The self-proclaimed reincarnation of the Buddha, 53-year-old Tokyo University graduate Ryuho Okawa, said the spirit guide of North Korean leader Kim Jong-il has informed him of the dictator’s plans to nuke Osaka, Nagoya and Tokyo. To prevent this, he said Japan must amend its pacifist constitution and prepare for battle with China and North Korea. To this end, he has founded the Happiness Realization Party, one of several political blocs vying for seats in the House of Councillors in the upcoming July 11 elections.
If you think “Happiness Realization” is a peculiar name for a political party, you should hear the names of several other small political parties that have sprouted around Tokyo these past few months: Shintou Kaikaku or the New Renaissance Party; Tachiagare Nippon, which literally means “stand up, Japan” but is called Sunrise Party in English; and Minna No Tou, which literally translates to “everyone’s party” but uses as its official English name the phrase Your Party. There’s also the Nihon Soshinto, which in English is called The Spirit of Japan. Despite their rather colorful names, however, these parties are being taken seriously by many political observers.
This is partly because, with the exception of the cultish Happiness Realization Party, most of these groups were founded and are being lead by political heavyweights, all of whom used to be stalwarts in the formerly powerful Liberal Democratic Party (LDP). Former Finance Minister Kaoru Yosano, for example, leads Tachiagare Nippon with another former LDP heavyweight, Takeo Hiranuma. The party is supported by the outspoken conservative governor of Tokyo and long-time family friend of President Noynoy Aquino’s, Shintaro Ishihara. On the other hand, Your Party is led by former Minister of State for Financial Policy Yoshimi Watanabe while the president of New Renaissance is Yoichi Mazusoe, a former health minister who until his defection was LDP’s most popular politician.
But more importantly, these small groups are rising in importance because of the increasing number of undecided voters who are seen by many to be unwilling to return the LDP in power on one hand and dissatisfied with the performance of the ruling Democratic Party of Japan (DPJ), which ended LDP’s almost unbroken five-decade rule last year by promising change only to end up bogged down by perceived poor leadership, on the other hand.
Initially, the DPJ recovered from its plunging support ratings when its leader, Prime Minister Yukio Hatoyama, resigned over the Okinawa base row and was replaced by the no-nonsense popular former activist and grassroots organizer, Naoto Kan. But when Kan boldly proposed a ten-percent increase in the consumption tax to address the ballooning national debt, he was greeted with an Asahi Shinbun poll showing a nine percent decrease in his support rate.
Proposing an increase in any tax prior to a general election used to be a political taboo in Japan . But both Kan and LDP President Sadakazu Tanigaki apparently thought that Japanese voters have been spooked by the economic disintegration that occurred in Greece earlier this year and are therefore now open to the idea of raising taxes to address the country’s worsening financial shape.
“Kan ’s adoption of this line of thought is all extremely vexing for his counterpart at the Liberal Democratic Party, Japan ’s long-running stalwart of establishment power. Kan ’s suggestion that nonpartisan debate should take place about raising the tax has infuriated LDP leader Sadakazu Tanigaki, who had hoped to play the fiscally responsible party card himself in this election. In refusing to consider such a nonpartisan approach, Tanigaki now ends up looking churlish,” wrote Japan blogger Paul Jackson on The Diplomat.
Both Kan and Tanigaki, however, seem to be failing to properly play the fiscally responsible party card. Tanigaki’s party lacks credibility as it was under this party’s long reign that Japan was thrust into this financial mess in the first place. Kan , on the other hand, is inclined to present a grand plan that seems to lack solid foundations. Writes Jackson : ” Kan ’s plans to raise the sales tax and achieve a primary balance surplus by 2010 are sketchy to say the least. How will any extra money from the increased consumption tax be used? How will other taxes be changed? How will the regressive nature of the sales tax be mitigated? And when exactly will the tax hike take place?”
In addition, Kan seems to be failing to gain consensus within his own party on the tax increase issue. Ichiro Ozawa, the erstwhile powerful DPJ kingpin and shadow shogun whom Kan dethroned right after his election last month, has openly criticized the prime minister’s tax increase stance.
“The prime minister seems to talk continuously about [raising the tax to ten percent] but out here in the countryside, as compared to the city, the economic situation is severe. If you talk out [in the countryside] about a ten percent consumption tax, for myself this gives me tremendous worries,” Ozawa said during a visit to the northern prefecture of Aomori on June 25.
Ozawa, who led the DPJ to its historic landslide victory last year, is an advocate of DPJ’s expensive populism. He insists that the party should not renege on its campaign promises of free expressway tolls, free high school tuition and monthly allowance from the government for every Japanese child. Kan , on the other hand, believes that the government is not in the position to afford these dole-outs and should focus instead on addressing the country’s worsening financial conditions.
