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Abe's party rocks bureaucracy with ministry reshuffle proposal

Move comes after scandals bring powerful but opaque ministries under scrutiny

Tokyo's Kasumigaseki district, the apex of Japan's bureaucracy. (Photo by Hirofumi Yamamoto)

TOKYO -- Talk of reorganizing Japan's powerful bureaucracy has quickly gained currency in Prime Minister Shinzo Abe's ruling party after a string of missteps and alleged cover-ups involving officials whose loyalties have been questioned.

Recommendations on reshuffling government ministries for the first time since 2001 will go to the prime minister's desk as soon as next month.

The Liberal Democratic Party's administrative reform team, which answers directly to Abe, sent out letters to ministries in late March, Nikkei has learned. The letters notified the ministries of the party's intention to hold hearings on whether the current administrative structure can cope with the demands placed on it.

The team is led by Akira Amari, a loyal ally of Abe's and his former economic policy minister, which only added to the shock at the ministries that received the letter.

The LDP team's review will look for overlapping functions and inefficiencies mainly in the health, internal affairs and land ministries, which became bloated in the last reshuffle.

Shinzo Abe has his sights on a third straight term as leader of the ruling LDP.(Photo by Uichiro Kasai)

Some in Kasumigaseki, the Tokyo government district that is a byword for Japan's bureaucracy, speculate that these ministries may be dismantled and recast. The health and labor ministry recently came under fire for producing misleading data on worker overtime, which Abe used to support labor legislation that his government says will boost productivity.

Other possible changes include creating a standalone telecommunications regulator and a trade agency similar to the U.S. Office of the Trade Representative, both of which would involve carving out pieces of the Ministry of Economy, Trade and Industry.

What has Kasumigaseki worried is the political aspect of the proposals. Specifically, bureaucrats suspect that Abe could use ministry reform as a centerpiece policy as he heads into his bid for a third straight term as LDP leader in September.

Blaming the inefficiencies of Kasumigaseki would steer eyes away from the school land purchase scandal that has dragged down his approval ratings.

It would also give his administration new life and avoid becoming a lame-duck if he were to win his last term as party leader. A victory in September would give Abe the reins to the party until 2021, but with no prospect of re-election.

"The focus of the 2001 reforms was to reduce the number of ministries, but that defeats the purpose if administrative functions are weakened," said an LDP official. "We want to discuss creating an administrative structure that can lead Japan for the next 30 or 50 years."

Past Japanese governments' ability to push through sweeping reforms of the bureaucracy depended on their reserves of political capital. 

Support for Abe's cabinet tumbled to 42% in the latest Nikkei/TV Tokyo poll, taken late last month before a key Ministry of Finance figure in a school-related land sale scandal testified in parliament. That was down 14 percentage points from February.

The last major reorganization of Japan's bureaucracy also came at a time of widespread public distrust in politics. Tokyo's economic management was seen as having failed in the financial crisis that followed the bursting of Japan's asset-price bubble in the early 1990s. 

A strong bureaucracy formed a vital part of Japan's postwar economic governance model  -- the so-called iron triangle of civil servants, elected officials and big business. But Kasumigaseki has also seen its share of scandal.

In the school scandal, the Finance Ministry had secretly altered documents related to a deeply discounted sale of public land to a nationalist school operator in Osaka. Among the changes was the removal of references to the prime minister's wife, Akie Abe, who was said to have voiced support for the school's curriculum. The prime minister denies any involvement by her or himself in arranging the land sale or ordering changes to the documents.

Nikkei staff writer Masayuki Yuda contributed to this article.

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