Left, Naoto Kan, successor to Finance Minister Hirohisa Fujii, center, last year with Chief Cabinet Secretary Hirofumi Hirano. Issei Kato/Reuters
January 7, 2010
TOKYO — Dealing another blow to the fledgling government, the Japanese finance minister resigned Wednesday, leaving Prime Minister Yukio Hatoyama to appoint a successor with little fiscal experience to grapple with financing an ambitious campaign agenda, a growing public debt and a fading economic recovery.
Deputy Prime Minister Naoto Kan, a founder of the governing Democratic Party and the minister in charge of economic policy and state strategy, will succeed the finance minister, Hirohisa Fujii, Mr. Hatoyama said.
Mr. Fujii, 77, cited fatigue and deteriorating health as the reasons for his resignation, which was tendered just as the government was preparing to shepherd through Parliament a record $1 trillion budget for the fiscal year that starts in April.
Mr. Kan, 63, a former activist and champion of reducing the authority of bureaucrats, is seen as having the political influence but none of the financial expertise of Mr. Fujii. A fiscal conservative and former Finance Ministry bureaucrat, Mr. Fujii was considered a valuable experienced hand in the cabinet of Mr. Hatoyama, whose Democratic Party came to power in September.
Investors saw Mr. Fujii as a reassuring check on the left-leaning government’s spending plans. In recent months he had wrangled with ministries over budget cuts as Japan struggled to restrain its public debt, which is close to twice the size of the gross domestic product.
But the Democrats also want to finance an ambitious social agenda, including payments to families with children and free public high school education. The agenda formed the cornerstone of their campaign proposals.
Some analysts attributed Mr. Fujii’s departure to a rift with the Democratic Party’s powerful secretary general, Ichiro Ozawa, who has pushed through a series of changes in the government’s fiscal policy. Last month, Mr. Ozawa publicly criticized Mr. Fujii’s budgeting process, questioning whether the finance minister was doing enough to curb the power of Japanese bureaucrats, who have maintained control of the country’s budget for decades.
It will now be up to Mr. Kan to guide the budget through Parliament, which convenes this month, and to draft additional stimulus packages that analysts expect will be necessary to sustain an economic recovery.
Mr. Kan has argued for more stimulus measures, saying that Japan faced a slide back into recession. But in recent months, he has also expressed caution against a budget so big that it could sharply increase the nation’s debt.
Mr. Hatoyama expressed confidence in Mr. Kan. “I wanted to appoint a successor who has worked most closely with the finance minister,” Mr. Hatoyama said.
Mr. Kan later said that he intended “to do the utmost as finance minister.”
Still, analysts called Mr. Fujii’s resignation a big setback for Mr. Hatoyama’s government.
“Mr. Fujii was one of Mr. Hatoyama’s most active and visible ministers,” said Yoshiaki Kobayashi, professor of Japanese politics at Keio University. “Mr. Kan is a good politician, but fiscal and economic policy is not his expertise at all.”
Mr. Fujii, suffering from exhaustion and high blood pressure, checked into a hospital on Dec. 28, and had been commuting to work from there.
Mr. Hatoyama had at first urged Mr. Fujii to remain in his post to present the coming fiscal year’s budget to Parliament. But the prime minister said late Wednesday that Mr. Fujii had tendered his resignation and that the government had no choice but to accept it.
Public approval ratings for Mr. Hatoyama’s government have slid from postelection highs of more than 70 percent to less than 50 percent in recent polls.
Mr. Kan will be the sixth Japanese finance minister since August 2008.
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