Next Sunday, Japan goes to the polls. Junichiro Koizumi, the prime minister, called an early election ' an unusual move in a compromise-loving country where politicians paper over differences and keep governments going. But it is typical of this untypical Japanese who has a lot of hair for his age (63) and keeps it tousled. He recently danced a tango with Richard Gere and joined Tom Cruise in singing an Elvis Presley song.
He was the first postwar prime minister who had the courage to go and pray at the Yakusuni shrine for the Japanese war dead, including General Hideki Tojo, prime minister in World War II, and 13 others whom the Allies convicted as war criminals. The temple was originally founded to commemorate the victims of a civil war in 1868-69 that ended the rule of the Shoguns and restored the power of the emperor. As Japan fought other wars, those who died in them were added to the pantheon. Yakusuni means the peaceful country. The Japanese believe that when people die, they become gods, and live in a tranquil place within sight of their descendants; the living go to Yakusuni to pay homage to their dead ancestors and relatives. The names of 2' million little gods are recorded at the shrine. When Koizumi went to Yakusuni in 2001, 700 people filed suits charging him with breach of the Japanese constitution (adopted when General MacArthur ruled a defeated Japan, it prohibits Japan from waging war). And yet, this supposedly chauvinistic prime minister is an admirer of Winston Churchill who fought Japan.
For a politician (he has been an undefeated member of parliament since 1972), Koizumi has a strange taste for learning. One of the maxims he treasures is that of a 19th-century Confucian scholar: 'One who studies in youth will accomplish things in maturity. One who studies in maturity will not become feeble in old age. One who studies in old age will not decay with death.'
The election was precipitated by a rejection in Japan's upper house of a bill to privatize Japan Post, Japan's post office bank. Japanese politicians disliked its privatization for the same reason as Indian politicians: the government bank was the source of lucrative patronage. It lent to politicians' nominees, and financed infrastructure projects whose contracts went to politicians' favourites, with material returns flowing back.
The post office started taking deposits soon after it was started in 1871. It was the common man's bank; in those days, one could set up an account with an initial deposit of a fiftieth of a yen. The Japanese, like Indian savers, are extremely timid. They love their post office savings bank because they think it cannot fail. As a result, the post office holds a third of the country's personal savings ' $3.1 trillion, or five times India's GDP. A third of Japan's life insurance funds are invested in it.
After World War II, Japan set up factories using the latest technology, kept the yen low, and achieved the world's lowest costs in industry after industry. When the oil crisis struck in the early 1970s, Japan was the most energy-efficient country in the world; in the next ten years, the Japanese increased their energy efficiency by a third. With sustained low-cost production, they kept a boom going for almost forty years. At its end, they were rich, and their economy emerged the world's third largest.
But by the 1980s, their payments surpluses were so huge that they found it difficult to find investments abroad. They bought up and financed much urban real estate. Once they owned Rockefeller Plaza, the most expensive property in New York. When I went to Melbourne in 1989, its entire city centre was owned by Japanese banks ' and most of it was empty for want of tenants. The Japanese lost much money on their investments abroad.
Their technology-driven boom also came to an end when they reached the frontier of world technology. There was no one left to imitate. They did not lack inventiveness. In Osaka, I was once waiting for a local train. When it arrived, I saw a child sitting in the driver's seat. A bit dismayed, I entered and walked up to the front of the train. It had no driver; it was fully automatic.
But even such spectacular innovations could not keep up growth; by the end of the 1990s, production was declining. To revive it, the Japanese government tried out classical Keynesian solutions. It reduced interest rates to close to zero; but investment failed to revive. So it started itself to invest in infrastructure. On that trip, I found that the government was scooping out an entire mountain and dumping it into the sea to create a new port. Such profligacy has left Japan with a debt that is one-and-a-half times its GDP ' twice India's proportion, and India is pretty bankrupt itself.
Such huge infrastructure pro-jects were funded by Japan Post. But they did not bring any returns; there was no income to pay interest. The only people it enriched were borrowers, contractors and their political patrons. It was a racket, which Koizumi is determined to end. But by doing so, he has not only thrown a gauntlet to the politicians. He has also antagonized government servants. The post office employs 262,000 workers ' a third of bureaucracy. Even Japan's army is smaller ' only 239,000 men. Those post office workers are often the closest friends of people living in aging rural communities; so they can influence a lot of votes. They have traditionally helped Liberal Democratic Party ' Koizumi's party ' but may not do so this time.
Koizumi is unpopular amongst the old guard of his Liberal Democratic Party. He has thrown out those who voted against his post office bill, and put up unconventional candidates against them ' amongst them, a number of women in a male-dominated country. The most famous is Koizumi's comely environment minister, Yuriko Koike, who was a reporter in the 1990 Iraq war and amongst whose books is one entitled Climbing the Pyramid in a Kimono. About his transport minister, the former film actress Chikage Ogi, Koizumi once said, 'Her voice carries very well.' He has put up Makiko Fujino, author of many cookbooks, Satsuki Katayama, a former model who became a budget examiner in the finance ministry, and Kuniko Inoguchi, a Sophia University professor who represented Japan in the UN Disarmament Conference. One of the candidates running in support of Koizumi is a businessman named Takafumi Horie. He dropped out of school, but today is the millionaire owner of an Internet company called Livedoor. Even his failures are sensational. He made a bid for Fuji Television. He would buy its shares during off-hours; his rising stake was watched by millions. He failed, but managed to work out a partnership between his firms and Fuji Television.
Koizumi has split the LDP, the faction-ridden coalition that has ruled Japan since the war. That does not bode well. But polls suggest strong popular support for him. I hope he will win, for without him, Japan would be a terribly dull place.