Japan's new leader vows economic shift

Japan's new leader vows economic shift

Long-time opposition leader Yukio Hatoyama took office as prime minister today, naming a new Cabinet and vowing to rebuild the economy and refocus Japan’s place on the world stage with his largely untested party.

Mr Hatoyama’s victory over the conservatives, who have governed Japan almost non-stop since the Second World War, marks a major turning point for Japan, which is facing its worst post-war economic slowdown with unemployment at record highs and deflation intensifying.

But concerns run deep over whether the new government will be able to deliver.

Mr Hatoyama has promised to cut government waste, rein in the national bureaucracy and restart the economy by putting a freeze on planned tax hikes, removing tolls on highways and focusing policies on consumers, not big business.

He also has pledged to improve Tokyo’s often bumpy ties with its Asian neighbours and forge a foreign policy that is more independent from Washington.

“I am excited by the prospect of changing history,” Mr Hatoyama said. “The battle starts now.”

The new prime minister – who is expected to make his diplomatic debut in New York next week at the United Nations – said he wanted to build a relationship of trust with President Barack Obama by exchanging views “frankly.”

“Japan has been largely passive in our relationship, but I would like to be a more active partner,” he said.

Parliament convened a special session today to formally select Hatoyama, whose Democrats won a landslide in parliamentary elections last month to take control of the body’s powerful lower house, ousting Prime Minister Taro Aso’s long-ruling Liberal Democratic Party, which is conservative and staunchly pro-US

In the parliamentary vote to choose the prime minister, Mr Hatoyama won 327 of the 480 votes in the lower house. He needed a simple majority of 241.

Quickly after his election, Mr Hatoyama named Katsuya Okada as his foreign minister and Hirohisa Fujii as his finance minister.

Though Mr Okada has never held a Cabinet post, Mr Fujii was finance minister under a coalition government in 1993-94, the only time in its 55-year history that the Liberal Democrats had previously been ousted from power.

Fujii was also a former bureaucrat in the Ministry of Finance – suggesting that the new government won’t be too confrontational with Japan’s powerful ministries.

Mr Hatoyama and his party, a mix of defectors from the conservative party and social progressives, face huge tasks that they must deal with quickly.

Although it has recently shown some signs of improvement, Japan’s economy remains deeply shaken by the global financial crisis and unemployment is at a record high of 5.7%.

The rapid ageing of its population also threatens to be a drag on public coffers as the number of taxpayers decreases and pension responsibilities swell.

“I want the people to feel that their pocketbook situation is improving, even a little, as soon as possible,” Mr Hatoyama told a news conference.

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