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Chapter Four
Period of President Ikeda's Leadership

Following Prime Minister Kishi's resignation, Hayato Ikeda was selected to be the LDP's 4th Party President on July 14, 1960 and formed a new cabinet. He did so just as Japan was entering into a "Period of Prosperity" the likes of which the world had never seen before.

Prime Minister Ikeda's administration was characterized by "dialog politics" (hanashiai no seiji) and "party modernization" (to kindaika) conducted in the spirit of "tolerance and patience" (kanyo to nintai). Its policies were centered on the active promotion of economic growth prominently symbolized by the "Income Doubling Plan" and efforts to move the economy in the direction of greater international openness.

Mindful of the fact that the recent turmoil surrounding the Japan-U.S. Security Treaty had not only caused considerable anxiety within Japan, but had also resulted in the loss of the country's credibility abroad, Prime Minister Ikeda was careful to conduct politics with due "tolerance and patience." Most notably, he took great care to engage opposition parties in close dialog so as to ensure the smooth operation of proceedings in the Diet. As a result of his efforts, politics during the four years and three months of the Ikeda Cabinet were remarkably stable and almost completely free of disruptive conflicts with opposition parties.

During this period, Japan was blessed with plentiful and highly-skilled labor, made substantial progress in technological innovation, and was able to take advantage of stable, cheap international prices for essential resources. When coupled with the overflowing vitality of the Japanese people in general, conditions for growth during the "Golden Sixties" (Ogon no Rokuju Nendai) were ideal. The Ikeda administration and the LDP fully understood the significance of these developments and were able to formulate effective policies that further spurred rapid economic growth.

The "Income Doubling Plan" was undertaken with an outlook even more far-sighted than that of the Kishi Cabinet's "New Long-term Economic Plan." Economic goals were set to more than double Japan's gross national product in the course of the next decade and bring Japanese standards of living up to levels comparable to those found in many advanced Western countries. These ambitious measures were designed not only to fulfill long-held public aspirations for full employment, but also to address the issue of income disparity among different classes in Japanese society.

As the result of efforts to promote economic development based upon the three pillars of (1) tax cuts, (2) social security, and (3) public investment, latent energy within the private sector was skillfully activated and "miraculously" high rates of growth were achieved. Although Ikeda's plan had envisioned a growth rate of 9 percent per year for the first three years, actual results exceeded this as the economy expanded at a rate of 10 percent. Finally, the target of doubling levels of personal income was reached in a little over four years instead of the ten-year period that originally had been thought would be necessary.

As standards of living steadily improved and the public became increasingly satisfied, the sort of bitter political confrontations that had plagued the Kishi administration completely disappeared. Continued political stability and policy successes increased popular support for the LDP such that it was able in the general election held in November of 1960 to capture a postwar record number of 301 seats (including those elected to fill vacancies). The Party also scored a decisive victory in the House of Councillors Election of July, 1962, winning 21 seats in the national district and 48 in regional districts for a total of 69.

With such strong support in both chambers of the Diet, the Ikeda administration was able to accomplish great things both at home and abroad.

Domestically, it took advantage of Japan's phenomenal economic growth to expand national and local government budgets and actively promote important policies at the regional level, even as it continued to substantially reduce taxes.

In addition, four important laws that embodied fundamental policies for several primary industries were implemented - the "Basic Law for Agriculture" (Nogyo Kihon-ho), "Basic Law for Small and Medium-sized Enterprises" (Chusho Kigyo Kihon-ho), "Law for the Promotion of Coastal Fisheries" (Engan Gyogyo Shinko-ho), and the "Basic Law for Forestry" (Ringyo Kihon-ho). Additional important accomplishments included the "New Law for Rivers" (Shin Kasen-ho), and the "Law for the Promotion of New Industrial Cities" (Shin Sangyo Toshi Kensetsu Sokushin-ho) that, along with various other important legislation, supported land development and conservation and contributed to efforts to alleviate regional disparities in Japan. Finally, the Ikeda administration's achievements in promoting public welfare and education through the enactment of the "Child Rearing Allowance Law" (Jido Fuyo Teate-ho), "Law for the Welfare of the Elderly" (Rojin Fukushi-ho), "Law for the Welfare of Mothers and Children" (Boshi Fukushi-ho), "Law Concerning Measures for the Free Provision of Textbooks for Compulsory Education" (Gimu Kyoiku Shogakko Kyokasho Musho Sochi-ho), and "Universal Health Insurance" (Kokumin Kai Hoken) were similarly impressive.

