Japan poised for political change

Japan goes to the polls on Aug 30. Prime Minister Taro Aso who heads the ruling Liberal Democratic Party (LDP) and the LDP-New Komeito coalition announced snap polls after a resounding defeat in Tokyo’s metropolitan assembly elections in early July. In this election, the opposition Democratic Party of Japan (DPJ) trounced the LDP with 54 seats to 38, thus precipitating the snap polls.

Ever since the popular prime minister, Junichiro Koizumi left the political scene of Japan in 2006, Japan has seen three prime ministers — Shinzo Abe, Yasuo Fukuda and Taro Aso — none of whom could match Koizumi in style, maturity and astuteness to run the country. Since then the fortunes of the LDP have seen a downslide and it is most likely to face defeat in the August election.

The Japanese people are getting disenchanted with LDP’s style of governing the country and looking for a change. Even if Aso has called for the snap polls to thwart his opponents, the DPJ will deny the LDP a free ride this time.

Rise of Yukio Hatoyama

In the last 53 years, the LDP has ruled Japan continuously, except for a brief period of 11 months in 1993. All this seems poised to change. Owing to ill health and the recent fund-raising scandal in which his political secretary was involved, the DPJ supremo Ichiro Ozawa has paved way for young Yukio Hatoyama. While the LDP suffers from a serious image problem, DPJ’s Hatoyama boasts of a PhD from Stanford University and his relative youthfulness may attract the Japanese voters.

LDP is in disarray as some party members have openly voiced their displeasure with Aso. Voters seem to be preferring young leaders as was demonstrated in the recent election to the mayor position in the ancient Japanese capital of Nara, in which DPJ-backed 33-year-old Gen Nakagawa was chosen.

While Hatoyama may be preparing to be Japan’s prime minister in seven weeks’ time, LDP runs the risk of breaking apart if it finds itself in the unusual position of losing power. A poll conducted last fortnight for the widely-read Asahi Shimbun showed that 37 per cent of those surveyed said they would vote for the opposition DPJ in national elections, compared to 22 per cent for the LDP.

A poll by another newspaper, Yomiuri Shimbun, found Aso’s approval rating had fallen to 20 per cent. The three prime ministers who succeeded Koizumi only deepened the country’s political paralysis and could not arrest economic decline.

In fact, the denouement of the LDP has been such that the question of holding general elections loomed in the horizon ever since Aso assumed office last September. But he wanted to wait to give the economic stimulus measures time to take effect, and possibly revive his party’s flagging popularity. That does not clearly seem to be the case.

Highest debt-to-GDP ratio

What are likely to be the key issues that the parties are going to place before the electorate? The focus is almost exclusively on the economy. Japan has been in an intractable economic slump for nearly two decades, following the bursting of its ‘economic miracle’ bubble in the late 1980s. Japan is faced with a crisis of identity as a result of four factors. First, economic malaise has yielded slow to no growth, persistent deflation, and the highest debt-to-GDP ratio in the developed world.

Second, China has grown in stature and influence so much that it threatens to eclipse Japan’s position as the world’s second largest economy. Third, demographic changes in Japan are putting enormous strain on the government’s social security sector. Fourth, Japan faces critical dilemma in defining its status among other emerging economies.

Aso has passed three stimulus packages, the latest totalling approximately $150 billion, or three per cent of the GDP, to pull the country out of recession. The people have not warmed up to this agenda, however. The DPJ offers an alternative stimulus package worth four per cent of GDP, centering on payments to households in an attempt to increase consumption. Both face huge challenges in explaining how they would raise money for their policy prescriptions.

On the foreign policy front, the DPJ wants to have a re-look at Japan’s security alliance with the US. The DPJ has already an overwhelming majority in the Upper House having won the July 2007 elections. If the DJP manages to assume power in the Lower House, Japan is poised for major policy changes, both in domestic and foreign policy fronts.

(The writer is a senior fellow at the Institute for Defence Studies and Analyses, New Delhi)

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