Japan’s election: Divided Democrats prepare for office

By John Chan
7 September 2009

The Democratic Party of Japan (DPJ) won a landslide victory in the country’s general elections on August 30, ousting the Liberal Democratic Party (LDP) that had held power for most of the past 55 years. Yet despite its overwhelming majority in the lower house and control of the upper house, the next government will not be in a strong position.

Democrat leader Yukio Hatoyama won the election by capitalising on widespread hostility to the LDP over rising unemployment, deepening social inequality and its support for the US wars in Iraq and Afghanistan. However, the outcome was not a vote of confidence in the Democrats, but a vote against the LDP. As a result, Hatoyama, who will be installed as prime minister on September 16, will inevitably face popular opposition as even the limited expectations in the new government are dashed.

Hatoyama presides over a makeshift party that he helped found in 1998 from breakaway factions of Liberal Democrats and right-wing groupings from the Japanese Socialist Party (JSP). The breakup of the LDP began in 1993 in response to the end of the Cold War and Japan’s worsening economic crisis. Former LDP groupings formed a short-lived coalition with the JSP in 1993, which ended the following year when the Socialists joined the Liberal Democrats in a grand coalition up to 1996.

The divisions inside the DPJ were underscored by Hatoyama’s appointment last week of right-wing strongman Ichiro Ozawa to the powerful post of party secretary-general. Hatoyama told the media: “We need to make sure that the two wheels of decision-making in the party and the government turn properly.” However, far from ensuring smooth functioning, the appointment sets the stage for bitter internal infighting as Ozawa uses his position to determine policy.

Ozawa has been dubbed in the media as the “Shogun”—the real power behind the throne. He merged his own Liberal Party with the Democrats in 2003 and is widely credited with masterminding the DPJ’s victory in the upper house elections in 2007. He was forced to stand down as party leader earlier this year over a political funding scandal, but continued to preside over the party’s election campaign behind the scenes.

According to the Nikkei newspaper, Ozawa’s factional strength more than doubled as a result of the election win from 50 to 120. By contrast, Hatoyama’s faction only increased from 30 to 45. Within the party’s conservative political framework, Ozawa and another former LDP faction (previously the Sakigake Party) form the “right”, two former Socialist Party factions comprise the “left”. The factions of Hatoyama and former DPJ leader Naoto Kan occupy the middle ground. There are also two more smaller factions.

As one Democrat told the Sydney Morning Herald: “Don’t think of the DPJ as a political party. You’d better think of it as a project to overthrow the LDP, which has such a long history in government and was very difficult to topple.” He then added: “We didn’t have enough time to think about the future. We focused so much on the LDP and not enough on our own policies.”

Hatoyama and Ozawa both began their careers as traditional LDP politicians. The wealthy Hatoyama family is sometimes likened to the Kennedys in the US. His great grandfather Kazuo Hatoyama was the Lower House spokesman in the 1890s. His grandfather, Ichiro Hatoyama, was prime minister in the period 1954-56 and presided over the formation of the LDP. His mother’s father founded Bridgestone Corporation, the world’s largest tyre manufacturer. Hatoyama took over his father’s seat in 1986, but quit the LDP in 1993. His brother, Kunio Hatoyama, was a minister in the defeated LDP government until June this year.

Ozawa inherited his father’s parliamentary seat in 1969. He followed the path of a typical LDP parliamentarian, getting involved in the construction industry and learning his political infighting skills from LDP factional boss Kakuei Tanaka. Like others, however, he rebelled against the party in 1993, concerned that it was incapable of meeting the new challenges posed to the Japanese ruling class. Ozawa’s primary concerns have been to promote a new more aggressive foreign policy and to get into office.

The Democrats assume office amid the deepest global recession since the 1930s, which has already hit Japanese exports and the economy hard. Unemployment is at a postwar high and poverty and homelessness are rising. Young people have been particularly affected as companies have laid off part-time temporary workers.

