Japan’s new prime minister – the sixth in five years – faces an uphill task trying to unite his divided ruling party, deal with a soaring yen, and lead the country’s recovery from the devastating tsunami and nuclear crisis. Has Yoshihiko Noda got what it takes? asks GIS expert Professor Dr Stefan Lippert in this briefing.

SADDLING the next generations with debt is tantamount to fraud, Yoshihiko Noda, said recently when Japan’s finance minister. He was echoing the views of the third president of the United States, Thomas Jefferson.

Mr Noda may seem colourless on the surface, but a fighting spirit lies beneath the sober ministerial suit. He is an experienced Judo black belt

Mr Noda believes Japan has committed such ‘fraud’ – and on a national scale.

Now the 54-year-old can tackle the problem directly as Japan’s prime minister.

Mr Noda may seem colourless on the surface, but a fighting spirit lies beneath the sober ministerial suit. He is an experienced Judo black belt.

After studying political science at Waseda University, one of the most prestigious private universities in Japan and Asia, he was put through his paces at the Matsushita Institute of Government and Management. The institute was set up by the founder of the Panasonic Group, Konosuke Matsushita.

Gas meter reader

In addition to taking courses in politics and economics, students are expected to hike 100 kilometres in 24 hours, train alongside soldiers and clean public toilets. At that time Yoshihiko Noda took a job as a gas meter reader to strike up conversations with potential voters.

Mr Noda won his constituency five times in succession in Chiba, a city near Tokyo with a population of some one million people. Like his predecessor, the former Prime Minister Naoto Kan, Mr Noda does not belong to a political dynasty and worked his way to the top from a poor background. He was set on a political career from his student days. He secured his first constituency in 1987 at the age of 29.

Until his appointment as finance minister in 2010, Mr Noda stood, most mornings, with a megaphone in his hand at the Chiba railway station. By Japanese standards he is an excellent speaker. Mr Noda is not charismatic or an alpha-male type. He even makes a boast of that, comparing himself to a loach living hidden on the bed of a river.

Thanks to his reserve, Mr Noda has managed to avoid raising the hackles of either the belligerent opposition or his own party, which is deeply divided. His cabinet is in line with Japanese custom: it is a team of inconspicuous pragmatists rather than big names and solicitously reflects power relations in the Democratic Party of Japan (DPJ).

International profile

In this respect it does not differ from the cabinets of the previous Liberal Democratic Party (LDP) and DPJ governments.

None of the cabinet members has an international profile. Apart from education minister Masaharu Nakagawa, who studied at Georgetown University in the US, none of the ministers has significant experience abroad.

Finance minister Jun Azumi is an eloquent and telegenic politician, but has not made a name for himself in financial policy until now. He is considered a close ally of the prime minister, who served as finance minister in the previous government, and a potential party leader of the future.

Foreign minister Koichiro Genba, who is relatively young at the age of 47, is an unknown quantity on the international stage. Mr Genba, like Prime Minister Noda, is a graduate of the Matsushita Institute.

Defence minister Yasuo Ichikawa worked for many years as an agriculture ministry bureaucrat.

Prime Minister Noda has appointed DPJ lawmaker and former government spokesman Yukio Edano, 47, as the new industry minister after his predecessor, Yoshio Hachiro, quit only eight days into the job after he referred to the evacuated areas around the stricken Fukushima Daiichi nuclear plant as 'a town of death' and allegedly joked about radiation with reporters.

Mr Edano became widely popular and gained a reputation as accessible, honest, and hard-working during the Fukushima crisis. His information policy played a major role in re-establishing trust in the government's dealing with the situation both domestically and internationally.

Environment minister Goshi Hosono, the youngest cabinet member at the age of 40, is also worth watching. His ministry will be in charge of supervising Japan’s nuclear power stations.

Women in politics

Prime Minister Noda has also held with tradition as far as the role of women in politics is concerned: there are just two women in the new cabinet.

Yoko Komiyama leads the powerful health and labour ministry, while the half-Taiwanese Renho Murato has been reappointed as state minister responsible for administrative reform. Both started out as television journalists, a common career trajectory for female politicians in Japan.

