former health minister Junichiro Koizumi and former prime minister Ryutaro Hashimoto.

In Depth Race for Japan's leadership

Considered the underdog of the tussle and the younger of the two, Koizumi surprised many -- including himself -- by sweeping 11 primaries held over the weekend, completing a dramatic turnaround that will see the battle go down to the wire.

"I think Koizumi is a genuine contender, although I worry about the factional support," says Sydney-based Macquarie Bank chief economist Richard Gibbs.

"He seems to be playing fairly well into the electorate, and appears to have a greater level of popular support than Hashimoto."

Said Koizumi of his lead in the early internal vote: "The lava has erupted".

Although the final result hinges on a vote Tuesday of all chapters of the LDP and its members of parliament, Koizumi's surge has some already talking of the make-up of his cabinet.

As of Sunday night, Koizumi had won primaries in 20 of the 47 prefectures, gathering 59 votes against seven for Hashimoto.

Indications

The primaries determined how the LDP's 47 prefectural chapters would cast their 141 votes on Tuesday. The LDP's parliamentarians will cast another 346 votes, and the winner needs a majority to take power.

At 59 years of age, and sporting a trendy perm, Koizumi is almost the opposite of the aging Hashimoto, who is a masterful backroom player as famous for his Elvis-inspired coiffure as his disastrous decision to lift tighten fiscal policy when leading the LDP in 1998, which sent Japan into an economic tailspin.

Described variously as a quixotic reformer, an eccentric and "the Mick Jagger of Japanese politics," Koizumi has attracted the support of many young Japanese urbanites.

Koizumi (R) shares the stage with his closest rival, Hashimoto (L)

His platform is "Change the LDP, Change Japan", which aims to take a broom to the dusty and wrinkled image of the ruling party, which still requires a coalition to maintain power.

He backs structural reforms as the key to improving Japan's economy, hopes to promote growth through deregulation and plans eventually to privatize the postal system

Hashimoto, who leads the LDP's largest faction, promises to compile plans with which to revitalize Japan's struggling economy in 100 days, and follow up his efforts with legislative change. He favors injecting capital to prop up banks, and setting targets for them to get rid of bad loans.

A reformer

"Koizumi is being seen as more of a reformist, which plays well with the urban voting blocs," says Gibbs. "But regional factional support seems to be with Hashimoto, and also there's an issue with him on the fiscal reform and debt-restructuring front."

"It's unclear whether he would be as committed (as Hashimoto) and as forceful on fiscal consolidation. Hashimoto has a past record to go on. So for Koizumi, there's a question mark there as well."

LDP observers are quick to remind us that the race is an internal one, and Hashimoto -- the backroom power broker -- continues to carry the numbers in the party and down through the regional membership.

But the more popular Koizumi might be seen as a better image for the LDP to take into oncoming Upper House elections in July, and Lower House elections toward the end of the year.

"To some extent he (Koizumi) does play very well in the emerging power bases, the urban areas, and so certainly the political support base may be larger than Hashimoto's," said one economist in Tokyo, who wished not to be named.

Observers say many voters appear to be getting tired of the endless stream of political scandals, and a parade of 11 prime ministers since 1989.

According to the Asahi newspaper Koizumi's lead has prompted an LDP power broker, Hiromu Nonaka, to proclaim him the de facto winner, and hinted that Hashimoto should withdraw from the race.

Not giving up

But Hashimoto said early Sunday that he wasn't ready to give up just yet.

"My competitor has the higher score, but I'm going to fight on," the former prime minister told the public broadcaster NHK.

Meanwhile, Tokyo stocks opened higher on Monday on hopes that reformist Koizumi could win the contest. Traders said Koizumi's appeal outweighed the impact of a weaker Wall Street.

"Being seen as reform-minded, Koizumi is drawing support among market players. But we don't know much about his concrete economic policy. This will keep the market from staging a runaway rally," said Hiroichi Nishi, a general manager at Nikko Securities.

Reuters contributed to this report.

Liberal Democratic Party of Japan
Japanese Prime Minister

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