EVERY time the Japanese economy seems teetering on the brink of disaster, Prime Minister Ryutaro Hashimoto comes up with a new financial rescue package designed to stave off total collapse and defuse increasingly vocal calls for him to resign. The latest in the long line of such packages came on Friday, when the Tokyo cabinet approved US$128 billion in tax cuts, higher government spending and low-cost loans designed to revive an economy which is dangerously close to dragging the world into recession.
Anywhere else, such a massive expansionary package, amounting to twice the annual gross national product of Thailand, would be seen as decisive action by a concerned government.
But, in Japan, the scale of the problem is so huge and Mr Hashimoto's credibility so low, that the measures are instead viewed as too small to lead to any significant improvement in the economic situation. The markets were certainly in no mood to give the Japanese Government the benefit of the doubt: the yen slipped slightly against the dollar after the announcement.
The welcome from Washington for the measures was accompanied by a warning that they did not go nearly far enough. Even the Japanese public was sceptical about whether the package would do much to end the seven-year slump; mass-circulation papers yesterday criticised the emphasis on temporary, rather than permanent, tax cuts and the lack of fundamental economic reforms.
The truth is that, however substantial the measures which it takes, virtually no one - whether in Japan or overseas - any longer believes that Mr Hashimoto's government is capable of leading the nation towards economic recovery. In Tokyo, the only argument is over whether the Prime Minister will fall from power before or after parliamentary elections in July. Even lawmakers within his Liberal Democrat Party are starting to turn against him, while the opposition is set to unite around the charismatic Naoto Kan, who became a national hero after exposing the Government's role in allowing thousands of hemophiliacs to be infected with AIDS.
A change of government would not necessarily be the solution for Japan at this stage, as it would only lead to further uncertainty. But it is starting to look increasingly inevitable, and the world would do well to prepare for the changes which this will bring.