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Tuesday, Jan. 1, 2013

ROAD AHEAD

Leader stuck without voter mandate

Summer poll to keep Abe in check


Staff writer
First in a series

While nearly 300 Liberal Democratic Party candidates nationwide rejoiced over their resounding success in the Dec. 16 Lower House election, the mood of some at party headquarters was more sober.

The countdown board showing the days leading up to the election was immediately replaced by another reminding them that as of Dec. 17, there were only 223 days left before the terms of half of the Upper House councilors expire.

The LDP's executives are well-aware of history. The party lacks an Upper House majority that won't be easy to acquire come July, but failure to do so could spell disaster for the party and its new Cabinet. Prime Minister Shinzo Abe was forced to step down as prime minister in 2007 after the LDP was trounced in a House of Councilors election.

"We could end up suffering the exact same fate as the Democratic Party of Japan unless we meet the expectations of the people," said Taro Aso, a close ally of the prime minister, in a speech on Dec. 20.

Half of the upper chamber's 242 seats will be up for grabs in the election. For the LDP-New Komeito alliance to win a majority, the ruling camp needs to win 64 or more, including a by-election that will be held in April.

But the coalition hasn't managed to win that many seats since the 2001 Upper House election — when the popular Junichiro Koizumi was LDP chief and prime minister.

What's more, the nation's volatile election trends are frightening the party's leadership. After giving an overwhelming victory to one party, voters swing back to the other side in the following poll.

For example, after Koizumi's ruling coalition won a sweeping victory in the 2005 Lower House election, it only managed to win 46 seats in the 2007 Upper House election.

And following the DPJ's historic victory in the 2009 Lower House race that brought it to power, it only won 44 seats in the 2010 Upper House poll. This left the DPJ presiding over a divided legislature that crippled its ability to govern — a familiar theme in Japanese politics.

"The hurdle might be rather high" for the ruling camp to win a majority in the Upper House election, said Katsuyuki Yakushiji, a Toyo University professor and former political editor at the daily Asahi Shimbun.

Only after winning an Upper House majority will Abe's government be able to become "a full-fledged" administration, he said.

Thus, Abe "probably won't do anything that may bring a negative impact to the Upper House election" and will shelve most of his controversial foreign policy proposals, such as visiting war-related Yasukuni Shrine and revising Japan's official views of its wartime actions, he said.

Until July, the government and ruling camp will be preoccupied with enacting and executing the 2012 supplementary and fiscal 2013 budgets, correcting the unconstitutional vote-value gap, and adjusting social security policy ahead of the scheduled sales tax hike to 8 percent in April 2014, Yakushiji predicted.

"I don't think there will be any big policy change until the Upper House election this summer," he said.

Even if it survives the election, Abe's government still faces a number of challenges, including whether Japan should participate in the Trans-Pacific Partnership free-trade talks and whether to keep atomic power in the nation's energy mix.

It will also face a number of diplomatic and national security issues, notably the territorial rows with China, Taiwan, South Korea and Russia.

In a situation like this, Abe probably won't go too hard at China, Yakushiji said. He expects Tokyo and Beijing to open negotiations on mending bilateral ties, perhaps by separating the territorial and economic issues.

"The true value of Abe's administration will be put to the test at that time," he said.

The first diplomatic event for Abe comes in January, when he travels to the United States to meet President Barack Obama.

Abe is expected to re-emphasize his plans to strengthen the Japan-U.S. military alliance and might mention his intention to change the government's interpretation of the Constitution to allow Japan to exercise the right to collective self-defense in certain emergencies.

But dovish, Buddhist-backed New Komeito is cautious about changing Article 9 and the official interpretation of the pacifist Constitution. The government has long interpreted the supreme code as prohibiting Japan from exercising the right recognized by the U.N. Chapter, which allows a country to attack an enemy state assaulting an ally.

On the financial front, Abe will face tests in March and April.

The terms of two of the Bank of Japan's nine-member Policy Board will expire March 19, and BOJ Gov. Masaaki Shirakawa — the authoritative financial scholar who is apparently not enamoured with Abe's aggressive financial proposals — exits office on April 8.

Abe has been pressuring the BOJ to adopt unlimited monetary easing and to set an inflation target that he believes will end the nation's decade-long struggle with deflation and pull the economy out of its latest recession.

Abe also threatened to revise the BOJ law to terminate the central bank's independence unless it bows to his demands and nominate a new governor who is more amenable to his proposals.

If Abe fails to appoint such a governor and pliable Policy Board minions, voters might question the validity of "Abenomics."

The government can nominate candidates for the BOJ governorship and Policy Board seats, but the Diet must endorse them.

In this case, however, the opposition-controlled Upper House could reject the choices with impunity because Lower House overrides don't apply to BOJ appointments.

Another important day for Abe will come in August, when the Cabinet Office announces its first estimate for first-quarter gross domestic product.

That will serve as a report card on the fiscal and economic measures Abe will push for in the first half. It will also govern the government's decision next fall on whether to hike the sales tax to 8 percent in 2014.

Yakushiji of Toyo University believes 2013 will be particularly important for Japan because the United States, China and South Korea are all set to launch new administrations with stronger political footing than Japan has.

All three — which are key partners and rivals at the same time — will pursue their national interests in fields ranging from trade and diplomacy when they engage Japan.

"If Japan is paralyzed with domestic politics and can't do anything because of the divided Diet, even after the Upper House election, it will create an international environment where Japan will be just ignored by other countries," Yakushiji said. "It's not just a matter of the administration of Abe. Japan is at a crossroads, and one direction is decline."



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