By John Chan
23 February 2009
As Japan confronts its worst recession since World War II, the government is in disarray, with the ruling Liberal Democratic Party (LDP) heading toward defeat in general elections due by September. Official statistics released this month revealed that the economy shrank by 12.7 percent on an annualised basis in the last quarter of 2008—the sharpest contraction since 1974 and steeper than any other major industrialised economy. Most analysts expect worse to come.
Prime Minister Taro Aso's political decline has paralleled the collapsing economy. When he came to office last September, Aso's rating in the opinion polls was hovering around 50 percent. A recent poll by NTV showed that his popularity had slumped from about 20 percent in January to just 9.7 percent. Some LDP lawmakers have defected from the party; others are demanding that Aso resign.
Aso's administration is increasingly shaky. Last month, vice minister for internal affairs Tetsushi Sakamoto had to publicly apologise after sparking anger over comments that homeless workers were unwilling to work. Last Tuesday, finance minister Shoichi Nakagawa was forced to resign after he appeared drunk at a G7 press conference in Rome.
A senior LDP figure told the Financial Times on February 16: "Being in the LDP is like being on the deck of the Titanic but with one important difference. We know that the ship is going to sink. Now all we can do is to wait for it to happen and then see who can swim."