Japanese hardliner ducks the economic challenge

The new LDP leader may belie his fiery reputation, writes Richard Lloyd Parry

Tokyo - Ryutaro Hashimoto has just been elected leader of Japan's biggest political party at a time of profound economic crisis. "What the people want us to do quickest," the Minister of International Trade and Industry explained yesterday, after his landslide victory in the elections for the presidency of the right-wing Liberal Democrat Party, "is to put the economic recovery on track."

Growth is stumbling along at close to zero for the third consecutive year, unemployment is at a post-war high, and there are fears of an inexorable slide back into recession. Yet given the circumstances, Mr Hashimoto's address to the LDP was exceptionally underwhelming.

Last week the government committed the immense sum of 14.2 thousand billion yen in loans and public spending to jump-start the economy, only to have it denounced by economists as a confidence trick. The time, it would seem, is ripe for firm economic leadership.

But the coalition government remains stuck in an obscure political jam that promises no relief for several months to come.

Mr Hashimoto's case illustrates the complexities of the current situation. On the face of it, he is the most exciting personality seen in Japanese politics for a decade. An arrogant, combative conservative, he became a hero earlier this year by fending off American negotiators in a dispute over car imports. In August he reinforced his reputation as a patriot by attending services at a controversial war shrine on the 50th anniversary of Japan's Second World War defeat.

Foreign diplomats are wary of his nationalism; all month, television and newspapers have carried emblematic images of Mr Hashimoto practising his hobby - kendo, the art of fencing with bamboo swords. But as he takes over the LDP leadership from the moderate Foreign Minister, Yohei Kono, there is little chance that his dynamism will find any immediate expression.

The problem lies in the uneasy coalition which has governed Japan for 14 months. After 38 years of government, the LDP lost its majority in 1993 when party colleagues of Mr Hashimoto broke away to create a short- lived reform party. After a year of reconfigurations, the LDP returned to power as the largest partner in an uneasy alliance with its former enemies, the Social Democratic Party (SDP), and the small New Party, Sakigake.

The Prime Minister, Tomiichi Murayama, is a Socialist who has clung on to power through a year of crises and at the cost of jettisoning most of his party's Socialist policies. At a conference last week, his SDP acknowledged the inevitable by voting to dissolve and rename itself this autumn - though with no agreement as to what form the reconstituted party will take.

All along, the majority of cabinet posts have been held by Mr Hashimoto and his LDP colleagues. Their intention, plainly, is to win back their majority at the next general election, expected in spring. But none of the government parties is ready to go to the polls. In elections to the upper house of the Diet, all three suffered heavy losses to the opposition Shinshinto (New Frontier Party), another hybrid of reform groups and estranged conservative politicians.

Throughout his campaign for the LDP presidency, Mr Hashimoto has found himself caught in a bind. He must make it clear that he will be fighting the next election to win, and struggle to make his party distinctive and electable, while remaining conciliatory to the coalition partners.

Something has to give, and the ballast which all three parties have chosen to dump is the same: policy. During his presidential campaign, Mr Hashimoto made ritual noises about deregulation of Japan's markets. But his tough stand against opening up to American car imports makes this implausible. His great defining characteristic, nationalism, remains unacceptable to the Socialists. The situation is unlikely to change for months, until Socialists and liberals unshackle themselves and face the judgement of the electorate.