Good evening. Ever since we launched the New Group for LDP Reform, every Sunday morning, Mr. Ishihara and I have been on TV political shows. These programs on politics now attract many more viewers, in contrast with the losing polls of the current coalition government, but still I am not sure, whether we are gaining popularity, or simply amusing to watch.

1. "LDPish" politics
We, the LDP have suffered a severe loss in the last election. The election results have revealed the fact that we've lost not only the support of urban independent voters, but also the support of working people and taxpayers nation-wide, who all rejected the bad habit of distasteful "LDPish" politics.
Now, what do I mean by "old LDP politics"? In short, it stands for the traditional "closed," "authoritarian" political attitude within the LDP, which has lead to a deep and strong sense of uncertainty and insecurity toward the nation's future. Short-sited political decisions and huge government spending projects, all aimed toward immediate electoral support have unfortunately backfired against the LDP as people have grown increasingly aware of the nation's pessimistic future situation. The lack of rule-oriented procedures and open party governance, most apparent in the recent PM's selection process, has only increased distrust and skepticism toward our party. Failing to listen to the people's true desire for an optimistic long-term national foresight, and failing to commit policy and principle, we the LDP have also failed to present ourselves as a trustworthy and responsible leading political party.

2. Defects in the Policy Making Process
The LDP's disregard of policy commitments and principles, as is taken in this election was basically caused by habitual easy dependence to the bureaucrats in terms of policy-making ability. Traditionally, the Japanese way of national governance has long been considered to be built upon the presumption of relative intellectual sophistication of bureaucrats, businessmen, and politicians, and of course, politicians remain at the bottom. Although, I am not necessarily saying that our intellectual level is not very high.
But in the 1990s, there were too many policy errors and mistakes made by bureaucrats, like the forbearance policy in bank supervision and HIV cases. Now, politicians as well as voters have come to realize a simple reality that the knowledge of bureaucrats does not ensure good governance of the nation. Bureaucrats do make mistakes, surprisingly too often.
And the mistakes have been repeated again in the recent Sogo case. I think the policy-making process of Sogo revealed structural defects in the Japanese governance system; that is, a lack of democratic review of the policy. If you look at the formality of the decision making process, the initial plan of discharging Sogo's debt with no legal proceedings, was ratified not only by the Financial Revitalization Commission, but also the Ministry of Finance and eventually by the Cabinet, including the Prime Minister. However, in reality, no substantial discussion was made before making the decision to use the taxpayer's money, neither in the Cabinet nor in the both Houses. Even Mr. Miyazawa or Mr. Tanigaki had no sufficient review of the Sogo case, because of the time constraints after the general election. The bureaucrats apparently intended to make the controversial Sogo decision during the political vacuum of the national election. This is a serious case of negligence in the governmental body.
I believe the LDP must depart from its easy dependence on the bureaucracy, which tends to derail the government. In particular, I would like to make three key proposals for better governance of the nation. First, we must increase political appointees and non-bureaucrat advisors within the Ministries. Even though we will introduce a new system of Deputy Minister and Parliamentary Vice Minister from next January, we still need to ensure better governance upon bureaucracy. Politicians can still be easily deprived of their access to timely and balanced, sufficient information independent from bureaucracy to make their final decision. Besides, Ministers are very isolated in the Ministry without any own policy assistance to consult with, and can very easily be brainwashed by the bureaucrats. Plus, Ministers have often given in to bureaucratic decisions, even if they might not agree with them totally, with the hope that a better relationship with bureaucracy will lead to better results for their constituencies through the budget and other policies.
I think this could be one of the clues to the questions why the structural reform process in Japan is so slow, compared with other countries that adopt the same Parliamentary system such as England, New Zealand or Australia.
Second, we must increase politician's own legislative policy staffs to strengthen legislative power of individual politicians. Currently we have only one permanent assistant for policy studies paid by taxpayer's money. Legislative assistance in drafting laws as well as gathering independent information must be strengthened for both House members and the Policy Council in the Party.
Third, we must establish a primary election system in the Party. Current preferential treatment of incumbents in the candidate selection process for party ticket might help unsound candidacy inheritance system survive. I think primary election will offer better solutions to recruit the right person with real concerns about national interests and strategies. It is often pointed out that our new group, cited as "New Breed" or "Brats in the Diet," consists of many Nisei Giin, sons and daughters of politicians. While I admit Japan's Nisei ratio in the both Houses is extraordinarily high, this comes from structural weaknesses that Japan has in its political recruiting system. This is our weakness, not advantages. The introduction of primary elections could sort out some unqualified Diet members.

3. Commitment to the Structural Reform
I think the Sogo case also shows fundamental problems that Japan once faced two years ago, when we "the Brats" introduced the bank nationalization law amid the financial crisis. The real question is whether we should proceed with structural reform at the risk of short-term pain, or stay with vested interests with tremendous long-term costs.
In my judgement, after the fall of 1998, the LDP shifted the policy principle from reform to postponement, in the name of emergency packages. But with fear of the imminent risks caused by accumulated national debt, Japan now must make re-commitment to its reform. I think there were too many policies taken with no distinct purpose in the two years. To name but a few, for example, was bank capital injection just a purpose of protecting ailing banks, or a tool for industrial reorganization and structural reform? Second, was huge public work spending a purpose of taking care of protected construction industry, or a tool of maximizing public welfare for the next generation?
I think these policy mix-ups of purpose with tools gradually created a huge wall between vested interests and Japan's potentials. Especially, after the bubble burst in 1991, the LDP started to heighten the wall every year, by subsidizing the vested side of the wall. Our defeat in both elections in 1998 and in 2000 clearly shows the divide we made became seriously deep: This is a vicious circle.
This is not a sound policy, this is not a sustainable track, and this is not even a conservatism ideal, on which the LDP shall have a fundamental basis. I believe a sound conservatism should serve people to encourage to get out of bad habits, rather than to stay with it. Our group believes that we need to tear down the wall. Thus, our group decided to go first to the local cities and towns, not just urban cities, in order to both convey our candid messages and to listen to frustrations and objections of local LDP supporters.

4. Conclusion
It is often pointed out that Japan is now at a critical juncture. I am of the same opinion, having seen drastic changes in the global and economic landscape, prolonged economic recession at home, and the political disarray during the past several years. History tells us that large institutional changes take place only within a short period of time and the new framework remains long. This is the case of Meiji Restoration of 1868. And subsequent to drastic changes, both stability and prosperity were realized on that basis. The system of the leadership proved to plant the seeds for the future. I strongly hope our LDP reform agenda with the right purpose will lead the next generation, because I believe, if the LDP fails to reform, Japan fails to reform.

Thank you.