To get Japan’s economy back in shape, Kan said the country must pursue the so-called Third Way and do away with the first two economic strategies that have failed to reverse the continuing stagnation of the Japanese economy.
Kan described the “First Way” as the government investment driven policy of the early LDP governments. This involved massive public spending on infrastructure like airports, ports & railways, and roads & bridges that initially provided employment and encouraged private investments. But although this approach became obsolete after Japan ’s economic bubble burst in the early 1990s, the LDP continued it because it provided its members the reason to grant themselves pork barrel funds which they used to strengthen their political clout in their respective districts. The result was massive and wasteful spending that stretched the government’s resources and exacerbated the public debt.
On the other hand, Kan referred to the ” Second Way ” as the market-oriented reforms that were implemented by the flamboyant Prime Minister Junichiro Koizumi from 2001 to 2006. The Koizumi reforms liberalized the market and allowed firms greater flexibility with regards to labor and employment. The result was sustained increase in corporate profit that was coupled, however, by the end of the Japanese corporate practice of providing lifetime employment, massive lay-offs and the institutionalization of the hiring of temporary workers who received little or no social security benefits. The reforms ultimately led to the “working poor” phenomenon. The working poor are those who are employed but are not earning enough to survive the expensive Japanese standard of living. They are often called Manga Cafe or McDonald’s refugees because most of them are unable to afford housing rents and are therefore forced to seek refuge every night in twenty-four hour establishments.
“If a company implements bold restructuring measures in decisive fashion, and thereby restores its business performance, its chief executive would win acclaim. If, however, we look at the whole country, we find that this policy drove many people from their jobs, made people’s livelihoods even more strapped, and aggravated deflation. The point is that an enterprise can restructure and lay off employees, but a country cannot restructure and lay off its people,” Kan said in his first policy speech in the Diet ( Japan ’s parliament).
Kan’s “Third Way” calls for striking the balance between market liberalization on one hand and labor welfare on the other, as well as between strengthening social security on one hand and addressing the country’s gargantuan debt through tax increases and reduced government spending on the other. These tough balancing acts require bold legislations. And to pursue these bold legislations, Kan would need, as one analyst said, elective dictatorship, or a Diet completely controlled by the Government, which requires a strong DPJ majority in the Diet.
A strong DPJ majority, however, will be elusive for Kan. Right now, the DPJ is hanging on to a razor thin majority in the House of Councillors, and needs the cooperation of smaller parties like the Kokumin Shintou (People’s New Party) and the Social Democratic Party (SDP). Both of these parties have been at odds with the DPJ. The leader of Kokumin Shintou, for instance, recently resigned from the cabinet after Kan rebuffed his demands to postpone the elections and extend the Diet session so his pet bills reversing the privatization of the Post Office would be passed. The SDP, on the other hand, left the ruling coalition after failing to force Hatoyama to move the American base out of Okinawa .
This set-up is most likely to continue if surveys by the relatively DPJ-friendly liberal media are to be believed. In the latest Asahi Shinbun House of Councillor seat projections, the DPJ will end up with the same number of seats it currently has while the projections by Tokyo Shinbun shows the DPJ losing two seats.
These projections are better than the situation in 2007, when the DPJ got its upper house majority and rejected all key LDP legislations from the lower house and led to a parliamentary gridlock that forced Prime Minister Yasuo Fukuda to resign in 2008. But if these projections prove to be accurate, Kan would probably be forced to tone down a bit with some of his Third Way initiatives in order for him to successfully haggle for the support of the smaller parties.
Meanwhile, the opposition LDP, thanks to Tanigaki’s poor leadership and the defection of its popular heavyweights, would likely end up needing the support of small parties too as it is less likely to do well in the polls.
These political realities for the LDP and DPJ give the smaller parties the unique opportunity to be big players in the aftermath of the elections. Both the DPJ and the LDP would be dependent on the support of these microparties to pursue their own agenda. The experienced politicians running these microparties are aware of their tremendous leverage over the two major parties, provided they win some Diet seats in this Sunday’s elections. They would most likely maneuver to get either the LDP or the DPJ to do their bidding instead of the other way around.
Compounding the situation is the fact that, on one hand, these microparties have professed dislike for the LDP and are therefore unlikely to forge a permanent alliance with the main opposition party while on the other hand, most of these groups- with the exceptions of the Communist, Social Democratic and Women’s parties- are on the right side of the spectrum and are thus unlikely to join a coalition with the left-of-center DPJ. Engagement by the DPJ with these microparties, therefore, would most likely be through forging of temporary tactical alliances on certain issues instead of more stable coalition partnerships. In Japanese, this is called barabara rengo or chaotic confederacies.
“We need to observe the situation with a certain amount of caution. None of these new parties will be able to win enough seats to individually make a significant difference,” said Yasuhara Ishizawa, professor of politics and media at Gakushuin Women’s College. “But they definitely will be destabilizing factors”