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The Wrath of Kan

Can this man clean up Japan's mess?

Should Finance Minister Naoto Kan become Japan's next prime minister on Friday, as most observers predict, it won't be the first time he will have shouldered the responsibility for cleaning up after Yukio Hatoyama. Kan succeeded him as party chairman back in 2002, when Hatoyama resigned over talks he had held with the rival party. Now, Kan seems to be swooping in again in the wake of Hatoyama's sudden resignation, hoping to limit the damage from the outgoing prime minister's disastrous nine months in power. Then as now, Kan boasts more experience in government than his predecessor and a style that could hardly be more different. His hot temper and self-made expertise might be just what Japan needs if it hopes to keep a prime minister for a period of longer than a few months.

Japan urgently needs a strong leader. Less than a year after Hatoyama and his Democratic Party of Japan (DPJ) swept away half a century of nearly unbroken rule by the Liberal Democratic Party (LDP) in September, their coalition today looks frayed and tired. Hatoyama got bogged down in a disagreement with the United States over where to relocate Futenma, a strategically important U.S. Marine air base on Okinawa. In late May, after months of painful public dithering, he finally signed on to a 2006 agreement hammered out by the previous LDP government -- which provoked a revolt in his governing coalition and deep shock among an unprepared public. With his party in disarray and an approval rating headed for the single digits, Hatoyama resigned Wednesday, along with the DPJ's powerful party secretary, Ichiro Ozawa.

Enter Kan. He is a figure already well known to investors and analysts as the fiscal conservative who has spent the last six months trying to relieve Japan's stifling debt burden (roughly 200 percent of GDP) and reinvigorate a stagnant economy. While he has actively called for Japan to follow the path of fiscal responsibility, and pointed ominously to Greece as a direction Japan might follow if his reforms are not implemented, his short time as finance minister has not seen considerable progress in this direction.

Kan is also known as a pacifist in line with Japan's old left tradition. While serving in the Japanese legislature, he advocated a greater role for the Japanese military under the banner of the United Nations and opposed sending the country's troops to Iraq, as the United States has hoped Japan would. After meeting with Japan's then-Prime Minister Junichiro Koizumi in 2003, he commented, "The decision to send troops to Iraq is based on a fundamental miscalculation." Still, unlike Hatoyama, Kan is unlikely to fumble matters of foreign policy and relations with the country's most important ally, having watched and learned from the Futenma debacle.

Kan's upbringing could be a key asset. Hatoyama's entry into politics was lubricated by family connections (his father was also prime minister). Kan, on the other hand, is a rarity for Japanese politicians -- a self-made man. His path to power was neither direct nor easy. An aspiring scientist in his youth, Kan majored in physics at the Tokyo Institute of Technology and opened his own patent office in 1974. He made his political debut shortly thereafter as a civic activist and entered the Japanese parliament in 1980 as a member of the lower house. It was after exposing a massive scandal, however, that Kan truly burst onto the national scene in the 1990s, as health minister in the LDP government. HIV-tainted blood was entering the country's blood supply, and the government had been covering it up. Kan exposed the details to public acclaim.

But Kan soon faced his own series of scandals. In 1998, he resigned his post after his affair with a television newscaster went public and he simultaneously admitted that he had failed to pay into the national pension fund. Just five years later, Kan was forced to resign from his leadership of the DPJ over another failure to pay. This time, Kan made formal penance: He shaved his head, put on a Buddhist monk's robes, and traveled to the traditional pilgrimage destination of Shikoku island and its 88 temples. It worked. Japan's comeback kid, he remained a senior figure inside the DPJ and served as deputy prime minister and finance minister in the Hatoyama cabinet.

Behind the scenes in Tokyo, he is known as "Ira-Kan" or "Irritable Kan" for his quick temper (cue the Wrath of Khan jokes). He has also cultivated a reputation as a serious policymaker with a popular touch and has built good relationships with politicians both within the DPJ and across a broad ideological and geographical spectrum.

How did Kan manage to survive? Even amid the scandals, he projected an image of probity and sincerity. As China's People's Daily put it, "In an era of bureaucrats and back room dealings, Kan's transparent politics were completely unprecedented and his honesty was enthusiastically praised by the public and the media." That jives well with the sentiment that brought the DPJ to power in the first place -- a vow to take power back from unelected bureaucrats and shake up Japan's stultified politics.

Hatoyama made little headway on this reform agenda. But a Prime Minister Kan would require less on-the-job training, allowing him to avoid his predecessor's rookie mistakes and take on entrenched interests within the bureaucracy, while navigating the divides within his own party.

