Wednesday, March 12, 2008

Bank chaos

The fight between the LDP-Komeito governing coalition and the DPJ over the leadership of the Bank of Japan shows no sign of abating.

On Wednesday, of course, the DPJ-led House of Councillors formally rejected the government's nomination of Muto Toshiro to be the new president of the BOJ. The government has resubmitted Mr. Muto's nomination in response. In his daily press conference Wednesday, Chief Cabinet Secretary Machimura Nobutaka professed an inability to understand the DPJ's reasoning and once again highlighted the urgency of a smooth transition to a new BOJ president given prevailing financial conditions.

I must agree with MTC: the DPJ does not bear the blame for this "crisis" alone. For all of Mr. Fukuda's willingness to cooperate with the opposition, his party and his government have failed to come to terms with new masters of the Upper House. They have refused to accept that they actually have to consult with the DPJ, instead of presenting them with proposals as faits accompli (as they did in the case of Mr. Muto). Not surprisingly, Kitagawa Kazuo, Komeito secretary-general, used this occasion to complain about the constitutional defect of the HC's role in personnel appointments, illustrating the disdain with which the government still views the opposition's control of the HC.

If the government is so concerned about a vacancy at the bank, it should have been both (a) making the case for Mr. Muto persistently and loudly starting months ago and (b) exploring alternatives with the DPJ. The LDP is always talking about urgent national problems and yet now, when faced with one, it seems that the government has no plan B. It's Muto or nothing. Is there really only one man qualified to serve as BOJ president? If so, Japan must be in even worse shape than I thought.

So the HR will pass the Muto nomination again this afternoon, daring the HC to once again reject it. If it does, will the government nominate Mr. Muto a third time? And will the DPJ suffer political consequences as a result of holding fast in its opposition to Mr. Muto?

1 comment:

Anonymous said...

This is such an important issue, and the coverage on it has been so bad so far, aside from what I see here or at Shisaku.

First, we need to bear in mind that Mr Muto was put forward as a possible candidate for BOJ Governor well before the Upper House election. I predicted he would get the job back in June of 2007, and I'm hardly in the loop.

Back in November I was wondering what impact the re-alignment in the Upper House would have upon his nomination, such a certain candidate was he (http://www.japaneconomynews.com/2007/11/20/where-politics-shouldnt-be-is-mutos-tenure-as-next-boj-governor-already-in-danger/)

We also need to bear in mind that he is one of the ten or so people alive best prepared and best suited for the job.

All that said, it's unfortunate that he has been caught up in this row, but the DPJ's rejection is actually good for Japan, despite what the reactionists who want to abolish the Upper House think.

If one competent man is sacrificed in order for true democracy to be put in place, then so be it. Mr Muto is hardly going to be out of work at this time next year.

The LDP is a dying breed, a dinosaur from the 20th century like a fish in water - that is, unable to breathe anywhere else (if I may borrow from Foucault).