JAPAN: Koizumi landslide boosts cause of reform

Analysis

In yesterday's general election the Liberal Democratic Party (LDP), led by Prime Minister Junichiro Koizumi, won 296 of the 480 available seats, which gives it a majority in the lower house (Diet) -- the first time a single party has held such a majority for over 15 years. With its coalition partner, Komeito, it now controls 327 seats, well over the two-thirds it would need to pass constitutional reforms and/or override opposition in the House of Councillors. The main opposition Democratic Party of Japan (DPJ), which was confident that it could dislodge the LDP from power, has suffered a damaging defeat.

Single issue election. The refusal of the House of Councillors -- more specifically a small group of LDP members of this house -- to support a bill to privatise the post office precipitated the election (see JAPAN: Koizumi stands or falls on vote - August 3, 2005). This has been a key project since the 1990s for Koizumi, who regarded it as the first step towards a fundamental reform of government:

• Koizumi tried, largely successfully, to make this a single-issue election. By focusing on the issue of the post office, Koizumi and his ministers were able to project an image of the LDP as the party of reform and the DPJ and others as seeking to prevent it.
• The DPJ tried to argue -- unsuccessfully -- that there were many other serious political problems facing Japan -- a permanent seat on the UN Security Council, pension reform, demographic issues, constitutional reform -- which needed to be discussed and were unrelated to post office privatisation.

Turnout was 65.5%, over seven percentage points up on last time:

• The LDP's main successes were to win over a large proportion of uncommitted voters, who previously had tended to support the DPJ, and to capture or re-capture its electoral support in urban areas.
• For example, of the 71 single-member constituencies in the area immediately surrounding Tokyo, the LDP won 63 seats to the DPJ's five, compared to 36-33 in the 2003 general election.

Reform approval. A special session of the Diet will be held on September 21. This normally only selects the prime minister, but Koizumi has indicated that he will use it to secure parliamentary approval for a slightly revised version of the post office privatisation bill (see JAPAN: Will postal reform aid financial flows? - August 22, 2005). The House of Councillors is not likely to cause problems this time. The leader of the LDP rebels there has already indicated that he will support the bill. When both houses approve the reform, probably in mid-October, Koizumi will re-shuffle his cabinet and change the LDP's senior personnel.

The LDP's manifesto talked of aiming at 2% GDP growth per year, with a series of measures to support growth and technological development. However, it is likely to be below this figure in the absence of significant reform (see JAPAN: Business spending drives 1.4% GDP growth - August 12, 2005). Koizumi has also announced he will not increase consumption tax though the manifesto did promise to introduce some basic tax reforms by fiscal 2007.

LDP leadership. While Koizumi's authority as LDP leader has been strengthened by yesterday's election result, his term of office as party president only has twelve months to run:

• In the run-up to the election, there were some in the party who wanted to see his term extended in the event of a major victory.
• However, Koizumi has indicated he will not seek to extend his term and has urged the LDP to seek a successor able to build on his reform agenda.

This was perhaps the first Japanese election fought on the basis of policy rather than personality. Both major parties had detailed manifestos covering most significant political issues. Nonetheless, Koizumi and the LDP focused on a single issue, and Koizumi's personality was at the forefront of electoral choice. The LDP had a manifesto of 120 promises, but they were all single sentences, most were vague and two key issues -- namely Japan's bid to become a permanent member of the UN Security Council and increasing consumption tax -- were not mentioned.

DPJ crisis. The DPJ faces a difficult future:

• Last year, it won a majority of seats and votes in the House of Councillors election (see JAPAN: Election result boosts two-party evolution - July 13, 2004). Yesterday, it won only 52 seats in single member districts, one-quarter the number won by the LDP. Its leader, Katsuya Okada, has indicated that he will resign.
• This defeat may be so severe that the party will split (see JAPAN: Factionalism threatens DPJ future - September 14, 2004). However, the two parties between them won 271 of the 280 single-member seats, and in the other nine districts the Komeito candidate had LDP support. The party political structure is moving, or perhaps has already moved, towards being a two-party system. Electoral considerations are likely to ensure that the party remains united.

Constitutional reform. Koizumi will attend this week's UN sessions in New York secure in his government's mandate. He will be able to claim strong domestic support for Japan's case for a permanent seat on the Security Council.

Koizumi has said that he will not try to introduce reform of the constitution during his remaining time in office. Nonetheless, the LDP proposals for constitutional reform will be published in November, and this fundamental issue is likely to dominate subsequent domestic political debate (see JAPAN: Constitutional debate goes beyond defence - March 2, 2005). If a deal can be done with Komeito, the two parties between them will have the two-thirds support in the Diet to secure approval, despite opposition in the House of Councillors. In this respect, this coalition partnership remains important because the LDP does not have a majority in the upper house.

Foreign relations. Relations with Japan's neighbours are unlikely to change:

• The LDP manifesto promised to improve and strengthen relations with South Korea and China and cooperate to facilitate Asian unity. However, Koizumi may interpret his election victory as endorsement for his periodic visits to the Yasukuni shrine, which arouse hostility in China and Korea.
• It is likely that he will visit North Korea at some time in the next twelve months to try to resolve the issue of kidnapped Japanese nationals.
• Washington, which has sought closer security ties with Japan in part to counter China's growing influence in the region, will be pleased with the scale of Koizumi's victory.