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Japan's new ruling Democratic Party of Japan (DPJ) leader Yukio Hatoyama bows after being elected as Japan's new prime minister - Source: Reuters -
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Japan's Yukio Hatoyama was voted in as prime minister by
parliament's lower house, ushering in an untested government that
must try to revive a struggling economy and manage ties with
nervous ally Washington.
Hatoyama, whose Democratic Party of Japan (DPJ) trounced the
long-ruling Liberal Democratic Party in an election last month,
faces pressure to make good quickly on campaign promises to focus
spending on consumers, cut waste and reduce bureaucrat control over
policy.
The US-educated Hatoyama, 62, wearing his lucky gold, silver and
blue striped tie and signature pocket handkerchief, stood and bowed
after the vote.
"I have mixed feelings of excitement about changing history and the
very heavy responsibility of making history," said Hatoyama, whose
party ousted the LDP for only the second time since its founding in
1955.
"The fight begins now," he said as he left home earlier.
Hatoyama's cabinet, a delicate balance of former Liberal Democrats,
ex-socialists and younger conservatives, must hit the ground
running.
"The DPJ has got to come up with an agreed list of priorities
quickly, because its manifesto is just a long laundry list," said
Koichi Nakano, a professor at Sophia University in Tokyo.
"And it better not just be how they will govern differently, but
actual policies," he added.
"They can expect something of a honeymoon for a year, but not
longer than that."
Hatoyama's choice of veteran lawmaker Hirohisa Fujii, 77, as
finance minister has soothed some analysts' concerns that the
government's spending programmes will inflate an already huge
public debt as Japan struggles to emerge from recession and cope
with the bulging costs of a rapidly ageing society.
Fujii moved currency markets even before he was sworn in, pushing
the yen up 0.5% against the dollar by telling reporters a strong
yen had merits for Japan's economy and that recent moves were not
rapid.
Hatoyama's choice of Shizuka Kamei, the outspoken head of a tiny
coalition partner, as minister for banking supervision and postal
services has also spooked some experts worried about Kamei's
opposition to market-friendly reforms.
Independent diplomacy, budget battles
Hatoyama's vow to steer Japan on a more independent diplomatic
course has sparked concerns about possible friction with top ally
the United States ahead of his diplomatic debut there next week,
where he will meet President Barack Obama.
The US-educated Hatoyama is expected to reassure Obama over ties
and perhaps postpone calls for re-negotiation of agreements on US
troops stationed in Japan.
On his return, Hatoyama faces the urgent task of drafting a budget
for the fiscal year from next April 1 and finding ways to plug
holes in this year's budget caused by sliding tax revenues as Japan
struggles out of its worst recession since World War II.
The new government must balance the need to nurture a recovery and
fund its consumer-friendly spending programmes with concerns about
a public debt heading towards 200% of GDP.
"People aren't fools. We know that money has to come from somewhere
but I just don't know where," said 50-year-old businessman Eiji
Shimagami.
The Democrats have promised to scrap public works projects and
other programmes they consider wasteful and use freed up cash to
stimulate consumption through measures such as payouts to farmers
and families with children and ending highway tolls.
The economy returned to slow growth in the second quarter but still
suffers a record high jobless rate and record deflation.
The Democrats have vowed to centralise decision-making in the
cabinet, and a new National Strategy Bureau will be tasked with
reforming what the Democrats say is a cumbersome policy-making
system that relied heavily on recommendations from
bureaucrats.
That means the finance minister will likely share responsibility
for the budget with former Democratic Party leader Naoto Kan, who
will head the new bureau.
Kan, who battled bureaucratic corruption as health minister in the
1990s, is seen as a pragmatic force for change.
Hatoyama must also hold together an awkward coalition with the two
tiny parties whose support he needs in parliament's upper house,
and may face fall-out from money scandals looming over him and
party No 2 Ichiro Ozawa.
Besides conservative People's New Party head Kamei, he will appoint
Social Democratic Party leader Mizuho Fukushima to take charge of
consumer affairs and policies to boost Japan's very low
birth-rate.
