Election 2012: The People’s Verdict, Abe’s AgendaPolitics Economy
On December 16 Japan held a general election for the House of Representatives, the lower house of the National Diet. As had been expected, the Liberal Democratic Party, which lost power three years ago, emerged victorious this time. The LDP achieved a sweeping victory, taking 294 of the 480 seats in the chamber. Adding the 31 seats won by the New Kōmeitō, its long-time ally, gives a total of 325, a supermajority of more than two-thirds. The ruling Democratic Party of Japan suffered an utter rout, going from 230 seats before the election to just 57 after. The party members who lost their seats included Chief Cabinet Secretary Fujimura Osamu and seven other cabinet members, along with DPJ Vice-President Sengoku Yoshito. The drastic swing in the fortunes of the two biggest parties was amplified by the current electoral system, in which 300 of the members are chosen from single-seat constituencies. Among the many other parties in the race, a newcomer, the Japan Restoration Party, made the strongest showing, coming in third with 54 seats.
As LDP President Abe Shinzō (who will soon succeed the DPJ’s Noda Yoshihiko as prime minister) declared after the votes were counted, the Liberal Democrats’ big win does not mean that the LDP has regained the confidence of the electorate. I believe that the main cause of the outcome was the severe disillusionment voters felt toward the DPJ after seeing it govern for the past three years. That said, I also believe that the public wants to see the LDP exercise conservative pragmatism.
Practical-Minded Public Verdicts on Nuclear Power and the Consumption Tax
The major issues in the election campaign this time included the future of Japan’s nuclear power program, the consumption tax hike, participation in the Trans-Pacific Partnership, and reliance on public works. Voters effectively made choices on these matters, and we can see what they chose by looking at the positions espoused by the parties that were defeated.
Three parties came out with almost indistinguishable stances on the above issues. The Tomorrow Party of Japan, Japanese Communist Party, and Social Democratic Party all opposed continued reliance on nuclear power, the planned consumption tax hike, the TPP, and increased public works. The Tomorrow Party, which had 61 seats before the election, won just 9 seats, the Communists slipped from 9 to 8, and the Social Democrats fell from 5 to a mere 2. These parties were nostalgically calling for a return to the Japan of the 1960s and 1970s, but the voters clearly indicated that they considered this to be an unrealistic option.
In that sense, we can say that the overall direction with regard to the above issues has been decided. What remains is the question of what specific policies the new administration will adopt. The LDP made a campaign pledge to come up with a “best mix” of electric power sources for Japan within 10 years, while reactivating nuclear power plants that are pronounced safe by the Nuclear Regulation Authority. This is a welcome prospect. In view of the shale revolution that is now underway, it is sensible to spend 10 years or so formulating a new energy mix, and of course it is appropriate to reactivate nuclear plants whose safety has been confirmed.
As for the consumption tax hike, this was enacted in 2012 on the basis of a three-way agreement among the DPJ, LDP, and Kōmeitō. The law in question includes a clause providing that the final decision on implementation of the increase from 5% to 8% scheduled for April 2014 will be made after observing economic conditions in April–June 2013. So the new administration can be expected to put together a large-scale supplementary budget containing appropriations that will take effect quickly so as to stimulate the economy between now and next spring. This too will be welcome.
TPP: The Need for Trade Liberalization and Structural Reform
The problem is the LDP’s stance on the Trans-Pacific Partnership. As part of its campaign platform, the party declared itself “opposed to participation in TPP negotiations as long as they are predicated on the elimination of tariffs without sanctuary [without exceptions].” This is an evasive and unclear position to take but at least it is not a flat rejection of the TPP. The negotiations on this broad free trade pact will be in full swing by early 2013. It is also expected that the United States and the European Union will soon start negotiating on an economic partnership agreement that would create a free trade area encompassing an area accounting for nearly half of the world’s gross domestic product. If the LDP is to make good on another plank in its platform, the pledge to “win back the ¥50 trillion of lost national income,” it is essential that Japan move forward with trade liberalization and structural reform. Furthermore, not taking part in the process that will determine the trade rules for the twenty-first century in the Asia-Pacific region is not a viable national strategy for Japan. I hope Abe will show leadership in addressing this issue.
Abe is expected to establish a cabinet task force to revive the economy, including panels devoted to industrial competitiveness and international economic strategy, and he reportedly plans to reactivate the Council on Economic and Fiscal Policy. The DPJ had the idea of establishing a National Policy Bureau that would be responsible for economic and other types of policy, but this did not come to pass; meanwhile, the CEFP was left dormant. The Democrats also talked about revamping the Council for Science and Technology Policy, but in fact they did nothing in this connection, neglecting policy for scientific and technological innovation. (On November 9 the cabinet finally adopted a decision on reforming this council, and the government submitted a bill for this purpose to the Diet, but the proposed legislation died when the House of Representatives was dissolved.) Unlike the DPJ administrations of the past three years, which have announced new growth strategies every year, I hope the new LDP administration will come up with a solid, long-term growth strategy package made up of coherent components covering areas including energy, external economic relations (including the TPP), innovation, and deregulation.
Hoping for Conservative Pragmatism from the Abe Administration
The media in South Korea and China have been voicing alarm that Japan is “turning right,” and similar opinions can also be found in the Western press. I do not share this concern myself, but I do hope that the conservatism of the new administration will be tempered with pragmatism. I agree in principle with the idea that the Constitution should be revised (as Abe advocates), but I do not think that now is the time to do so. Meanwhile, we see no prospect for settlement of the Senkaku Islands problem (or of Japan’s territorial disputes with South Korea and Russia) anytime in the foreseeable future. Though the course of developments henceforth will depend in part on China’s actions, what our country needs to do at this point is to calmly enhance the capabilities of our Coast Guard and Maritime Self-Defense Force so as to firm up our effective control over the Senkakus, work at convincing the international community of the legitimacy of our position on this matter, and at the same time look for ways to contain this issue and if possible shelve it so that it does not poison economic and other relations with China.(Originally written in Japanese on December 17, 2012.)
Self-Defense Forces Shiraishi Takashi consumption tax politics Diet nuclear power economy DPJ LDP general election Growth strategy New Kōmeitō Social Democratic Party House of Representatives Japan Restoration Party Japan Coast Guard dipolomacy Tomorrow Party of Japan Communist Party of Japan public works economic policy right wing territorial issues conservatism