Koizumi promises economic shakeup

Koizumi's programme is heavy on reform rhetoric

Japan's prime minister is banking on his fragile reform credentials to carry his government through a snap election next month.

In a policy platform for the poll launched on Tuesday, Junichiro Koizumi promised 3 million new jobs by 2005.

He also aimed for 2% economic growth in 2006 and a halving of the bad debt burden crippling Japan's banks.

Many of the reforms repeat pledges made when he became premier in 2001, but have since run into the sand.

Mr Koizumi has faced repeated opposition from within his Liberal Democratic Party to his more extreme plans to shake up the struggling economy.

The LDP is riddled with factions who rely on industries which might face closures or financial pain from reform for election funding.

But Mr Koizumi said all the party's MPs would be backing the platform, a new development in a political system where MPs have traditionally rewritten party policy to match local biases.

Privatisation

Among the promises that have been stalled for two years but now feature heavily are plans to sell off the postal savings system, whose trillions of yen in deposits have acted as vital investment seed capital for Japan's bureaucrats.

That is scheduled for 2007, two years after the planned sell-off of the heavily-indebted Highway Agency.

Japanese voters are unlikely to vote Mr Koizumi out of office, since the LDP has been in power for all but a handful of the past 48 years.

But the strength of his mandate from voters worried about stubbornly high unemployment, stagnant growth and a worryingly strong yen may dictate whether he will have to continue giving in to the anti-reform factions in the party.