Despite adamantly refusing to resign after the ruling Liberal Democratic Party’s (LDP) historical defeat in the July 2007 Upper House Election, Prime Minister Shinzo Abe finally threw in the towel on 12 November 2007, identifying a lack of public support that made it difficult for him to pursue his policies.

In actual fact, Abe blew his last chance to restore his political credibility when Agriculture Minister Takehiko Endo resigned from a newly formed cabinet, which was supposed to be devoid of financial scandals. Earlier, three ministers had resigned and another committed suicide over various scandals. Sniffing blood, the main opposition party, the Democratic Party of Japan, sought to oppose the extension of the Maritime Self Defence Force’s (MSDF) refuelling mission in the Indian Ocean in support of the US forces, and submitted a censure motion against Abe in the Upper House, where the opposition parties hold a majority.

When Abe first became Prime Minister in September 2006, he was very popular for taking a tough line against North Korea’s abduction of Japanese citizens. Drawing on his political pedigree as the grandson of former Prime Minister Kishi, Abe was seen as the anointed successor of reformist Prime Minister Koizumi who was the most popular politician in post-war Japan.

However, Abe’s popularity started to plummet after he readmitted the “postal rebels” purged by Koizumi for opposing the party’s policy to privatise the post office --- hitherto the piggy bank to pork barrel politics where politicians would funnel money to their constituencies for public works especially the building of roads, bridges and dams in exchange for votes. This policy u-turn crystallised the perception that Abe was no longer the reformist Prime Minister in the mould of his mentor Koizumi.

As one minister after another were engulfed in financial scandals, criticisms were increasingly levelled against Abe for appointing ministers who were his personal friends and allies, who had supported his campaign to become the President of the LDP and subsequently, Prime Minister of Japan. By recruiting ministers on the basis of personal friendship instead of political experience and clean reputation, Abe became the unwitting architect of a “crony cabinet”.

Most damaging to Abe was the tardy response of his Administration when news broke out that the Japanese pension system has failed to account for more than 50 million entries. Japanese taxpayers was shocked to realise that they may not be paid their full pension entitlement - a political grenade that exploded with the LDP’s historical defeat in the July 2007 Upper House Election.

Nonetheless, even though Abe has been in office for barely a year, his Administration succeeded in chalking up a series of successes, especially on the foreign policy front. These included the thawing Sino-Japanese relations which were in deep freeze after Koizumi’s stubborn insistence to visit Yasukuni Shrine (the symbol of Japanese militarism to the Chinese and Koreans), upgrading the Defence Agency to a Ministry of Defence to turn Japan into a “normal” state, and the induction of legislation to promote patriotic education in school, count as some of his successes. But ultimately, all these were overshadowed by the scandals that strangled Abe’s political fortunes.

The front-runner to succeed Abe is the LDP Secretary General and former Foreign Minister Taro Aso. Although a blue blood - grandson of former Prime Minister, Shigeru Yoshida - Aso is renowned to be a politician with a common touch. However, he is reputed to be a hawk and a staunch supporter of Koizumi’s visits to the Yasukuni Shrine (although he is likely to refrain from visiting the Shrine so as not to jeopardise relations with Japan’s East Asian neighbours). However, Aso is the leader of one of the smallest factions within the LDP and would need the support of other larger factions to support his position.

The dark horse to succeed Abe is Yasuo Fukuda, former Chief Cabinet Secretary of the Koizumi Administration and son of then Prime Minister Takeo Fukuda. Fukuda is reputed to be a dove and has argued that his father’s doctrine of a “heart-to-heart” relationship between Japan and Southeast Asia should also be applied to China and Japan to establish a historical reconciliation.

Fukuda comes from the Machimura faction, the largest within the LDP. However, the last three Japanese Prime Ministers Abe, Koizumi and Mori also originate from this faction and it would be unprecedented for four LDP Prime Ministers to come from the same faction in succession.

Abe’s successor will have to grapple with the following issues: submitting a new bill to enable the MSDF’s mission to continue in the Indian Ocean, cleaning up the messy pension system, ensuring the economic recovery of the nation, avoiding further financial scandals among cabinet members, and preparing the LDP to win the Lower House Election in 2009 at the latest. The last task will not be easy, as the ruling party has lost considerable electoral support from its previously strong constituency of farmers, postal masters and the construction industry. Japanese domestic politics are likely to be turbulent and confrontational as the ruling and opposition parties jockey for advantage with an eye on the next Lower House Election.

Nonetheless, the next Prime Minister of Japan also has the opportunity to improve relations between Japan and its neighbours. Cooperation on environmental issues especially climate change between Tokyo and Beijing is a promising possibility. The caveat is that the next Prime Minister must not go to Yasukuni Shrine and the Chinese must reciprocate by not playing the history card against Japan. The next Prime Minister can perhaps avoid the hard line stance of Abe towards North Korea, which has lead to an impasse between the two countries. Unfortunately, Abe reduced Tokyo-Pyongyang relations to a single issue of the North Korean abduction of Japanese citizens.

A daring and creative Prime Minister should do what Koizumi did by visiting Pyongyang and cutting a deal. If the next Japanese Prime Minister can normalise relations with North Korea, engage in environmental cooperation with China, and continue to nurture enduring ties with Southeast Asia, the long-term regional endeavour of an East Asian Community can only be enhanced.