In good times, Japan does not need political leadership. The civil service makes everything work. But Japan is in economic crisis, trying to get out of recession and regain prosperity so Japanese can buy imports and mute American criticism. Japan is facing a run by world money managers from a weak dollar into a stronger yen, making Japanese products expensive to export. Unless action is taken and confidence regained, Japan's recovery will halt. For that, the Japanese do need a government. Unhappily, the long-term result of last July's election is that they do not have one and are not likely to get a decisive regime soon.
If he is not replaced immediately, Tsutomu Hata as caretaker prime minister will represent Japan at the Group of Seven industrial powers summit in Naples on July 8. He would hardly be in a position to deal with European and North American governments, or to make lasting commitments on opening Japan's markets. Just one year ago, Prime Minister Kiichi Miyazawa served as host of the G-7 summit in Tokyo after his government had fallen. It was not a productive meeting.
That crisis brought about an election which kicked the Liberal Democrats out of power after 38 years, despite winning the largest bloc of deputies. The coalition that emerged under Morihiro Hosokawa embarked on electoral and ethical reform until an old scandal forced his resignation after eight months. With the Socialists out of the surviving coalition, Mr. Hata headed a minority government. He resigned on Saturday rather than lose a confidence vote which would have precipitated another election.
Now Japan is awaiting three-way negotiations between the Liberal Democrats, the opposition Socialists and the outgoing coalition of reform-minded Liberal Democratic defectors. All three groups are faction-ridden. Mr. Hata may be hoping to return as prime minister of a stronger coalition, but this is not assured.
For the moment, Japan's paralysis prevents it from acting constructively on the diplomatic front to bring North Korea back into nuclear non-proliferation compliance. This will be hard even after a new government is formed if the Socialists are in it. Japan's Socialist Party is traditionally sympathetic to North Korea.
The fall of the Hata government reduces the likelihood of U.S.-Japanese agreements to open Japan's markets to foreign insurance, autos, telecommunications and medical equipment before the G-7 meeting. The next prime minister will be the fourth trying to implement the trade framework agreement that was hatched a year ago. Japan's political paralysis is bad news that will not go away.