Ichiro Ozawa: Reformer at Bay

When Ichiro Ozawa, a longtime Diet member and power broker, published Blueprint for a New Japan two years ago, his main goal was to reverse the country's reluctance to play a larger role in world affairs. Ozawa, at that time a senior leader of the Liberal Democratic Party (LDP), was obsessed with Tokyo's refusal to provide on-the-ground support for the U.S.-led forces during the Persian Gulf War, despite repeated requests from Washington. He called the episode a defeat whose origins could be traced to the "politics of indecision" and the lack of a clear center in Japanese politics. Unless Japanese politicians revised the rudderless postwar system, Ozawa argued, the country would go the way of ancient Carthage, whose "belief that wealth alone could sustain a nation ultimately caused its demise."

Since then, Ozawa's complaints about the failure of Japan's leadership have grown even more acute. The Kobe earthquake, which left more than 5,500 dead in January, is the most prominent and tragic example. Socialist Prime Minister Tomiichi Murayama vacillated, unsure of his own powers; ministries responded with detachment and little coordination; and the military waited for deployment orders that came too late. In the eyes of the Japanese, the tragedy easily surpassed the Persian Gulf War as a display of systemic paralysis.

The lack of a sure?handed economic policy is yet another unaddressed crisis. Japan is in its fourth year of near?zero growth, and the strong yen is driving industry offshore at an unprecedented rate. Banks face a bad debt burden estimated at as much as $1 trillion, nearly a quarter of GDP. Japan obviously needs to shed much of its old Japan Inc. thinking and build up the consumer side of the economy through deregulation and market openings. Most banking experts agree that the banks must be bailed out. But these policy shifts are too much to expect from Japan's powerful but narrowly focused bureaucrats.