As anticipated, Keizo Obuchi, the newly elected president of the ruling Liberal Democratic Party, easily won the premiership in July 30 Diet balloting. However, Mr. Obuchi captured 268 of the 494 valid votes cast in the more important 500-member lower house, effectively overriding the upper house action. The constitution stipulates that the decision of the House of Representatives always prevails when there is a discrepancy between the upper and the lower chamber concerning election of the prime minister, ratification of treaties or enactment of the national budget. Mr. Obuchi's handy win in the lower house, however, belies serious questions both at home and abroad about whether he is up to the formidable challenge of orchestrating an economic turnaround. In fact, opinion polls conducted right after the new prime minister announced his cabinet suggested that the Obuchi administration may go down in history as the least popular of any newly installed Japanese government.
Few pundits see a bright side.
However, the new prime minister still may be unable to deliver in a timely manner on his promises to clean up the mess in the banking industry caused by the huge overhang of nonperforming loans and to implement additional tax cuts and public works programs. Faced with likely pressures from a newly empowered political opposition as well as divisions within the ruling party, even some LDP members believe that perhaps as early as January 1999, Mr. Obuchi's government could collapse under the weight of political and policy burdens. Fueling pessimism about the new premier's tenure is the fact that, notwithstanding the bold name given the new government, the cabinet selection process still seemed to be influenced by change-resistant party politics. Specifically, Mr. Obuchi persuaded former Prime Minister Kiichi Miyazawa, a noted authority on economic and financial matters, to become minister of Finance. He also pleasantly surprised some critics by tapping economic commentator Taichi Sakaiya as director general of the Economic Planning Agency and Toyoo Gyoten, a former vice minister of Finance and chairman of Bank of Tokyo-Mitsubishi, Ltd., as a special economic adviser.