He'll need all the political savvy and strength he can muster. With the loss of its two most prominent leaders, Hatoyama and Ozawa (the real force behind the party's successful rise to power), the DPJ is in turmoil. The party's junior lawmakers -- who were largely sidelined for the past nine months -- are hungry to wield more authority in the next administration. Kan is no acolyte of Ozawa's, but he is one of the party's founders and is still a member of the old guard. The other probable contenders for prime minister -- which include Foreign Minister Katsuya Okada, Transport Minister Seiji Maehara, and chairman of the lower house's environment committee Shinji Tarutoko -- carry the banner of an eager, younger DPJ generation that is dissatisfied with the old guard's penchant for backroom negotiations. Kan is likely to prevail in the short term, but he will be harried by the next generation of lawmakers after a July upper-house election that is looking disastrous for the DPJ, and certainly at the party's September conclave.

Ozawa's fall will also pose a more direct challenge to Kan's leadership. In resigning, Ozawa has freed the DPJ of its biggest public relations albatross -- he has been accused of accepting questionable campaign donations. But his departure is also a huge loss, as Ozawa's almost mythic power within the party served as a unifying force. Since taking control of the DPJ, Ozawa has relentlessly pursued the destruction of the LDP (his former party) and would use his clout and his political genius to cultivate and aid loyal candidates. Many saw Ozawa as the only man who could lead the DPJ out of the wilderness to power, and his success in 2009 only solidified this reputation. It would be naive to think that Ozawa's exit is complete, given that his loyal lieutenants will continue to wield significant power. Still, without his commanding presence, today's DPJ looks like an uneasy amalgam of aging former socialists, young pragmatists, and refugees from the LDP.

Then there is the job of actually running Japan. As prime minister, Kan will likely move to trim government spending -- no easy task, as he has surely learned in the finance ministry. With Japan's population aging rapidly, social outlays for health care and pensions are set to increase, and Kan might be tempted to make his cuts from Japan's defense budget. But that looks harder to justify after North Korea's sinking of the South Korean corvette Cheonan and the growing military assertiveness of China, which conducted a provocative naval exercise near Japan this spring.

And then there's Futenma, the U.S. base issue that unseated Hatoyama. Although the U.S.-Japan joint statement issued on May 27 defused bilateral tensions for the short term, the game is far from over in Japan. After the July election, the DPJ will have to persuade the Social Democratic Party -- which bolted from the ruling coalition after Hatoyama signed the base agreement with the Americans -- to rejoin the government. Okinawans will likely seek to foil any attempt by Tokyo to actually implement the Futenma deal, and the United States exhibits no willingness to reopen negotiations. Hatoyama's hasty exit has vividly demonstrated that the Japanese still judge their leaders in part on their ability to successfully manage the alliance.

Tough as the coming months may be, Hatoyama's and Ozawa's departures herald the end of the beginning in Japan's political transformation. In fact, these resignations are a sign that the change heralded by the DPJ's rise to power is continuing. It was the failure to live up to the DPJ's promises that caused Hatoyama to resign -- not the DPJ's reform agenda itself.

Still, don't bet on political stability in Tokyo. Of Japan's 13 prime ministers since 1991, only three have lasted more than two years. Kan might be of a different breed, but the hostile environment he faces is essentially unchanged. So unless something unexpected happens, get used to more resignations and more new prime ministers.

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Tarnishing the Iron Lady of Africa

Ellen Johnson Sirleaf may be the best president Liberia has ever had. But now even she faces criticism for failing to crack down on corruption.

MONROVIA—Drive through Liberia's capital today and one of the first things you notice are the clusters of new construction developments dotting the city, including some extravagant-looking concrete mansions. Just seven years ago, Monrovia's walls were riddled with bullets, parts of the town flattened in a rebel assault that forced out the country's infamous dictator, Charles Taylor. By the time he left office for exile in Nigeria, Liberia had seen 14 years of conflict, and an estimated quarter of a million people had been killed -- a significant cut of the country's population which is today just 3.8 million.

But these days, Africa's oldest republic is a darling of the donor community. And many believe the country's president, Ellen Johnson Sirleaf, deserves most of the credit for the dramatic change. Sirleaf, the first female head of state ever elected in Africa, has won international adulation for stabilizing Liberia's political economy and admiration from, among others, U.S. Secretary of State Hillary Clinton. A former senior World Bank official, the Liberian president has persuaded the United Nations to drop sanctions on Liberia's lucrative diamond and timber sectors, won IMF support for canceling the last of the country's $4.9 billion external debt and increased the size of the national budget from $80 million in 2005 to $350 million today. Roads have been repaired in parts of the country and electricity restored to parts of Monrovia.

That's the good news -- and good it is, particularly given the starting point. But in recent months, Sirleaf's untouchable image as the "Iron Lady," a moniker she earned during her hard years in opposition, has begun to tarnish around the edges. Critics, including members of her own government, have accused her of doing too little to tackle the country's rampant corruption; Liberia's Truth and Reconciliation Commission recommended that she be barred from public office for 30 years due to her fleeting support for Taylor, now facing war crimes charges in The Hague; and she has decided to stand for a second term despite having vowed not to when she first took office. These are far from the worst accusations one can imagine in a post-conflict state, but they have weighed on her reputation nonetheless.