Prime Minister Ikeda also made great efforts to improve understanding and build friendly relations between Japan and other countries. During a three-year period beginning in 1961, he traveled abroad extensively to pay visits to various heads of state (including U.S. President Kennedy) in several European, North American, and Southeast Asian countries. In addition, Ikeda's meeting in Tokyo in 1961 with Korean leader Park Chunghee contributed much to efforts to reach an early agreement on the normalization of diplomatic relations between the two countries.

And without a doubt, the Ikeda administration's bold economic policies promoting greater openness were critically important. For some time since the end of the Second World War, the Japanese government had attempted to develop domestic industries and protect them from the vagaries of international markets by imposing various controls on trade and foreign exchange. However, over time these policies eventually weakened the international competitiveness of many of Japan's industries, adversely affected the expansion of free trade, and hindered the further development of the country's economy.

In response to this, the Ikeda Cabinet worked to increase the degree of the Japanese economy's openness to 93 percent by 1964, a vast improvement over the previous 42 percent under the Kishi administration. Further, the government abolished discriminatory restrictions on foreign exchange and currency transactions in compliance with guidelines for IMF member countries (as laid out in Article 8 of this organization's Articles of Agreement) and moved to become a member of the OECD. With these historic decisions and changes, Japan's economy became almost completely open and the stage was set for Japan's even more active participation in international trade that further fueled the economy's expansion. As a result of these efforts, Japan was selected to be the host of the annual general assembly meetings of the IMF and World Bank. These were held in Tokyo in September of 1964 and attended by the representatives of 102 countries.

However, by far the largest international event hosted by Japan during Ikeda's tenure was the 18th Olympic Games (Tokyo - October, 1964). Held in Asia for the first time in history, the Games were participated in by a total of 5,586 athletes from 94 countries. Japan gained enormous international prestige by demonstrating to the world through its preparations for and administration of the Olympics the miraculous progress that the country had made in rebuilding the economy and developing new skills and technology. The Olympics also provided opportunities to complete the construction of expressways and subways in and around the capital, completely remodel the capital by making changes and additions to water resource management and other public facilities that significantly improved the quality of life in Tokyo, and build the Tokaido Shinkansen Bullet Train line linking Tokyo and Osaka. When all of these accomplishments are taken into account, it is easy to see how the enormously successful Tokyo Olympics came to symbolize perhaps better than anything else the prosperity that the Ikeda administration's economic policies had brought to the entire country.

Yet another defining characteristic of the Ikeda Cabinet was the great effort it made to further modernize and popularize the LDP. This was accomplished in large part through the establishment of a "Research Commission on Party Structure" (To Soshiki Chosakai) that issued its "Final Recommendations for Party Modernization" (To Kindaika Ni Kansuru Saishu Toshin) in October of 1962 under Takeo Miki's leadership. The work of this body was complemented by the creation of a "People's Association" ([Zaidan Hojin] Kokumin Kyokai) that helped build a solid financial base for the Party.

Without a doubt, the Ikeda Cabinet made numerous important contributions not only to domestic and international politics, but to the development of the Liberal Democratic Party as well. It was thus extremely unfortunate that Prime Minister Ikeda fell ill in October of 1964, prompting him to announce his resignation on the 25th of that month - just one day after an Olympic Games Closing Ceremony that was described at the time as the most spectacular in history.

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