- The Washington Times - Thursday, April 6, 2000

TOKYO Ruling party insider Yoshiro Mori took control as Japan's new prime minister yesterday, squelching speculation he would call early elections and promising to press ahead with his predecessor's economic recovery plan.

The election of Mr. Mori by parliament resolved a leadership crisis in the Japanese government triggered Sunday when Prime Minister Keizo Obuchi had a stroke and went into a coma. Mr. Obuchi remains hospitalized on life support.

At his first news conference as prime minister, Mr. Mori brushed off suggestions that opposition pressure would force him to call a general election before July, when leaders from the Group of Eight nations will hold a summit in Japan.

Mr. Mori, the former second-in-command in the Liberal Democratic Party, said bolstering the economy and preparing for the summit were his priorities not elections. The government must call elections by October.

"I have other major tasks to carry out, and I have to make sure that I execute those tasks in a proper manner," he said.

Mr. Mori, 62, took office with a promise to keep up the policies of Mr. Obuchi, who mounted a huge public-spending campaign to jar Japan out of recession. He kept Mr. Obuchi's Cabinet intact, with all the officials the same except for the top spot.

Mr. Mori said his first job would be to end Japan's decade-long stretch of malaise, and especially to boost private consumption, long considered the central weak spot in the economy.

"I will be following the path of Prime Minister Obuchi," Mr. Mori declared. "I will finish what he has started and left unfinished."

A former trade minister, Mr. Mori won solid majorities in votes yesterday in both houses of parliament after his installment earlier in the day as president of the LDP. He and his Cabinet were sworn in by Emperor Akihito.

Mr. Mori emerged as the most viable replacement as prime minister shortly after Mr. Obuchi's stroke. As LDP secretary-general, Mr. Mori had a solid power base.

Reviving Japan's economy will be Mr. Mori's major challenge. As the result of a tremendous public spending spree, the economy has shown signs of improvement. But unemployment is stubbornly high and growth has been weak. There is also mounting concern about the burgeoning fiscal deficit.

In Japan's financial markets, the dollar rose slightly against the yen yesterday and stock prices slipped. Traders said the political situation was not much of a factor because most analysts believed economic policy would not change.

Economists expected Mr. Mori, like Mr. Obuchi, to try to get the economy rolling again before trying to tackle the deficit.

"I think it's basically more of the same," said Peter Morgan, economist at HSBC Securities Ltd. in Japan. "The basic implication is that their first priority is to engineer a self-sustaining recovery."

One of Mr. Mori's first jobs on the international stage will be a meeting in Russia this month with the newly elected president, Vladimir Putin.

Another major test will come during a summit of G-8 nations, the world's seven leading industrialized nations and Russia. President Clinton is among those expected to attend the summit, and America's military presence in Japan is likely to become an issue.

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