Sirleaf is the first to admit that her promise of a "zero tolerance" approach on corruption, arguably Liberia's biggest problem, was cut short by the political exigencies of winning support for her initial package of economic reforms. "The agenda before the legislature is so large that I needed to calculate where I put my weight. I have to cut my losses," she said in an interview with FP. She feared a legislative rebellion against her broader reform agenda if she tried to push through a number of anti-corruption laws too early on, she said. That's one reason the 71-year-old Sirleaf has said she will need a second term: so she can finish the job of cleaning up government.

Sirleaf is certainly fighting an uphill battle; corruption has deep historical roots in Liberia, tracing all the way back to the republic's founding. When the families of freed American slaves who returned to the continent to found Liberia in the 19th century failed to establish coherent governance, politics took its cues from other influences: the shady freemasonic lodges of the Americo-Liberian settlers and indigenous secret societies. Patronage and connections took precedence over procedure. And although those elite families saw their hegemony crumble when Samuel Doe seized power in 1980 in the wake of food riots, the old habits persisted and grew. Taylor's rebellion ousted Doe, and in so doing destroyed much of the remaining fabric of Liberia's government institutions. Then, Taylor's presidency became a case study in kleptocracy and warlordism. By political necessity, the transitional government that followed, preceeding Sirleaf's administration, was made up by many of those who made money during the Doe and Taylor years. Even some members of Sirleaf's government retains shady figures from the past.

The effect is evident. In recent months, Sirleaf has had to sack a number of ministers amid a wave of scandals. Her justice minister was fired for soft-pedaling an important corruption case; her information minister was suspended this year for pocketing the salaries of fictional employees; and her minister of the interior (who is also her brother) was also recently forced to stand down over the disappearance of county development funds. Five ministries, including finance and mines, have now been put under the spotlight by auditor general reports highlighting the disappearance of millions of dollars of public funds. Aside from the most visible offenders, diplomats also point out that a number of political untouchables have burrowed into the bureaucracy, many of them from Americo-Liberian elite families.

Sirleaf's defenders say the president is doing her best to keep her government clean, evidenced, for example, by the public sackings and her support for the audits exposing corruption. "We always knew there was a monster sitting in the dark room for years, with feces everywhere," says Augustine Ngafuan, Liberia's finance minister. "But now the lights have been switched on by the audit, people are confused and think the mess has been created today."

Critics, however, say she is being selective with how she tackles corruption. One oft-cited example is a former public works minister, Luseni Donzo, who was removed for mismanaging public contracts -- and then given as a job as a presidential advisor. Sirleaf's sister and brother-in-law are also top advisors, and her son is the director of the national security agency. Finance ministry insiders said in interviews that 40 percent of the national budget is spent on government salaries, ministerial costs, and perks --  high-profile officials can earn over $15,000 a month in salary payments. Some of the extravagant mansions that have sprung up in Monrovia's new found construction boom belong to well-connected political figures.

Frances Johnson Morris, the head of Liberia's anti-corruption agency, which has struggled to prosecute many high-profile cases, says there are "some merits in the public perception that not enough is being done on corruption." Due to a lack of resources, a condition that afflicts most programs in Liberia, Morris spends the majority of her time on public awareness campaigns.

Vowing to finish the job if she wins her re-election bid, Sirleaf is now expanding her political base. She won less than 20 percent of the vote in the first round back in 2005, defeating the soccer star George Weah in a hotly contested second round of voting. This time around, she is making sure there is not a similarly close repeat. She recently merged her Unity Party with two other parties, though her detractors say she unduly pandered to elite families to pull off the new coalition.

Sirleaf has also come under fire from the country's Truth and Reconciliation commission, which last year published a report advocating she resign the presidency for her role in supporting Taylor's rebellion. She has publicly apologized for her association with Taylor, but many Liberians still feel that her past makes her part of the problem rather than the country's salvation. "My fear is that those who have shaped the politics of this country continue to play an active role, there will be a vicious circle of bad governance, corruption and human rights violations," says Jerome Verdier, the chairman of the commission.

All this comes as the United Nations, which currently has just over 8,000 peacekeeping troops in the country, is assessing whether to draw down its mission or stay on and bolster what many observers expect will be a second term in office for Sirleaf. Worryingly, a potential drawdown coincides with evidence -- now circulating in diplomatic circles -- that Liberia, like its neighbors in West Africa, could become a host for narco-trafficking with rogue members of the security services complicit. U.S. officials are said to be monitoring this closely.  

Yet even with these worries, Sirleaf still has a lot going for her. She has the support and goodwill of the donor and diplomatic community, which wants to see her win a second term in office. Liberians will be hoping that she can use a second term to impose state authority, make government work for the people, and free the country from the shackles of its past. Because in spite of the recent criticism leveled at her, Sirleaf is arguably the best president Liberia has ever had.

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