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Chapter Twenty-Three
Period of President Aso's Leadership

On September 1, 2008, Prime Minister Fukuda stepped down and a Party presidential election was called. The candidates were Nobuteru Ishihara, former chairman of the Policy Research Council, Ms.Yuriko Koike, former Defense Minister, Taro Aso, Party Secretary General, Shigeru Ishiba, former Defense Minister, and Kaoru Yosano, Minister of Economic and Finance. On September 22, the presidential election was held at the Joint Plenary Meeting of Party Members of both houses of the Diet as a substitute for the Party Convention. Mr.Aso obtained 351 votes, Mr.Yosano, 66 votes, Ms.Koike, 46, Mr.Ishihara, 37, and Mr.Ishiba, 25. As such, Mr.Taro Aso became the 23rd President of the LDP.

As a result of the LDP internal election for a new leader, at the Extraordinary Diet Session convened on September 24, the election to formally elect a new prime minister was conducted across both Houses. With LDP having the numbers in the lower house, President Aso was elected the 92nd Prime Minister of Japan. He appointed veteran Diet members to senior positions: Mr.Takeo Kawamura was appointed Chief Cabinet Secretary and Mr.Toshihiro Nikai as Minister of Economy, Trade and Industry. He also promoted younger members as ministers, for example, 34-year-old Ms. Yuko Obuchi was assigned Minister in charge of Declining Birthrate Issues. It is customary for the Chief Cabinet Secretary to announce all ministers’ names at a press conference. However, this time, Prime Minister Aso personally announced the names of his Cabinet members and explained what he was expecting of each minister. He was showing his determination to accept and assume responsibility as Japanese prime minister.

The challenges awaited the prime minister. On September 15, just days before the Aso government was formed, Lehman Brothers, an American investment bank, went bankrupt catapulting the world into a global financial crisis - the so-called “Lehman shock.” Prime Minister Aso, judging there would be a serious impact on Japan if the country stood idly by, decided to give top priority to an economic response.

At the end of October, the Asia-Europe-Meeting (ASEM) was held in Beijing, China. The world's top leaders gathered and Japan's commitment to playing a leading international role was tested. There was a feeling among leaders that a successful international response to the financial crisis would depend, among other things, on Japan's actions as the world's second-largest economy. PM Aso, drawing upon his long career in business, citing Mr.Greenspan's word, stated that the economic crisis was a once in a century phenomenon and that his country must introduce economic measures to stimulate domestic Japanese demand. After consulting with his fellow world leaders, Aso formed the view that it was not a time for domestic politics, but a time for Japan to execute its responsibility as a major economic power.

He introduced three key measures to boost the Japanese economy - nicknamed the three-stage rocket. The first stage was a stimulus package of 11.5 trillion yen in the first Supplementary Budget of 2008, to ease people's concerns and ensure economic security for Japanese workers. The second measure was contained in the second Supplementary Budget of 2008 (worth 27 trillion yen) to maintain living standards; and the third was spread over the FY 2009 Budget (37 trillion yen) as an urgent measure to defend people's living standards and the first Supplementary Budget of 2009 (15 trillion yen) as a measure to address the economic crisis. These were unprecedentedly large-scale economic measures and accomplished under the Aso's political leadership. He also introduced a number of other landmark measures including a supplementary income payment, a reduction in cost of expressway tolls, tax reductions for buying energy efficient cars, and awarding eco-points for purchases of energy saving electrical appliances.

In terms of diplomacy, leveraging his experiences of living overseas and his excellent command of English, unfolded his foreign policy visions of “value oriented diplomacy” including “the arc of freedom and prosperity”, which he first articulated while Minister of Foreign Affairs. This added a new pillar to Japan's fundamental foreign policy approach - the strengthening the Japan-US alliance, pursuing international cooperation including with the UN, as well as strengthening of relationships with Japan's neighbors including China, Korea and Russia. The new pillar places more emphasis on universal values, namely freedom, democracy, fundamental human rights, the rule of law and the market economy. It represented an ambitious and worthy plan to create a rich and stable geo-political region with a foundation in universal values, stretching from the Scandinavian countries to Baltic states, and countries in Central and Eastern Europe, Central Asia and the Caucasus, the Middle East, the Indian subcontinent, the Southeast and Northeast Asia.

To realize his vision, Japan announced plans to support those countries who have started to create a free and prosperous society in the arc area, through Japan's ODA contributions in the essential fields of education and health, the establishment of democratization, public infrastructure and the legal system. Japan will promote cooperation with these countries through trade and investment, while working with countries sharing these universal values towards the expansion of this “arc of freedom and prosperity”. Just after assuming office, the Prime Minister explained his proposal for an ‘arc of freedom and prosperity’ at the UN General Assembly and generated much attention.

