Saturday, Jun 23, 2018
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Japan's vote for modernity

THE bigger than expected victory of Prime Minister Junichiro Koizumi's Liberal Democratic Party in Japan's parliamentary elections was good for Japan, good for the East Asian region, and good for the United States.

Mr. Koizumi, 63, posited the elections as putting it on the line for the economic reforms that the country needs badly. The particular issue was the privatization of Japan's post office system. That isn't just an operation that sells pretty stamps; Japan's postal system provides a range of services to millions of customers, including serving as a banking and insurance institution, the sort of thick-skinned Godzilla-type antique structure that is the personification of what is wrong with a Japanese economy modernizing with difficulty. It has $3 trillion in assets.

Japan's upper house of parliament rejected Mr. Koizumi's plan to modernize it. In the elections he sought a large enough margin in the lower house to overrule the upper house. He also made it clear that it was a "back me or sack me" choice for Japanese voters. He got what he needed last Sunday in a large turnout, with a big margin for his party.

Japan, the world's second largest economy, needs modernization and reforms. East Asia needs a strong Japan to keep China from simply rolling over the rest of the region in terms of overall magnitude and growth. The United States needs a strong Japanese economy to keep buying the U.S. treasury bonds that finance America's budget deficit - now to grow even more with the relief and reconstruction costs of Katrina added to the cost of the Iraq war - and its growing debt. It also needs help in containing China.

Some observers express concern over Japan's growing military strength, with all of the bad echoes that brings in East Asia, particularly with China and the Koreas.

On the other hand, with the United States receding as a credible military power capable of providing a military umbrella to Japan, what exactly does the United States expect Japan to do? That country lives in a sometimes dangerous neighborhood; it has been able to build itself economically in part because it has not had to spend billions on defense, with that being assured by the United States. With that status quo changing, Japan is going to begin paying more attention to covering its back.

Expect no fast moves. The privatization of the post office system does not kick in until 2017, 12 years from now. The withdrawal of U.S. forces from Japan will not occur tomorrow. A strong Japan has been living side by side with a strong China and a strengthening Korea for thousands of years.

But in that context, Mr. Koizumi's victory is a good thing. He is a modernizing leader of a very important country.

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