8. IN A YEAR OF ACHIEVEMENT, POLITICS AND PENSIONS TO THE FORE


Junichiro Koizumi, Japan; Viktor Yushchenko, Ukraine; Adair Turner, UK


By Brian Groom, Nicholas Timmins and Stefan Wagstyl
Financial Times, London, UK, Friday, December 23 2005

If 2005 was the year of Google, three other figures were, in the view of the
Financial Times’ editors, the closest challengers in the quest for the
person who made the biggest impact.

Junichiro Koizumi, Japan’s charismatic and often maverick prime minister,
did what politicians elsewhere have failed to do: he gambled on economic
reform and won a landslide election victory against many predictions.

Promoting privatisation of the country’s bloated post office as a symbol and
vehicle for broader change that would shrink the state and create room for
enterprise, he took the potentially suicidal course of dissolving parliament
and expelling 37 rebels from his ruling Liberal Democratic party. His reward
was the most famous victory in its 50-year history.

The depth of Japan’s appetite for reform remains to be proved and Mr
Koizumi will stand down after five years next autumn in order, he says, to
listen to music and visit fine restaurants. Other aspects of his tenure, such
as his assertive stance in foreign affairs that has deepened tensions with
China, are more problematic.

But he has broken the mould of a deeply conservative political system and
created a huge opportunity for the world’s second largest economy as it
starts to emerge from 15 years of deflation and stagnation.

Viktor Yushchenko, Ukraine’s president, transformed the political map of
Europe through the Orange Revolution, the popular revolt that ended the
authoritarian regime of former president Leonid Kuchma and restored
political liberty.

His victory in the disputed presidential elections of late 2004 showed that
democracy can be made to work even in the hostile territory of the former
Soviet Union. His triumph shocked the region’s authoritarian leaders,
including Russia’s Vladimir Putin, and gave heart to opposition forces as
far away as Kyrgyzstan and Lebanon.

His scarred face, the result of a poisoning attempt, became a potent symbol
of the fight for liberty against brutality. Mr Yushchenko, inaugurated on
January 23, has run into difficulties in office as his followers split amid
arguments and accusations of corruption. The president tried to restore
discipline by sacking Yulia Tymoshenko, his firebrand prime minister, and
other government members.

It has not been enough to stop disenchantment at lack of progress in
improving living standards and Mr Yushchenko faces a key test in
parliamentary elections next March. The realities of post-revolutionary
politics have taken some of the gloss off the Orange Revolution but they
have not undermined its achievement. A nation raised in political
subservience has learnt the meaning of liberty.

Adair Turner, chairman of the UK’s government-sponsored but independent
Pensions Commission, was charged with coming up with a design to avert a
looming pensions crisis in the country’s public and private sectors. He
produced an elegant formulation of the problem that will resonate with
policymakers around the world.

The former director-general of the CBI – now Lord Turner – said the
combination of rising longevity and falling fertility meant one of four
things. Either, on average, future pensioners were going to be poorer – or
people would have to work longer, save more or pay more taxes. “Anyone
who does not tell you which of those options his or her solution involves
and to what degree is not serious,” he said.

Lord Turner’s answer – which the government may or may not adopt – was
a mix of the three: a more generous state pension, paid for partly by a higher
state pension age and by higher taxes, allied to more private saving through
a state-sponsored (but not state-run) savings plan. Individuals would be
automatically enrolled while retaining the right to opt out.

Other countries will choose their own mix of policies but that is the
equation with which they will have to work. -30-


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