Among other things, the centerpiece of “the arc of freedom and the prosperity” was the reinforcement of Japan's relationship with India. On October 22, Prime Minister Aso held talks with Indian Prime Minister Manmohan Singh during his visit to Japan. The two leaders agreed to promote cooperation in the fields of security and economy and to support the Delhi-Mumbai Industrial Corridor project, and the promotion of personnel exchange, as well as in the fields of arts and science. Prime Ministers Aso and Singh signed the Joint Statement on the Advancement of the Strategic and Global Partnership between Japan and India and the Joint Declaration on Security Cooperation between Japan and India.

Prime Minister Aso also sought to promote cooperative relationships with neighboring countries, particularly China and South Korea. On December 13, having invited Premier Wen Janbao of China and President Lee Myung-bak of Korea to Japan, PM Aso hosted the 1st Japan-China-Korea Summit Meeting at the Kyushu National Museum in Fukuoka. This was the first meeting created for the purpose of bringing together the three leaders, not like a meeting held at the occasion of other international conferences; the first meeting held independently of those multilateral meetings. The leaders discussed various issues including development and the future trilateral cooperation, the international financial and economic situation, and local and international situations. They signed the joint statement on trilateral partnerships, which emphasized the strengthening of future trilateral cooperation based on the principles of openness, transparency, mutual trust, common interest and respect for their diverse cultures.

In the context of the fallout from the Lehman shock, the leaders released a joint communique about international finance and the economy. Furthermore, in terms of the disaster prevention, they issued a joint declaration about the disaster prevention cooperation among the three countries. Prime Minister Aso raised the issue of Japanese abductions by the North Korea, the biggest pending problem of Japan to be solved. Both Prime Minister Wen and the President Lee expressed their understanding of the efforts Japan has been making on this matter, and that they would support Japan's future diplomatic endeavors.

On February 24, 2009, the first Japan-U.S. summit talk between Prime Minister Aso and the recently elected U.S. President Barack Obama was held in Washington, D.C. PM Aso was the first foreign leader to visit President Obama at the White House after he assumed office. The two leaders reaffirmed their commitment to the Japan-U.S. alliance, agreeing to collaborate on a range of challenging bilateral issues ranging from those in the Asia-Pacific region, to financial crisis facing the global community, Afghanistan and the instability in Pakistan, as well as the global issues of climate change and supply of energy. Above all, it was the financial crisis that had to be urgently addressed. The leaders agreed to make every possible effort for the recovery of the world economy as the largest and the second-largest economic powers.

In those days, the piracy threat confronting ships off the coast of Somalia was a major international problem requiring urgent action, including the governments of the affected countries dispatching warships to guard their ships. Japan-affiliated vessels account for 10% of the annual navigation passing through sea lanes, but Japan could not, up until this point, dispatch its warships to safeguard those vessels. Japanese law does not define piracy. The Self-Defense Forces (SDF) are required to guard only objects on Japan-affiliated vessels in terms of the maritime security operation under the SDF Law. They are not able of guarding foreign ships. Therefore, it was impossible for them to operate counter activities against pirates.

By that time however, Japan had no choice but to accept responsibility as an important member of the global community. In January 2009, PM Aso established a counter-piracy task force and launched a study for the enactment of a counter-piracy law aiming at broadening the target of the ships that the SDF are authorized to guard.

With an election for the Lower House approaching, although the opposition parties attempted to use the enactment of this bill as a tool to maneuver the political situation against the government, the bill was eventually enacted on June 19. With the passing of the act, the restrictions of weapons able to be used by the SDF for self-defense and urgent rescue were relaxed.

On July 13, PM Aso announced his decision to dissolve the Diet on July 21, 2009 and call for general elections. On July 21, at a press conference after the Diet was dissolved, the Prime Minister said that he would lead the Liberal Democratic Party to success in the general elections. He reaffirmed his determination to fight the election with all his energy. However, it was a tough election for the LDP from the very beginning, with the DPJ's slogan “change the government” generating a lot of appeal amongst voters. Prime Minister Aso campaigned on his future vision for Japan and urged all Japanese to use the month of August to think about the future of Japan. At the election, on August 30, the Democratic Party of Japan (DPJ) won 308 seats, well in excess of the 241 seats required for a majority, thereby defeating the LDP. Since the LDP lost the power, Prime Minister Aso announced his resignation.

Though his term in office was a little less than one year, Prime Minister Aso had devoted all his energy to defending the national interests of Japan. On September 16, at his last press conference as PM, he made the following statement to the people of Japan: “I am confident of Japan's future. I have never doubted the Japanese people's capacity and resolve to recover in the face of adversity. We have achieved much and will continue to make remarkable progress. Japan has a bright future ahead.” In concluding his message, Mr.Aso looked full of confidence and pride, and he even refreshed.

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