After the Election: Will Japan be Different?

Shoichi Itoh
Shoichi Itoh Senior Researcher - Institute of Energy Economics, Japan

September 14, 2009

The general election for Japan’s House of Representatives on August 30 was a watershed in post-War Japanese history. The Democratic Party of Japan (DPJ) swept the Liberal Democratic Party (LDP) from power by winning 308 seats out of 480 in the House of Representatives, the Lower House in Japan’s bicameral Diet. The DPJ’s performance was a 168 percent improvement over its performance in the previous election, and the party will form a Cabinet under its leader, Yukio Hatoyama. The LDP lost its simple majority in the Lower House; it lost its majority once before, in 1993, but it remained the dominant force in Japanese politics and was back in power after 11 months. This time, however, the voters dealt a more decisive blow to the LDP, decreasing its seats from 300 to 119.

Change Japan can believe in?

There is no doubt that the electorate’s prolonged aggravation over the national economy was a major reason for the LDP’s historic defeat. The slow pace of economic recovery from the “lost decade” of the 1990s was crushed by the current global financial crisis. The average annual growth rate of the real gross domestic product (GDP) was 1.5 percent in the first seven fiscal years of this century. In fiscal 2008, however, GDP fell as low as – 3.2 percent, and gross national income and domestic demand contracted by 4.0 percent and 2.1 percent, respectively. The annualized growth rate of the real GDP in the first quarter of 2009 post-War low of –15.2 percent. The announcement of a turnaround of the national economy at the last minute before the election could not reverse the LDP’s unpopularity at all. Under such conditions, any ruling party and leader in a democratic system would expect to be tossed out of power in an election.

But the faltering economy was just a part of the people’s frustration which the DPJ rode to power. The LDP continued to ignore all sorts of festering issues such as the wasteful use of tax revenue by the mammoth bureaucracy; the endless accumulation of government debt which at about 9 trillion dollars is the world’s worst debt-to-GDP ratio; the falling birthrate and aging population; the reform needed in the pension and healthcare system; and others. In addition, the nation was clearly fed up with frequent turnover in the Kantei or Prime Minister’s office – there have been three new Prime Ministers since the Koizumi cabinet resigned in September 2006, all without a Lower House election.

The LDP’s mandate to lead Japan had ended. According to a public telephone poll conducted nationwide by Asahi Shimbun right after the election result came out, 81 percent of respondents claimed that the main reason for the LDP’s defeat was a simple desire for regime change; indeed, the majority did not believe that the DPJ’s proposed policies were credible, and 76 percent expressed hope that the LDP will rebound as the opposition party.

But there is public euphoria and widespread hope that “something may change.” The new ruling party’s leader, Yukio Hatoyama, is highly popular in the wake of the DPJ’s victory, with favorable views reaching 71 percent according to Kyodo News. The party’s rhetoric during the campaign emphasized the LDP’s poor performance. Voters did not necessarily regard the DPJ’s promises of building a bigger government, improving the economy and social welfare system, and pursuing full-scale reform of the existing policy-making structure between the Diet and the bureaucrats as an alternative picture of Japan’s future. They accomplished their biggest aim when regime change took place.

And because national expectations are so high at the outset, the DPJ could easily disappoint the electorate unless it quickly presents clear differences from the LDP-led ancien regime. Already, both the LDP and media have severely criticized the DPJ’s plans for and economic stimulus and social welfare reform as yet another type of pork-barrel politics, and unfunded ones at that. In any event, tangible results of these policies will not appear for some time, and the public may not be patient.

Reform of the policy-making process is one of the most pressing issues facing the DPJ, and it may have the most far-reaching effects. The Democrats have emphasized that the LDP had to be toppled in order to end collusion between the bureaucracy and the LDP politicians, which often produced policy gridlock at best and poor policy at worst. In this regard, popular anger today is directed not only toward the LDP, but also toward the government bureaucracy – civil servants who form the permanent staffs of the various ministries – and what the DPJ portrayed as its self-interested monopoly on power. The DPJ plans to increase the prime minister’s role in the policy-making process, and its signature plan for doing so is the creation of a National Strategy Bureau (NSB). This agency will be under the prime minister’s direct control and will develop the government’s policies across the full range of issues and facilitate their implementation.

