By Mary Jordan
Washington Post Foreign Service
Thursday, July 30, 1998; Page A21

TOKYO, July 30 (Thursday)—Keizo Obuchi was officially voted Japan's new prime minister by parliament this afternoon, and he swiftly filled the top financial post, one of the most crucial economic policy jobs in the world, with a former premier.

Kiichi Miyazawa, 78, had earlier declared he was too old and had "no will" to take the demanding cabinet post of finance minister. But he gave in to extraordinary public pleas from Obuchi, who faces enormous economic and political battles from his first day in office.

Miyazawa is an economic heavyweight, a politician who twice before headed the Finance Ministry. Lately, he has been at the center of an effort to fix Japan's ailing banking system and is highly valued in government circles here because he speaks English and is on a first-name basis with top U.S. economic officials.

It is rare for a former Japanese prime minister to return to a lesser cabinet post, and his presence was immediately viewed by many as a boost for Obuchi. "The expectation is that Miyazawa's appointment will cheer up the whole cabinet," as well as international financial markets, said political analyst Minoru Morita.

"I am not sure I will live up to your expectations, but I will do my best," Miyazawa said. He is best remembered by most Americans, perhaps, as the prime minister who cradled the head of President Bush when he was taken ill and vomited at a dinner in Tokyo in 1992.

Japan is in the throes of its deepest economic crisis in a half-century, one that threatens global economic stability, and angry Japanese voters handed the ruling Liberal Democratic Party a major setback in elections for the upper house of parliament on July 12, prompting Ryutaro Hashimoto to resign as prime minister and party leader.

The lower house of parliament, where Obuchi's Liberal Democratic Party holds a majority, selects the prime minister, and the 500-seat chamber formally elected Obuchi the nation's new leader with 268 votes. However, in a move that points to the shaky foundation of this new government, the upper house later cast a non-binding vote for opposition leader Naoto Kan as prime minister. Obuchi faces a major challenge to coax that chamber to pass laws needed to correct the nation's economic course. If he fails to do so, his government could be paralyzed and even collapse.

Obuchi, who has scant economic experience himself, issued repeated appeals for Miyazawa to take the demanding finance post, putting on national display the new prime minister's skills as a persuasive dealmaker. But the fact that Obuchi had to plead for someone to fill the nation's top economic job is another sign of the difficulties ahead. Japanese media reported that during a meeting with Miyazawa Wednesday night, Obuchi said: "I will not be able to form a cabinet unless you agree."

Miyazawa's record is not without blemishes: He was ousted as prime minister after losing a no-confidence vote in parliament in 1993. While he is considered clever and capable and has been working hard to solve Japan's enormous economic problems, he has yet to put forward a credible repair plan.

Even Miyazawa's supporters worry that he is physically unable to perform the more rigorous parts of the job, particularly the grueling globe-trotting for economic summits or standing before parliament for many hours at a stretch to answer questions about the economic crisis. In fact, Miyazawa is expected to transfer some of his more tiring and less important duties to others.

Miyazawa seemed aware of criticism Obuchi might incur if the older man's argument had prevailed -- that "it's not the time for old ones to come in." But Obuchi insisted that Miyazawa is the answer to his prayers. "He has wisdom, experience and international confidence," Obuchi declared.

It is not common for Japanese prime ministers to speak English, and it was widely noted here that when he was prime minister, Miyazawa was often seen chatting in English with American officials. He has been on the phone with many U.S. economic officials lately and is known in financial circles as "Mr. Bridge Bank," because of his advocacy of a plan -- similar to one implemented in the United States to resolve the savings and loan crisis -- to purge the Japanese banking system of banks weighted down by huge numbers of defaulted loans.

His daughter, Keiko, is married to U.S. diplomat Christopher LaFleur, the second-ranking official at the U.S. Embassy here after Ambassador Thomas Foley.

Many analysts noted the thin pool of economic talent in the Liberal Democratic Party, leading to speculation after Obuchi's assumption of the party leadership that the new finance minister might be chosen from the private sector. But living up to his reputation as an old-style party functionary, he did not seek a private banker or businessman but reached instead into the ranks of party elders to make the appointment.

Obuchi, the sixth Japanese prime minister to take office since President Clinton was elected, has said his main job is to repair the economy. But both economically and politically, he is in for a rough ride; already some members of his party are predicting his government will not last the year.