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Japan Democrats take power, tough challenges loom

(Agencies)
Updated: 2009-08-31 07:16

Pressure on democrats to deliver

Support for the LDP, which has ruled for all but 10 months since its founding in 1955, has been on a downtrend for years, but charismatic leader Junichiro Koizumi managed to lead the party to a huge election win in 2005 with promises of market-friendly reforms.

Those reforms came under fire even within the LDP for worsening social and income gaps and were further attacked after the global financial crisis tipped Japan into recession.

In an essay published this month in the New York Times, Hatoyama railed at what he called the "unrestrained market fundamentalism" of US-led globalisation but at his news conference sought to allay any concerns raised by those comments.

"We are not saying that the (free) market principles are all bad ... But the current economic situation is one where there need to be corrections in areas where reform went too far," Hatoyama said.

A series of scandals, policy flip-flops and a perceived inability to address deep-rooted problems such as creaking pension and health care systems eroded the LDP mandate.

Voters, having taken a gamble on change, will want to see proof quickly that the Democrats can do a better job.

"It's going to be crucial how they spend the first year in office, so in that sense they have to get focused very quickly to get things accomplished," said Sophia University professor Koichi Nakano. "Otherwise, the goodwill may dissipate very quickly and they may face a hostile upper house within a year."

Hatoyama will want to have his cabinet up and running in time to attend a UN General Assembly meeting and a G20 leaders summit in Pittsburgh in September.

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The Democrats want to forge a diplomatic stance more independent of the United States, raising fears about possible friction in the alliance. They have also vowed to improve ties with Asian neighbours, often frayed by bitter wartime memories.

"(Hatoyama) is basically articulating the idea that the US-led Pax Americana era has come to an end," said Sheila Smith at the Council on Foreign Relations in New York.

"My sense of the DPJ is that they have wanted a little distance between Tokyo and Washington."

Budgetary matters will claim much of the government's attention in its early days. Party leaders have said they might freeze or redirect some of the 14 trillion yen ($149.5 billion) in stimulus spending planned for the year to March 31, 2010.

They may have to craft an extra budget for the current fiscal year to cover an expected tax revenue shortfall, and Japanese media said the party wants to have an outline of the budget for 2010/2011 by sometime in October.

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