Vowing to Rebuild from Scratch

Thunderous applause and shouts of "Banzai!" rang through the plush Tokyo headquarters of Japan's ruling Liberal Democratic Party last week as Takeo Fukuda, 71, was unanimously chosen party president. Just minutes earlier, a grim-faced Takeo Miki, Japan's incumbent Premier, had received nearly as tumultuous an ovation when he bowed out as head of the party. The script was replayed the following day in the Diet's lower house; this time Miki resigned as Premier and Fukuda, with the L.D.P. controlling a bare majority of seats in the chamber, again succeeded him, becoming Japan's 13th postwar head of government.

Thus ended more than a year of the worst political wrangling in Japan's modern history. In fact the L.D.P. emerged so battered that Fukuda last week vowed to "rebuild the party from scratch, and [I] will stake my political life on accomplishing it." The leader of the L.D.P's largest faction, whose intellect had won him plum jobs in the Ministry of Finance before he turned to politics in 1952, has probably done exactly that. But as a man with a reputation for tenacity as well as ambition, Fukuda, a longtime power broker in the party, has always felt that "a day is bound to come when Japan will need me."

The smooth transition of power from Miki to Fukuda was greeted by L.D.P. leaders and their powerful business allies with a collective sigh of relief. Until last week there were fears that Miki would oppose Fukuda's candidacy and possibly lead his 42-man faction out of the party. But Miki quit without a fight when it became apparent that the party was united against him.

Succeeding Kakuei Tanaka in 1974, Miki had earned his colleagues' enmity by demanding a full, open investigation of the Lockheed scandal, even though it meant exposing the corruption of leading L.D.P. members. He was also widely blamed for the party's setback in last month's elections for the Diet's 511-seat lower house, in which L.D.P. strength dropped to 249 representatives--a loss of 16 (TIME, Dec. 20). In order to continue governing, the L.D.P. has had to co-opt a dozen conservative representatives who ran as independents in the election with Liberal Democratic backing.

That thin margin in the lower house will not allow Fukuda a luxury enjoyed by his predecessors: governing while ignoring the opposition. At a press conference last week, Fukuda stated: "I intend to work up a full dialogue with the opposition parties." University of Tokyo Political Scientist Shinkichi Eto only half jokingly muses that if "I were Fukuda, I'd be taking the opposition leaders to some nice quiet geisha house in Akasaka."

Aging Godfathers. Fukuda's biggest effort will be to rejuvenate his broad-based, pro-American, free-enterprise party, which has governed Japan continuously since 1955. As a first step toward a comeback, Fukuda intends to name a committee to study party reform. One problem it will surely discuss is how to curb the clout of the half-dozen major factions--led by aging, godfather-like powerbrokers--that have traditionally controlled the L.D.P. Fukuda has promised to dissolve his own 78-man bloc as an example to others. Yet his first appointments to top party and Cabinet posts last week seemed carefully deferential to factional interests. Scoffs Yohei Kono, a former L.D.P. member who now heads a bloc of 18 conservalive lower house representatives: "Nobody believes that Fukuda will be able to dramatically change the system in his party."

The most pressing national problem confronting the new Premier is the lackluster performance of the once robust Japanese economy. In the third quarter of 1976, Japan's gross national product limped ahead at the annual rate of 1.3% (compared with 3.8% in the U.S.). In other years, Japan could hope to spark its economy by increasing exports. But both U.S. businessmen and the European Community have complained that underpriced Japanese goods are already flooding their markets (see ECONOMY & BUSINESS). They demand that Tokyo sell less and import more. As a former Finance Minister and one of his country's leading economics experts, Fukuda is expected to increase government spending and provide businesses with low-interest loans.

Sizing Up Carter. In foreign affairs, the new Premier confronts both a Moscow that is still seething because Tokyo allowed the U.S. to dismantle and examine the MiG-25 that a defecting Soviet airman flew to Japan in September, and a Peking miffed because negotiations for a Japanese-Chinese peace treaty have bogged down. It is unlikely, however, that Fukuda will take any new foreign policy initiatives until he has had the chance to size up the diplomacy of Jimmy Carter's Administration.

The first popular test of Fukuda's policies and of whether he has revived the L.D.P. will come in July, when the Japanese elect a new upper house. The L.D.P. majority there is now a razor-thin one seat, and the party may lose control--unless Fukuda by his actions regains some of that faded popularity.

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