Sweeping reforms are not to be expected under Mr Noda’s watch. He does not have the stature to implement the tough, but necessary, steps that Japan needs to get to grips with the four “D”s – debt, dysfunctional politics, demographics and deflation. It is far more likely that the prime minister will continue along the previous path of muddling through and racking up debt.

Japan has the highest public debt of industrialised countries by a large margin. Japan’s gross debt to GDP ratio is 225 per cent – compared with 130 per cent in Greece, 118 per cent in Italy, 93 per cent in the US and 74 per cent in Germany, according to an International Monetary Fund report in 2010.

Shortly after his election and buoyed by high public support, Mr Noda’s predecessor, Mr Kan, sought to make progress on implementing a sales tax increase – and failed spectacularly. At that time the DPJ lost the Upper House to the LDP. Prime Minister Noda will have drawn a lesson from that.

Sweeping reforms are not to be expected under Mr Noda’s watch. He does not have the stature to implement the tough, but necessary, steps that Japan needs to get to grips with the four “D”s – debt, dysfunctional politics, demographics and deflation

Partial cooperation

He will concentrate on questions of domestic politics such as unity of the DPJ, partial cooperation with the LDP and rebuilding the Tohoku region. When it comes to energy policy, Mr Noda will take a different position on pulling out of nuclear power from his predecessor, Mr Kan.

Prime Minister Noda is expected to advocate restarting nuclear power stations following thorough checks and work towards phasing out nuclear power in the long term. That will probably happen by not building new nuclear power stations. It is not likely that Japan will draw up a specific schedule as has been done in Germany, since the position of the government is too weak for that.

Some 40 to 50 per cent of the population, large sections of industry, the bureaucracy and the energy business continue to back nuclear power.

The situation is fundamentally different from that in Germany after the nuclear accident in 1986 at Chernobyl, Ukraine. There is no broad-based civil society movement for abandoning nuclear power, a symbol like the violent protests by nuclear power opponents at the Brokdorf power plant in northern Germany or a political group like the anti-nuclear party, the Greens.

From the perspective of international companies, the situation on the Japanese market will not change substantially.

Strong pressure

The strong yen continues to drive the market share and profitability of international firms in Japan. Mr Noda is under strong pressure from Japanese exporters to halt further appreciation of the yen. Additional interventions are expected, but they will not change the structural weakness of the dollar and the euro. Leading Japanese companies have adapted to an exchange rate of 75 to 85 yen against the dollar by making increased international investments - relocating business activities to other Asian countries and mergers and acquisitions (M&A) worldwide.

The government is encouraging the international M&A activities of Japanese companies. A series of takeovers is likely in the near future. These are promising times for companies looking to sell.

Yoshihiko Noda

  • Born May 20, 1957, in Funabashi, near Tokyo. Father was a paratrooper in Japan's self-defence forces
  • Unlike many politicians, he had no family connections to Japan's political class
  • Graduated from Waseda University, Tokyo, in 1980 and was later accepted into the Matsushita Institute of Government and Management, an institution which grooms future civic leaders of Japan
  • Elected to parliament - the Diet - in 1993
  • Elected as finance minister in the administration of former Prime Minister Naoto Kan in June 2010 whom he succeeded on September 2, 2011, becoming the nation’s sixth prime minister in five years
  • Is regarded a fiscal conservative, and as finance minister expressed his determination to slash Japan's deficit and rein in gross public debt
  • Member of the Democratic Party of Japan (DPJ)
  • Has developed close relations with the United States and sees China’s rapid military build-up as a ‘regional risk’ to Japan. He has stressed the importance of a US-Japan security alliance
  • Mr Noda faces the task reconstructing of the earthquake and tsunami-hit northeast region and resolving the world’s worst nuclear crisis since Chernobyl. He has to deal with a soaring yen which is threatening exports, a fractured party and a gridlocked parliament
  • He has confirmed his government will continue to phase out nuclear power, however, nuclear power plants sitting idle after the March, 2011, Fukushima disaster will be restarted in order to help Japan's immediate demands for energy
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