ASIA : ‘Democracy Will Be Tested’ as Japan’s Parliament Opens

TOKYO — It’s the Year of the Rooster, according to the Asian lunar calendar, but 1993 will be nothing to crow about in Japan.

As the Japanese Parliament opens its 126th session today, it faces myriad tough issues ranging from a moribund economy to political scandal to a ballooning trade surplus.

Noting the urgent need to kick-start the economy and restore public trust in government, Prime Minister Kiichi Miyazawa this week declared 1993 “the year in which the nation’s democracy will be tested.”

Here’s a look at the largest issues looming before the Parliament:

ECONOMIC STIMULUS: The world’s second-largest economy remains mired in recession, setting off howls among politicians and business leaders alike for stronger stimulative measures.

Income tax cuts top the list of potential cures. The ruling Liberal Democratic Party’s tax research council has called for cuts as large as $40 billion, but $16 billion is more likely. That would amount to an estimated windfall of $400 per household. The securities firm S. G. Warburg in Tokyo estimates that such a tax cut would boost consumption spending by 1.2% and gross national product by 0.5%.

Reports on Japan’s trade balance, due today, are likely to fuel the cries for stronger measures. The reports are expected to show that Japan racked up a record trade surplus topping $100 billion in 1992, up 33% from the previous year, including more than $40 billion with the United States alone. That will redouble U.S. calls for Japan to expand its economy through more domestic spending rather than exports.

However, the conservative Ministry of Finance remains opposed to income tax cuts. Officials fear that taxpayers will squirrel away the windfall in savings rather than spending, and they are loath to finance the tax cut through deficit spending. A showdown between bureaucrats and business seems likely.

POLITICAL REFORM: Miyazawa has called for “sweeping reform” to restore public trust in a political system tainted by one scandal after another involving bribes and gangsters. The ruling party plans to submit a package of four reform bills in the new session.

The most talked-about reform would change the current system of electing several people per district to just one per district in the lower house of Parliament. Because the so-called multiple-seat system ends up pitting members from the same party against each other, it requires raising enormous amounts of money--thus inviting corruption. Reform supporters say that reducing the need to raise money will result in cleaner politics. But opponents argue that the single-seat system will lock in incumbents and make it even more difficult for women or minority-party candidates to prevail.

Many of Miyazawa’s appointees to the ruling party’s reform panel rose under the multiple-seat system and are not considered firebrand reformists. The outlook for reform: doubtful.

RICE OPENING: Miyazawa had hinted late last year that the government might make a “political decision” (read, “concession”) on rice, should the global trade talks be headed toward conclusion. But now that the Uruguay Round of talks appears stalled again, all such discussion has disappeared.

Indeed, some officials here are hoping that President Clinton will drop the U.S. demand for Japan to replace its virtual ban on rice imports in exchange for concessions in other areas of trade.

But even as opposition to rice imports remains stalwart on the surface, trading houses here are scrambling to set themselves up for business. According to Japanese reports, the trading firm Unicoop Japan Ltd. is studying the idea of growing Japanese-style rice in Vietnam and importing it to Japan.

SAGAWA SCANDAL: Expect Act II of the money-and-mob scandal involving Tokyo Sagawa Kyubin, a trucking firm whose officers are accused of funneling millions of dollars in illegal contributions to top politicians. Opposition leaders say they plan to renew efforts to get to the bottom of the scandal, possibly holding hostage the 1993 budget.