An Extensive Reshuffle

Embattled Japanese prime minister Yasuo Fukuda on Friday (1 August) carried out a sweeping cabinet reshuffle aimed at shoring up waning public support and reinvigorating the economy. The reshuffle saw the replacement of 13 of 17 ministers in his cabinet, with Fukuda holding that the changes will make the population feel "the fruits of reform" amid widespread discontent over soaring global oil and food prices.

The cabinet reshuffle undertaken was extensive, but has kept key portfolios in place. As such, Nobutaka Machimura, head of the most powerful LDP faction, remains chief cabinet secretary, while Masahiko Komura stays in his position as foreign minister. Fukuda has meanwhile handed the key post of secretary-general of the LDP to a former contender for the premiership, the hawkish Taro Aso, in an apparent bid to draw on his popularity within the party as well as beyond.

Shaking Up the Economy Team

In carrying out the cabinet reshuffle, Fukuda has emphasised the importance of delivering on economic reform pledges, putting in place a new economy team. Kaoru Yosano—who is known to be a staunch advocate of a controversial consumption tax invcrease to address the problem of Japan's ballooning debt—has been appointed to take charge of fiscal policy. LDP secretary-general and former finance ministry bureaucrat Bunmei Ibuki was meanwhile named finance minister, replacing Fukushiro Nukaga who faced calls for his resignation last year after being associated with a military contractor involved in a large-scale bribery scandal. Veteran LDP party official Toshihiro Nikai was given the job as minister of economy, trade, and industry—a position that he has previously held.

Outlook and Implications

The cabinet reshuffle is aimed at boosting Fukuda's support and aborting calls from the opposition for him to call an early election, currently due in September 2009, with concerns being that in the event of this the LDP would lose its sizeable majority in the powerful lower house of the Diet. The opposition has been on the rise, winning a majority in the upper house election last year, providing them with the clout to trigger numerous legislative deadlocks. These have held up key legislation, stalling the passing of anti-terror legislation sanctioning Japanese deployments in support of its key security ally, the United States, in the Indian Ocean and the instatement of a new Bank of Japan (BoJ) governor. They have overall put into question the efficacy of the Fukuda administration, with the opposition bent on forcing his resignation. The resurgent opposition has also seized on a growing feeling that the situation of ordinary people has not improved amid soaring food and fuel prices, blaming the government led by the Liberal Democratic Party (LDP) for having implemented free market reforms with ordinary people bearing the resulting burden. Fukuda's popularity has consequently dwindled since he acceded to the premiership in September last year, not least due to a controversial medical plan tabled that will raise the cost of medical care for the elderly.

Fukuda was widely expected to carry out a cabinet reshuffle to avert calls for an early election, or for his own resignation. He has now bought himself some time to shore up confidence in his leadership with a new cabinet in the face of growing pressure from within his own party, as growing numbers of LDP members have supported an early election, fearing that the drop in support for Fukuda could undermine the position of the party. The efficacy of this plan will in large part depend on whether the new cabinet delivers on reforms pledged and stays clear of further political crises and legislative stasis. The latter will in turn depend to a high degree on the opposition and whether it continues to push its confrontational tactics.

Meanwhile, the appointment of Aso as secretary-general is widely interpreted to signal that Fukuda is preparing to step down after the election, if not forced to do so before, with the popular Aso lined up to take over the premiership should this be deemed necessary. Aso has run for the premiership three times previously, also contending for the post when Shinzo Abe stepped down last year. He, however, lost this to the dovish Fukuda, who was then considered a safe pair of hands who could aid in improving relations with Japan's largest trading partner, China. Aso himself stated that he had accepted the position in a bid "to tide over what appears to be the biggest crisis since the party's foundation", according to Agence France-Presse (AFP). The reshuffle is in this context also to be seen as a measure to reassure the LDP's junior coalition partner, the New Komeito, to remain in the coalition, with the former depending on the latter for its two-thirds majority in the lower house.