Japan's new economy minister seen soft on reform

Japan's new economy minister seen soft on reform
REUTERS

TOKYO, JAN 23: Taro Aso, tapped as Japan's new economics minister on Tuesday after his predecessor resigned over a scandal, is a six-term lawmaker with an elite political pedigree who is seen unlikely to be aggressive on economic reform.

Aso, 60, is the grandson of the late Prime Minister ShigeruYoshida, known as the father of postwar conservative politics and the son-in-law of another former Prime minister, Zenko Suzuki.

A graduate of elite Tokyo's Gakushuin University, he alsoattended the graduate school of California's Stanford University.

He served as Economic Planning Agency Chief under thegovernment of then-Prime Minister Ryutaro Hashimoto and now takes over as the minister in charge of economic and fiscal policy and a key member of a new panel set up in the new year to pry control of the budget process away from Finance Ministry bureaucrats.

"He has risen through the ranks through seniority, pedigreeand knowledge," said one foreign economist. "He is a member of the elite, no question, but not very aggressive in self-promotion.

"He has not taken a stance on economic policies, but has beenpolitically correct in terms of the LDP (ruling Liberal Democratic Party)."

A more scathing view came for Soichi Okuda, senior economistat Aozora Bank, who said the appointment seemed to have been made not by choosing an appropriate person but as the outcome of factional power struggles in the LDP.

"The markets do not expect him to give a strong lead ineconomic policy-making. He used to be head of the Economic Planning Agency but did nothing notable during his term there."

Okuda added: "His family runs a cement company, typical oldindustry, and it is hard to believe he's an expert in information technology."

First elected to parliament's Lower House in 1979, Aso hasserved six terms in the powerful chamber and is said to be well-versed in foreign policy issues.

Unlike his predecessor, Fukushiro Nugaka, who was a member ofthe LDP's biggest faction now led by Hashimoto, Aso is a member of the smallest faction in the long-dominant party. That faction is led by Foreign Minister Yohei Kono.

Some analysts saw him as unlikely to take an aggressivestance towards the economic reforms many say are vital to achieve long-term growth in Japan's long-stagnant economy and was unlikely to take a strong leadership role on economic policy.