Japan wins a promising PM
Sep 26, 2008
Print this article
Taro Aso: a gruff straight-talker
Elected on Monday as president of the ruling Liberal Democratic Party, Taro Aso, 68, has become Japan's third Prime Minister in as many years. The key challenge for this hawkish, Manga-cartoon fanatic – which may determine if he can stay in post for longer than his predecessor Yasuo Fukuda's 365 days – is the state of the Japanese economy.
Aso wants to cut taxes and raise government spending via a new economic stimulus package. But, "with government debt already at 180% of GDP, there is a limit to how much fiscal stimulus can be applied to the economy", says Ashley Davies, a currency strategist at UBS AG in Singapore. So it's unlikely that he can do anything in the short term.
To add to his woes, as a gaffe-prone member of Japan's elite (he's made disparaging remarks about Korea and Alzheimer's sufferers, while his grandfather was a post-war prime minister), Aso may have trouble persuading voters struggling with high prices that he can feel their pain, says Kosuke Takahashi in the Asian Times. Yet after travelling the country, Aso says he "got the sense that times are tough for many people" and wants to tackle the underlying problems.
And "unlike the bland Fukuda and inexperienced Abe, Aso is a gruff straight-talker...who can rattle off statistics and fields questions from non-Japanese reporters in English", says Kenhi Hall in Business Week. If anyone can get Japan out of it's current rut, Aso can.
FREE - MoneyWeek's daily investment email
Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.
Sign up FREE to Money Morning here.