Socialist teacher to run Japan's finances

Cabinet chosen: Struggle to persuade colleagues to take ministerial posts points to difficult future for new prime minister

RICHARD LLOYD PARRY

Tokyo

Ryutaro Hashimoto, 58, leader of Japan's Liberal Democratic Party, was elected Prime Minister yesterday, and unveiled his new cabinet after days spent trying to persuade colleagues to accept one of its key posts.

After the unexpected resignation last week of Tomiichi Murayama, Mr Hashimoto's accession was assured and, with the support of all three parties in the governing coalition, he won a comfortable majority over his nearest rival, Ichiro Ozawa, of the opposition Shinshinto (New Frontier) party.

But despite the co-operation of the Social Democratic Party (SDP) and the New Party Sakigake, the job of Finance Minister was filled only a few hours before it was due to be announced. After a farcical game of political pass-the-parcel, it landed in the lap of Wataru Kubo, the SDP secretary-general, a former teacher with no experience of government.

The cabinet fiasco is symptomatic of the problems facing Mr Hashimoto, the fourth Prime Minister since the general election of 1993, when the LDP lost its 38-year-long majority after the defection of some of its senior members.

The finance portfolio, one Japan's most powerful posts, is regarded as a poisoned chalice, and at least two senior LDP members refused point blank to assume stewardship of the second largest economy in the world.

Apart from the general sluggishness of the economy, which hovered on the edge of recession throughout Mr Murayama's tenure, the new Finance Minister faces the particular problem of seven bankrupt jusen, or housing- loan corporations. A bail-out plan has been agreed by the coalition but it is highly unpopular, involving the use of 685bn yen (pounds 4.35bn) of public money to save the jusen, which were brought to their knees after rash lending during the "bubble economy" of the 1980s.

Many economists place the blame for this with the LDP, which then enjoyed unchallenged power.

The career of the last finance minister, Masayoshi Takemura, was, in effect, brought to an end by his tenure in the post.

By appointing the Socialist Mr Kubo as the fall guy responsible for steering the plan through parliament, Mr Hashimoto has cunningly deflected opprobrium for the expensive scheme away from his own party.

Mr Hashimoto's choices as cabinet ministers indicated he did not believe the time was ripe yet for any major gambles.

The new cabinet has only two ministers under the age of 50 and only one woman, who is also the only non-politician.

Mr Hashimoto gave 12 cabinet posts to LDP members, six to Socialists and two to members of Sakigake, an LDP splinter group led by Mr Takemura, who declined to continue in the cabinet.