The ruling Democratic Party of Japan (DPJ) faces its first crucial test, after it captured power in August last year, when the House of Councillors election takes place on 11 July. The outcome of the election will have a great impact on the effectiveness of Mr.Naoto Kan who assumed the office of the Prime Minister just last month -- on 3rd June.
Mr Kan, who replaced Mr Yukio Hatoyama under controversial circumstances, would like to use this election to demonstrate his popularity and leadership. One main reason why the DPJ wanted a change of leadership in June was that a large number of its legislators were not confident of winning the Upper House election under the leadership of Mr. Hatoyama and demanded that he be replaced by some other person with a clean image. It was under these circumstances that Mr Kan was elected as his successor.
According to many opinion surveys, at the time of assuming office, Mr. Kan enjoyed about 60% popular support. In his first Policy Speech delivered on 11 June at the Japanese Diet, Mr Kan articulated his views on the need for setting a new agenda for his administration which included an exhaustive clean-up of the government, reviving the economy, strengthening the social security system and a foreign policy based on a sense of responsibility.
As Finance Minister in the previous Hatoyama cabinet, Mr Kan had to wrestle with different economic challenges that the country faced. Now as Prime Minister, he has attached the utmost importance to the revival of the national economy which has remained stagnant since 1990. The common people have lost their self-confidence and are extremely pessimistic about their future. The state of Japan’s public finance is in a critical position thanks to the enormously expensive public works projects undertaken particularly during the 1990s, and the huge increase in social security costs due to ageing society.
According to Mr. Kan, a new third approach is needed to lift the confidence of the nation. What does he mean by the third way? It is a package of measures that addresses issues of economy, public finance and social security in a comprehensive manner. According to him, under the first way, the focus of the economic policy is centered on public works and this suited the needs of Japan during the 1960’s and 1970’s. But it has contributed to the accumulation of huge fiscal deficits in recent years. The second way is grounded in too much of market fundamentalism. This has created a great degree of instability in the lives of the common people. The third way consists of measures that would ‘resolve the impasse’ that has long frustrated the Japanese people since the early nineties. The third way, as a policy, aims to turn the problems affecting the economy into opportunities for creating new demand and employment and link them into new forms of growth.
The election manifesto that the DPJ has released is a lengthy recitation of its achievements as the ruling party since last September. It also holds out numerous promises to the electorate in terms of what it proposes to do after the Upper House election: achieving a strong economy, promoting human resources, encouraging regional development, building a strong social security system, etc,.
Since Japan’s public debt level is almost equal to 200% of its GDP, political parties inevitably have to think of mobilizing revenues through tax increases to mitigate the problem. Mr Kan has stated that he will increase the current consumption tax level to 10%. The main opposition party, the Liberal Democratic Party ( LDP ), has also proposed to raise the consumption tax to 10% , but assures that the new tax revenue will be spent for enhancing the social security benefits. .
The LDP says the DPJ does not have clear cut ideas as to how it will spend the additional revenues. The question of enhancing the consumption tax has become one of the focal points of the present election campaign. According to reports dated 5th July, the approval rate for Mr Kan has come down to 39% -- a steep fall of nearly 21% in just over a month – because of his handling of the tax issue.
On foreign policy, the DPJ has come to terms with the realities of the situation. It considers that security alliance with the US forms the cornerstone of Japan’s foreign policy. On the controversial Futenma military base, it agrees to carry out the terms of the understanding signed with the US in the last week of May 2010. While it will formulate its new national defence policy guidelines before the end of the year, it will promote security cooperation with countries like India, Australia and South Korea. On China, it seeks to strengthen ties with Beijing, but it will also look for greater transparency in China’s military spending. The DPJ has also reiterated its strong support to the building of an Asian Community.
Why this election is crucial for the DPJ
The House of Councillors has a total number of 242 seats and one half of the members are elected once in three years. Though less powerful than the House of Representatives, the Upper House can delay legislative bills and cause serious embarrassment to the ruling party. The LDP lost its majority in the Upper House after 2007 election and it created a deadlock in the legislature which ultimately resulted in the resignation of Prime Minister Yasuo Fukuda in 2008.
Today, the DPJ has a massive majority in the Lower House, but its position in the Upper House is still very delicate in the sense that it had a slender majority with the support of the Socialist Party of Japan (SDP) and the People’s New Party. Since the SDP has left the coalition, the DPJ does not have the majority strength now. The DPJ therefore considers the present election as a good opportunity to achieve on its own an outright majority in the House.
Presently, it holds 116 seats and 54 of them are recontested. If it wins 60 seats in the present election, it will achieve a single party majority in the House. It is possible, but quite difficult. In order to save his face, Prime Minister Kan should at least ensure his party’s victory in 54 seats. But just as the DPJ is keen to gain a majority in the House, opposition parties like the LDP and the New Komeito are equally bent on blocking its path. If the DPJ fails to have a working majority in the House either singly or in alliance with another party, it will have the same frustrating experiences which Mr Fukuda had not very long ago. Not only that, it will seriously damage the credibility of Mr Kan.
Prof. K.V. Kesavan is a Distinguished Fellow at Observer Research Foundation.
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