There are many uncertainties about the NSB, including staffing, autonomy, and authority. If the NSB – and therefore the prime minister – prove to be ineffective, the electorate will become extremely disillusioned and a cycle of landslide electoral victories by one side and then the next may develop and could damage the development of Japan’s embryonic two-party system.

If the LDP can correctly read the people’s expectations for emergence of a real functional two-party system and its return as an alternate ruling party in the future, the LDP has a good opportunity now to take time to build a new policymaking structure of its own as an alternative to the DPJ’s NSB. In addition to conceptualizing a new policy process, the LDP should begin recruiting young new talent to form a candidate pool for future political appointments. If the LDP fails in doing this, Japan’s tradition of policy-making controlled by the bureaucracy and the ruling party – often to the detriment of the prime minister – will remain entrenched.

More independent diplomacy?

In a now-famous op-ed, published on the eve of the election on the New York Times website, Yukio Hatoyama noted on one hand that the U.S.-Japan security pact would remain the cornerstone of Japanese diplomacy but on the other hand called for Japan’s political and economic independence from the United States which is “fighting to retain its position as the world’s dominant power” and China which is “seeking ways to become dominant.” Hatoyama’s statement supplmented his party’s election campaign manifesto which advocated building “a close and equal U.S.-Japan relationship” by developing “an autonomous foreign policy for Japan” and re-examination of the ongoing realignment of U.S. military forces and bases in Japan. The DPJ’s general foreign policy stance is often characterized and seeking to move closer to China and becoming more independent of the United States.

The strategic ambiguity and lack of logical coherence with regard to the Democrats’ view of Japan’s relationship with the United States and China have been widely remarked on by experts and media reports. For one thing, while voters were concerned exclusively with domestic challenges in this election, the Democrats took a shot to differentiate themselves from the LDP in the field of foreign and security policy – and they did so to an unnecessary degree. For another, the DPJ’s stated vision of Japan’s external relations is far more divided internally than that of the LDP; the party’s leadership is a mere amalgamation of ex-LDP defectors, social democrats, and leftists who originally came from the defunct Socialist Party of Japan (although many newcomers to the DPJ’s Diet caucus, accounting for about half of the DPJ’s winners, are pragmatic rather than ideological younger politicians). Although Hatoyama afterward insisted that the English-language translation of his article did not accurately represent his full position, the incident ironically illustrated a part of the DPJ’s inside story. If the new ruling party makes a proactive effort to refine Japan’s foreign and security policies, it would serve only to highlight the “salad bowl” nature of the party’s ideology.

Interestingly, the New York Times article encountered harsher criticism in Japan than in the United States. According to a national public opinion poll conducted by the Cabinet Office in December 2008, 73 percent of respondents have a sense of affinity to the United States, whereas only 32 percent feel close to China. While it is true that Japanese left-wing intellectuals took advantage of the recent financial crisis to fuel anti-American sentiment, they can never be the majority in society. After its electoral victory, one of the DPJ’s first tasks was to seek to correct the widespread image held both in Japan and abroad of its ambiguous approach to the U.S.-Japan relationship by reaffirming importance of consolidating its bilateral ties. Meanwhile, it is also premature to conclude that the DPJ will be more accommodating toward China than the LDP. Just as LDP members are never unanimous in regard to their perception of China’s rise, as indicated above the DPJ has both doves and hawks on China, including Taiwan issues.

