April 1, 2008 / 3:59 AM / 11 years ago

ANALYSIS-Japan PM limps towards the exit; gridlock to stay

TOKYO, April 1 (Reuters) - Yasuo Fukuda looks set to become the latest Japanese prime minister to exit after a brief and troubled tenure, but his successor is all but certain to face the same political gridlock plaguing the 71-year-old leader.

That means wannabe premiers in the ruling Liberal Democratic Party (LDP), such as outspoken former foreign minister Taro Aso, are likely to bide their time.

“It’s very hard to see Fukuda taking the LDP into the next election unless he has a miraculous turn of fortune,” said Gerry Curtis, a political science professor at New York’s Columbia University.

“But I think at the moment, you’d have to bet that he will limp along, because the party shudders at the thought of having to find his successor.”

No election for parliament’s lower house need be held until September 2009 and the ruling bloc is wary of risking an earlier poll that would likely deprive it of the huge majority won under charismatic reformist prime minister Junichiro Koizumi in 2005.

Still, some pundits think the prime minister — whoever that might be at the time — could be forced into a snap election to seek a mandate to break the parliamentary logjam, which is dampening hopes Japan can deal with a stalling economy and business sentiment languishing at a four-year low.

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Media-savvy maverick Koizumi, who managed a rare five-year term before stepping down in 2006, galvanized voters and charmed investors with pledges to break vested interests’ grip on the LDP and free the economy from the government’s heavy hand.

“Under Koizumi, the call for reform and breaking the old mould not only sounded nice, but there were a lot of fresh ideas. He confronted not only bureaucrats, but also his on party,” said Martin Schulz, an economist at Fujitsu Research Institute.

“Now institutional investors are more frustrated than they have been for a very long time,” he added. “The mood in financial markets is more depressed than I have seen in 10 years.”

Amid a global markets crisis, Japan’s Nikkei stock average has fallen a quarter since Fukuda took office in September.

REVOLT FROM WITHIN?

Fukuda, a moderate best known for favouring warmer ties with Japan’s Asian neighbours, was tapped to succeed Shinzo Abe, who quit abruptly after a year in office dogged by scandals and gaffes by cabinet ministers and an election thrashing that gave control of parliament’s upper house to the opposition.

Welcomed by support levels of around 60 percent, the bland but sometimes testy Fukuda has seen his ratings slashed in half by an inability to cope with the divided parliament, where the upper house can delay laws and block appointments.

In the latest sign of a deadlock that has already prevented the appointment of a Bank of Japan governor, a gasoline tax earmarked for building roads and seen by the opposition as a symbol of the LDP’s wasteful spending on vested interests expired on Monday after failure to reach a deal.

Fukuda, in a bid to break the stalemate with the opposition Democratic Party, last week unveiled a proposal that would free up tax revenues dedicated to road construction from fiscal 2009/10, a step the Democrats wants taken right away.

But he has stuck to a plan to keep the three-decade-old “temporary” gasoline tax because the heavily indebted government needs the 2.6 trillion yen ($26 billion) it raises each year.

Fukuda’s proposal was not only rejected by the Democrats but has angered LDP heavyweights who have long relied on public spending on road construction to woo voters in rural districts.

“The biggest danger he faces is a party revolt,” Curtis said.

CANDIDATE ROSTER

The Democrats stepped up their pressure on Fukuda’s government on Tuesday, deciding to submit a non-binding but embarrassing censure motion in the upper house against the health minister over botched public pension records, Kyodo news agency said. The timing of the move was not decided, Kyodo added.

The Democrats have also threatened to submit a censure motion against Fukuda if he tries to reinstate the gasoline tax by using the ruling bloc’s two-thirds majority in the lower house.

Until recently, many analysts had thought Fukuda could keep his job at least until he hosts a Group of Eight summit in July.

“The sensible thing is for the LDP to try to have him last until the summit meetings are over, but it’s hard to tell whether he can last that long,” said Koichi Nakano, a political science professor at Sophia University.

Aso, 67, is widely seen as the frontrunner to succeed Fukuda.

The scion of a political family and known as a fan of Japanese anime films and manga comics, Aso wants to see Japan take a bigger global role and revive traditional values at home.

He also has a reputation for making remarks that offend. He stirred anger in both North and South Korea in 2003 for comments seen as praising Japan’s 1919-1945 colonisation of the peninsula.

Yuriko Koike, 55, a former TV announcer and the first female to serve as Japanese defence minister, has also been floated as a possible dark horse candidate, while speculation also lingers that Koizumi might be tempted to make a comeback.

Sophia’s Nakano said that was unlikely: “He chose the right moment to leave and look like a great leader, so to come back and appear not so great would be disappointing.” ($1=99.86 Yen) (Editing by John Chalmers)

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