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Uneasy Liberal Alliance Won't Oust Japan's Conservative Prime Minister

By Sonni Efron
Los Angeles Times

Unable to form a new coalition government, the Liberal Democratic Party on Thursday struck a loose alliance with two smaller parties that virtually ensures Ryutaro Hashimoto will continue as Japan's prime minister. But how effectively he can implement his conservative, pro-business policies as head of a minority government remained unclear.

The LDP scored sharp gains in the Oct. 20 parliamentary elections, jumping from 211 seats to 239 seats in the lower house but falling short of a 251-seat majority.

Unless Hashimoto manages to cobble together a stable coalition from the splintered, bickering conservative opposition, he remains trapped in an unhappy political marriage with his longtime ideological foes, the Social Democrats.

Under the agreement signed Thursday, the Social Democrats and New Party Harbinger will not accept Cabinet positions in a second Hashimoto government.

But the two former coalition partners will cooperate with the LDP on specific policy issues, including plans to reform the Ministry of Finance.

The powerful ministry has been under fire for mismanaging the banking industry and failing to prevent other damaging financial scandals.

As punishment, the three parties agreed to introduce a bill next year that would strip the Finance Ministry of its responsibility for overseeing and inspecting banks and give those powers to a separate watchdog agency.

The agreement also calls for other administrative reforms endorsed by almost every party in the election campaign: reducing the number of government ministries and agencies; monitoring the behavior of Japan's semiautonomous civil servants; strengthening the independence of the Central Bank; and funding nursing care for the elderly.

In a face-saving concession to Social Democratic leader Takako Doi, who dropped her fierce opposition to a consumption tax, a committee will be set up to review the planned April increase of the tax from 3 percent to 5 percent.

Political analyst Minoru Morita said the agreement's vague provisions for political reform are "meaningless."

He said Hashimoto had picked an easy target in attacking the weakened Finance Ministry in order to shield from any real reform the bureaucracies that secure the LDP's core political and financial base, including the ministries of agriculture, health and construction.

But Morita said Thursday's bargain would give Hashimoto a "100 percent assurance" of being elected prime minister when the parliament opens Thursday.

"The only question now is whether it will be decided on the first or the second ballot," he said. "I think it will be the second."