Ichiro Ozawa: Reformer at Bay

Edward W. Desmond

From Foreign Affairs, September/October 1995

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Summary:  Ichiro Ozawa, a former power broker in the Liberal Democratic Party, has become a seminal figure of Japan's reform movement. A leader of the up-and-coming New Frontier Party, in 1993 he wrote an influential bestseller, Blueprint for a New Japan, that helped define the national debates over democratic reform, social issues, and foreign policy. He views himself as Meiji-type leader, trying to awaken Japan to the changes in the outside world. But many of the Japanese are wary of the savvy backroom dealmaker. In any case, his views are helping chart Japan's diplomatic course: a more engaged global role coupled with a resilient U.S. partnership.

Edward W. Desmond is Time magazine's Bureau Chief in Tokyo.

When Ichiro Ozawa, a longtime Diet member and power broker, published Blueprint for a New Japan two years ago, his main goal was to reverse the country's reluctance to play a larger role in world affairs. Ozawa, at that time a senior leader of the Liberal Democratic Party (LDP), was obsessed with Tokyo's refusal to provide on-the-ground support for the U.S.-led forces during the Persian Gulf War, despite repeated requests from Washington. He called the episode a defeat whose origins could be traced to the "politics of indecision" and the lack of a clear center in Japanese politics. Unless Japanese politicians revised the rudderless postwar system, Ozawa argued, the country would go the way of ancient Carthage, whose "belief that wealth alone could sustain a nation ultimately caused its demise."

Since then, Ozawa's complaints about the failure of Japan's leadership have grown even more acute. The Kobe earthquake, which left more than 5,500 dead in January, is the most prominent and tragic example. Socialist Prime Minister Tomiichi Murayama vacillated, unsure of his own powers; ministries responded with detachment and little coordination; and the military waited for deployment orders that came too late. In the eyes of the Japanese, the tragedy easily surpassed the Persian Gulf War as a display of systemic paralysis.

The lack of a sure?handed economic policy is yet another unaddressed crisis. Japan is in its fourth year of near?zero growth, and the strong yen is driving industry offshore at an unprecedented rate. Banks face a bad debt burden estimated at as much as $1 trillion, nearly a quarter of GDP. Japan obviously needs to shed much of its old Japan Inc. thinking and build up the consumer side of the economy through deregulation and market openings. Most banking experts agree that the banks must be bailed out. But these policy shifts are too much to expect from Japan's powerful but narrowly focused bureaucrats.

Before its breakup and defeat in the 1993 general elections, the LDP might have been able to provide the needed leadership on the economy, if only because it was intertwined with Japan's business sector and the bureaucracy. But today that so?called iron triangle is fractured. Scandal after scandal has depleted the credibility of the Liberal Democrats, who are the largest partner in Murayama's coalition. They are divided among themselves and preoccupied with maneuvering for the next lower house election, which must take place by mid?1997. Absent a political center, bureaucrats are freer than ever to pursue narrow agendas, such as trade disputes with the United States or ministry prerogatives. Big business, despairing of a more rational economic policy, is struggling to cope with the strong yen and to preserve the shaky social contract promising lifetime employment.

The uneasiness in Japan is a far cry from the mood two years ago, when Morihiro Hosokawa, the reformist "Mr. Clean," formed the first non?LDP government in 38 years with the help of Ozawa's breakaway group. In a remarkable eight months, Hosokawa and Ozawa delivered ...

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