Japan s new PM to boost economy

September 29, 2008

, TOKYO, September 29 – Japan\’s new Prime Minister Taro Aso, off to a rocky start after a minister quit just days into the job, sought Monday to get back on track with crisis funding to revive Asia\’s largest economy.

Aso\’s cabinet, which took office last week, approved 17 billion dollars in emergency funding to help consumers, companies and farmers cope with high fuel costs and Wall Street\’s meltdown.

A champion of government spending to boost the economy, he was expected to outline his economic priorities in a policy speech to parliament — customary for a new prime minister — at 0500 GMT.

Japan is teetering on recession, and the 1.81-trillion-yen budget approved by cabinet Monday is part of an 11.7-trillion-yen emergency package announced by Aso\’s predecessor Yasuo Fukuda in late August.

But Aso can expect a tough battle with the opposition, which controls one house of parliament and scored an easy first blow when his transport minister quit Sunday over a series of controversial statements.

The opposition says it wants discussions with the government on the extra budget, which some economists argue is too small to boost the world\’s second largest economy, threatening a difficult passage through parliament.

Aso has vowed to make the emergency economic measures his first priority, and hinted he would call snap general elections if the budget gets too bogged down.

But Chief Cabinet Secretary Takeo Kawamura, spokesman for Aso\’s government, insisted the prime minister would not call general elections without at least starting debate on the budget.

"Our biggest task is to tackle this immediate issue. That stance has never changed," Kawamura told reporters.

Hiroyuki Hosoda, secretary general of the ruling Liberal Democratic Party (LDP), declined to tie snap elections to Sunday\’s resignation of the transport minister.

"There is no direct impact," Hosoda said.

Kazuo Kitagawa, who is secretary general of the LDP\’s coalition partner New Komeito, said he wanted elections soon. "We have to ask for the people\’s voice as soon as possible."

The prime minister does not need to call general elections until September next year. But lawmakers in the LDP, which has led Japan almost continuously since 1955, have hoped to benefit from having a new premier.

The Aso government\’s initial approval ratings, however, were less than 50 percent — a big jump from those for his beleaguered predecessor Fukuda, but below what some LDP strategists had wanted.

The lukewarm poll ratings came even before the furore over comments by the short-serving transport minister, Nariaki Nakayama.

Nakayama, who like Aso is known for nationalist views, said that Japan is "homogenous" — a comment which offended the country\’s indigenous Ainu people, who have historically faced discrimination.

He also pledged to destroy the left-leaning teachers union, calling them a "cancer," and accused farmers whose land was forcibly purchased for airport construction of "making profits by whining."

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