LONDON -- I was invited recently to Japan to speak to two Japanese audiences about the Japanese economy as seen from London and what should be done to ensure Japanese economic recovery. I prepared a speech that was pessimistic. This was inevitable as British reporting on the Japanese economy is full of doom and gloom as is much of the Japanese press. I added some personal notes, such as that the Japanese had gone too far in their loss of self-confidence.
I reiterated my long-held belief that Japanese economic recovery is, to a significant extent, dependent on political reform in Japan. By reform, I mean essentially the undermining of the power of factions and interest groups in the ruling party through a real attempt to equalize the votes in rural and urban constituencies, significant curbs on money politics and a political realignment that ensures effective opposition in Japan.
The Liberal Democratic Party, which has controlled the government for more than half a century, is neither "liberal," in the generally accepted definition of this word, nor really "democratic" in its structure, despite the apparently democratic way in which its president is elected. Certainly ordinary Japanese vote for the party because there is no effective alternative. The LDP is not a party with an accepted ideology. It is essentially a grouping of factions where loyalty is more to personalities than to principles, and where control of political funding is the key to advancement.