TOKYO -- Japan's parliament elected Keizo Obuchi, a colorless career politician, yesterday as the country's 84th prime minister and the sixth since President Clinton took office.
But a challenge by opposition parties signaled that his tenure and his influence on Japan's staggering economy may be short-lived.
Obuchi's ascension was never in doubt after the ruling Liberal Democratic Party chose him as its leader last week. But his victory in the Diet, Japan's parliament, was delayed about four hours when opposition members of the upper house picked Naoto Kan, the leader of the opposition Democratic Party, to lead the nation.
"I see this as a shot across the bow of the LDP," said Brian Rose, senior economist at Warburg, Dillon Reed, a brokerage and investment bank here. "For all the talk that the opposition is in chaos, there really isn't that much chaos. Maybe the day when Kan becomes prime minister isn't that far away."
Because the lower house is more powerful, the LDP was able to anoint Obuchi prime minister. But the unified opposition from right-wing parties, moderates and the Communist left, although symbolic, indicates that the Liberal Democrats may need to make significant compromises with opposing parties in order to pass legislation to lift the nation from its worst recession since World War II and clean up bad bank loans that could total $1 trillion.
The composition of the new prime minister's Cabinet suggests that a bold attack on Japan's economic problems isn't likely soon. Obuchi, 61, unveiled a Cabinet notable mostly for its balance among warring LDP factions, for its cumulative age -- an average of 60 -- and for his selection of Seiko Noda, 37, as the youngest person ever appointed to a postwar Cabinet. She will serve as minister of posts and telecommunications.
As expected, Obuchi gave the most important post, that of finance minister, to Kiichi Miyazawa, 78, a former prime minister who was forced out of office five years ago in a political fund-raising scandal. Miyazawa didn't want the job and is not expected to push for the kind of rapid and painful measures many foreigners believe are necessary to correct Japan's huge debt problem.
As finance minister in the late 1980s, Miyazawa assisted the growth of Japan's speculative "bubble economy," from which the country's banks are still reeling. And as prime minister between 1991 and 1993, he failed to address the problems generated by the bubble's collapse.
Two schools of thought have emerged on how to address Japan's economic turmoil.
"Hard landing" advocates, as they are dubbed, want to see banks closed, unneeded workers fired and overpriced land sold so the nation can start afresh, much the way America cleaned up its savings and loan debacle.
But many Japanese prefer a "soft landing," arguing that the nation's huge pool of private savings and slender interest rates -- now 0.025 percent -- allow bad loans to be kept on the books of the nation's banks indefinitely, or at least until the economy recovers. Meanwhile, government money would be injected to keep the troubled banks afloat.
Miyazawa and Obuchi clearly fall into the "soft landing" camp, analysts said. The new prime minister was quoted as telling Miyazawa on Wednesday: "I don't think a hard landing is a good idea."
Obuchi succeeds party colleague Ryutaro Hashimoto, who resigned after a painful defeat July 12 in upper house elections, the same upper house that voted against Obuchi yesterday.
Pub Date: 7/31/98