Was former Prime Minister Koizumi the bad guy?

The Japanese economy has been picked up and hurled off a cliff. Such a steep decline in GDP over the past two quarters -- a quarter-on-quarter contraction at an annualised rate of 15.6% in the January-March quarter and a 12% annualised quarter-on-quarter decline in September-December 2008 -- is probably unique in the lifetimes of professional observers of any major economy.

No country within the Organisation for Economic Cooperation and Development (OECD) has suffered such a fall in key economic values as Japan. Over the course of this latest decline, industrial production reverted to 1992 levels, exports fell over 70% in the first quarter from the previous year, knocking 15 percentage points off GDP growth, and private capital expenditure slumped 36% in the same period.

The figures are chilling and place doubt over the economic policies started under former Prime Minister Junichiro Koizumi and his equally committed economics and finance minister, Takenaka Heizo, in 2001.

Koizumi came in with the promise to fight vested interests and make Japan's economy more efficient and dynamic, using the privatisation of the Post Office and the national road corporations as his symbols. In his recent book on Japanese politics, Governing Japan, Arthur Stockwin said: "Koizumi was ideologically committed to globalisation in the sense of cutting through obstacles to market capitalism that existed in Japan's managed economy."