Return of stability

The ruling coalition of the Liberal Democratic Party (LDP) and New Komeito of Japan swept to a convincing victory in the House of Councilors election on July 21, a triumph that has sealed an end to the divided Diet. The coalition alliance has earned a majority in the 242-member Upper House, reducing   the opposition camp to a minority force and enabling the LDP-Komeito coalition to control both Diet chambers. The opposition camp made a disappointing showing in the national election, the first to be held since the LDP-Komeito alliance recaptured power in House of Representatives election. The election tallies clearly indicated voters’ desire for political stability.

The leading opposition Democratic Party of Japan (DPJ) suffered a decisive setback, reducing its Upper House strength to an all-time low since its inauguration. Though DPJ president Banri Kaieda expressed his intention to stay on as party chief despite the defeat, he faces an uphill task. 

The ruling coalition’s electoral success reflected voters’ overall support for Abe’s economic and other policies that have been introduced since he returned in December 2012. The LDP-Komeito coalition gained a resounding electoral gains follow its success in snatching power from the DPJ-led administration in December’s Lower House election after about three years in the political wilderness. The LDP-Komeito alliance hoped to win a total of 63 or more seats to be combined with the two parties’ uncontested Upper House seats-50 and nine, respectively and by doing so, the parties wanted to retake a majority in the upper chamber, consequently putting an end to the divided legislature, in which the Lower House was dominated by the LDP-Komeito coalition but the Upper House was controlled by the opposition camp.

The most important focus of this election was voters’ evaluation of Abenomics, the economic policies of the Abe administration represented by the “three arrows” comprising bold monetary easing, flexible fiscal stimulation and a growth strategy to encourage private investment. It transpired from the LDP’s big gains in the election that many voters have a good impression of the effects of Abenomics. In contrast, opposition parties failed to convince voters that Abenomics came with risks. For instance, DPJ president Banri Kaieda urged voters to consider a situation in which prices went up as expected but people’s wages did not. However, such appeals did not seem to have had much impact.

Abe tried to sell the argument that the real economy is picking up as a result of Abenomics. This was an apparent rebuttal to opposition parties that emphasised the possible adverse effects of his economic policies. The Nikkei stock average was hovering around the 9,000 mark in November 2012 before the dissolution of the Lower House, but it has now risen to the 14,000 mark. It even briefly went above 15,900.

Structural reforms

The thumping victory means ushering in a new period of stability for politically volatile Japan. This means both chambers will now be under governmental control, unblocking the bottleneck that has hampered legislation for the last six short-term premiers. Abe’s hands will now be strengthened, enabling him to push through painful, but necessary, structural reforms aimed at dragging Japan out of two decades of economic malaise.

Since romping to power in December’s vote for the more powerful Lower House, the hard-charging Abe unleashed a wave of spending and pressured the central bank to flood the market with easy money. The moves – the first two “arrows” of a project dubbed “Abenomics” – sent the yen plunging, to the delight of exporters, and the stock market soaring. This, coupled with some feel-good figures on GDP growth, powered 60-per cent-plus public approval ratings for the prime minister, whose disastrous first turn in the top job, till September 2007, has paled in the public mind.

The third arrow of Abe’s policy programme remains hazy, but will include corporate tax breaks, special business zones, plans to boost female participation in the workplace and Japan’s participation in a mooted free trade area that encircles the Pacific. However, the farming industry is wary and unease about the extra competition this Trans-Pacific Partnership (TPP) would bring. Abe seems to be committed to join the TPP being negotiated by 11 countries.

Though the opposition DPJ and other smaller parties had united around one thing—the need for Japan to graduate from nuclear power generation, a popular stance in a country badly scarred by the 2011 disaster at Fukushima, Abe’s stance is pro-nuclear stance, and has vowed to switch Japan’s 48 mothballed reactors back on when they have passed rigorous new safety checks. Such a stance did not dampen enthusiasm for his economic trump card.

Abe’s detractors fear Abenomics is a Trojan Horse aimed at securing the hawkish premier enough power to implement his conservative social agenda. They fear this will mean a loosening of Japan’s constitutional commitment to pacifism, a boosting of the military and a more strident tone in already-strained relations with China and South Korea, both of whom have territorial disputes with Tokyo. The hawkish leader told the voters “Let’s revise the constitution in order to create a proud country”, and the meaning of this statement cannot be lost.

A possible revision of Japan's pacifist constitution, especially a section which prohibits the use of force in international disputes except for self-defence, may also be a priority. But pursuing nationalistic policies may cause tension with neighbouring countries. Being a nationalist, Abe is not worried about it, given China’s belligerence and constant threat from North Korea.

(The writer is a visiting fellow at the Institute for Peace and Conflict Studies, New Delhi)

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