Japan’s PM to test prowess in first overseas foray

TOKYO, Reuters

Having wowed his domestic audience with a deft performance and promises of reform, Japanese Prime Minister Junichiro Koizumi is now set to test his prowess on the international stage in his first overseas foray.

Koizumi will meet U.S. President George W. Bush on Saturday at the Camp David retreat in Maryland for talks on a raft of topics from his reform agenda and Japan’s fragile economy to security and climate change.

That visit will be followed by stops in London and Paris, where Koizumi wants to touch base with leaders ahead of a summit of the Group of Eight (G-8) countries in July.

Koizumi is expected to get Bush’s backing for his agenda to reform Japan’s hidebound economy and agreement on the need for tighter security ties, but finessing gaps over the Kyoto Treaty on climate change will be far tougher, analysts said.

Kyodo news agency said on Thursday that a joint statement to be issued after the summit will call for a swift solution to the bad-loan woes that are hobbling Japanese banks, saying that it was “essential to the revival of the Japanese economy”.

A relative novice on diplomatic matters, the wildly popular Koizumi, who swept to power in late April, on Thursday sought advice from his coalition partners on how to handle the summit.

“My head is full of all the advices given to me,” Koizumi told reporters. “But in the end, I will do what I think is right … I will be frank and just let out my true self.”

Koizumi is set to explain to Bush the contents of a reform manifesto compiled by his key economic advisers last week, which outlined steps — including guidelines for cleaning up banks’ bad loans to deadbeat firms — to lead the economy to growth.

The bad-loan issue is expected to top the economic agenda at the U.S.-Japan summit, where Koizumi will stress that he is serious about getting Japan’s banks to dispose of more than 11 trillion yen (US$88.53 billion) in core bad loans within two years.

However, Koizumi’s aides said he will also reassure Washington that Tokyo is ready to take steps to spur economic activity, in addition to the painful reforms which are expected to have side-effects including bankruptcies and unemployment.

Among those measures is a plan to create 5.3 million new jobs over five years through deregulation.

Japan’s fragile economy is already nearing its fourth recession in a decade, even before the reforms begin, and Koizumi has said Japan might have to suffer an economic contraction if that’s what it takes to restore long-term growth.

The Kyodo report said that Bush may press Koizumi to work to maintain a certain level of economic growth.

Takenori Kanzaki, head of New Komeito, the second-biggest party in the ruling coalition, said on Thursday that Koizumi would tell Bush he intended to avoid minus growth.

Talks on security issues will centre on U.S. plans to build a missile defense system.

Japan is studying with Washington a theater missile defense system aimed at shielding U.S. troops in Asia and its allies, but Tokyo has been shy of endorsing Bush’s plan for a system to protect the United States, partly out of fear of angering mainland China.

Mainland China believes it is the target of the missile shield plan, while Russian and European leaders fear the plan could touch off a costly new arms race.

Koizumi is therefore likely to repeat Tokyo’s official line of “understanding” the U.S. plan but stop short of endorsing it.

“It’s what I call a policy of intentional ambiguity. Japan has always stuck to it, and whenever a final decision is sought, it goes back to it,” said Takehiko Yamamoto, a political science professor at Tokyo’s Waseda University.

Yamamoto said Koizumi would seek to ease any doubts Washington has over Tokyo’s position after Foreign Minister Makiko Tanaka last month reportedly raised questions about the U.S. missile defense in her talks with foreign counterparts.

The ambiguity gambit should also come in handy on the touchy topic of climate change, where Tokyo is caught between Bush’s decision to abandon the Kyoto treaty to reduce greenhouse gases and Europe’s pressure to ratify the pact even without Washington.

Koizumi will probably try to persuade Bush — who has dubbed the treaty “fatally flawed” — to return to the pact without clarifying whether Japan would ratify it without Washington.