Hatoyama’s main appeal to voters was a call for “change”. The party made a series of limited election promises to provide child allowances, axe road tolls, change the labour laws to protect workers, assist farmers and provide free school education. However, as business leaders and economic commentators are already pointing out, the next government’s options are severely constrained by Japan’s huge public debt that amounts to 170 percent of GDP—the highest of any industrialised country.

While Hatoyama criticised US-style financial fundamentalism in the course of the campaign, key figures within the party are strong advocates of pro-market reform. Prior to the eruption of the global financial crisis last year, the Democrats criticised the LDP for insufficient economic restructuring. Inside the party, Ozawa has been an advocate of rural protectionism, while market reformers such as Naoto Kan advocate a further opening up of the Japanese economy at the expense of farmers.

The Australian Financial Review last week noted the contradictions: “The DPJ initially seemed inclined to break away from protection and high food prices by supporting limited income support to farmers. But then former leader Ichiro Ozawa saw the opportunity to steal a traditional LDP constituency with blatant farmer handout and limits on land-use reforms.”

During the election campaign, the DPJ declared that it would pay for its promises by eliminating the LDP’s pork barrel programs for rural areas and bureaucratic waste. However, to reform the agriculture ministry and axe LDP handouts will only antagonise voters in regional areas and threaten an internal brawl in the Democratic Party.

Last weekend, Hatoyama appointed Naoto Kan as deputy prime minister and head of the national strategy bureau, a new body to oversee the reform of the country’s powerful state bureaucracy. Kan visited Britain in June to study the devolution of power to Scotland and Wales, as a model for decentralisation in Japan. To make any significant savings, any “reform” of the bureaucracy will have to make deep inroads into public sector jobs.

The DPJ’s foreign policy is also riddled with contradictions. In 1993, Ozawa wrote his bestseller, Blueprint for a New Japan, which advocated a more aggressive international role corresponding to Japan’s economic power, including a permanent seat on the UN Security Council and an end to the constraints of the so-called pacifist clause of the Japanese constitution. In 2002, he said that Japan should consider making nuclear weapons to counter China’s military buildup.

The DPJ web site declares that the Blueprint for a New Japan is the basis for its policies. But his outlook has never been fully accepted inside the party, especially by the former Socialist members. Ozawa’s calls to end the constitutional limitations on the military has already come into conflict with their opposition to any change to the pacifist clause. The issue was a major reason behind the decision of the Socialists to quit the coalition government in 1994.

In 2004, Ozawa reached an uneasy agreement with Yokomichi Takahiro, head of a former Socialist Party faction, to maintain the pacifist clause as a central plank of DPJ foreign policy. None of these issues has been resolved, however. The lack of foreign policy was underscored when the new US secretary of state, Hillary Clinton, visited Japan in February. Ozawa, then party leader, initially declined to meet with Clinton, saying the party had no foreign policy.

Japan’s relations with the US will also be a contentious issue. The Socialist Party had a long record of opposing the US-Japan Security Treaty and calling for a more independent policy. The LDP, however, always backed the Cold War alliance with Washington to the hilt. To appeal to antiwar sentiment during the election, the DPJ promised to end Japan’s naval refuelling mission in support of the US war in Afghanistan. Hatoyama and other senior Democrats, however, are already reassuring Washington that there will be no sudden foreign policy shift.

Writing in the New York Times on August 27, Hatoyama declared that US-Japan alliance would remain the cornerstone of the next government’s foreign policy. But, he added, US dominance “is coming to and end and that we are moving toward an era of multipolarity”. He pointed to the need for Japan to play a more active role in Asia, proposing the formation of an East Asia Community and a single Asian currency. Former party leader Katsuya Okada, who is mooted as the next foreign minister, told Agence France Presse last month: “It will be the age of Asia, and in that context it is important for Japan to have its own stance, to play its role in the region.” How aggressively the next government asserts a role for Japan in Asia is likely to lead to sharp internal divisions.

While Hatoyama is sometimes likened to John Kennedy, the more apt comparison is with the current US president. Like Obama, Hatoyama has come to power on vague promises of “change” to implement policies on behalf of the political establishment that will be intensely unpopular. As opposition emerges, so will the deep factional divisions within the government and the Democratic Party.