It seems that American policy makers and academics generally agree that there is a limited range of policy alternatives available to either the DPJ or the LDP at this stage. Despite the DPJ’s initial rhetoric of reducing Japan’s dependence on the United States moving closer to China, virtually no serious anxiety about drastic changes is heard in Washington. First, Americans understand that regime change is politically healthy in a democracy. It was rather unusual that the LDP held power more than half a century. Second, the new government’s diplomatic options are clearly constrained due to concern among the Japanese public about the rise of China and North Korea’s nuclear development. Washington’s basic approach to the new Japanese government is to just wait and see, knowing that the technicalities of regime transition take some time and that statements induced by pre-electoral campaign fever will be adjusted as they are translated into actual policy.

Many in Japan are less sanguine about the recent change of power in Washington. Ever since the Obama administration came into office in January 2009, intellectuals, bureaucrats, and journalists in Japan have speculated incessantly about a possible change in Washington’s priorities in East Asia, with China allegedly replacing Japan as the U.S.’s priority. Tokyo’s anxiety was not relieved by the Secretary of the State, Hillary Clinton’s remark during her visit to Japan in February 2009 (her first visit to a foreign country as Secretary of State) that “the U.S-Japan alliance is a cornerstone of American foreign policy.”

However, the most fundamental question the Japanese must ask themselves today is not whether Japan may be left behind, but what can Japan do to exert its own strategic leadership based on its geopolitical position and economic potential and clarify its regional and global responsibilities beyond merely donating money and aid to international organizations and foreign countries without a strategic grand design. The consolidation of the U.S.-Japan alliance would provide more policy options for Tokyo in tackling a variety of uncertainties with Beijing. Simultaneously, improvement of Sino-Japanese partnership would widen the range of international issues on which the United States and Japan can collaborate closely. The LDP lacked a clear vision for systematically factoring both the United States and China into Japan’s diplomacy and the DPJ is also unprepared, so far, to handle this conundrum.

In this regard, the new government could and should make a special effort to lead international negotiations over climate change. The Kyoto protocol left Japan with an unachievable target for reducing greenhouse gas (GHG) emissions while no obligation was imposed upon such a large emitter as China and the Bush administration did not ratify the international agreement, so a sense of victimization gradually prevailed in Japan. Taro Aso, the outgoing LDP Prime Minister, failed to exert strong political leadership (yielding to pressure from the bureaucracy, his own party, and the business community) as the framework for the December 2009 Copenhagen Convention developed, and Japan was given a limited voice in the planning. This timidity, coupled with weak emissions reduction goals announced by the Aso government – 8 percent reduction based on 1990 levels – implied that Japan had become more inward-looking than a decade ago and was less willing to use its expertise as the most energy efficient and environmentally-friendly country to lead the world in reducing emissions.

In the meantime, U.S.-China bilateral talks on climate change continue to develop at official and unofficial levels. It is of high importance that Washington and Beijing have increasingly found common interests in tackling this issue. They are approaching it as far more than a mere question of a post-Kyoto scenario for reducing GHG emissions, but have expanded the discussion to the fields of energy security, including reducing oil dependency. It is not an exaggeration to say that the energy security paradigm of the 21st century will be framed largely by agreements between the U.S. and China – the world’s biggest energy consumers and GHG emitters. Japan, which is the third biggest oil consumer and has achieved the world’s most advanced energy-saving technology and know-how, should have demonstrated more leadership by now and should work more closely, in a trilateral format, with the United States and China. But such a strategy is yet to be seen in Tokyo.

One of the DPJ’s pre-election promises included raising Japan’s GHG emissions reduction target to 25 percent by 2020 (compared with the LDP’s 8 percent proposal). Hatoyama publicly endorsed the 25 percent figure again after the election. The ways in which the new government pursues emissions reduction negotiations with Beijing and Washington, with an aim to set an internationally and domestically acceptable goal, and introduces related domestic measures will be a touchstone in assessing whether a “new Japan” may have a more independent and creative voice in international society. More importantly, it may also indicate whether the DPJ can overcome the LDP legacy of relatively weak prime ministers and increase the party leader’s authority over the policy-making process.