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    Japan
     Dec 23, 2006
Page 3 of 5
Challenges ahead for premier

By Hisane Masaki

be in a stronger position to push through his most potentially explosive agendas - a constitutional revision and a hike in the broad-based consumption tax.

After the Upper House poll, there may be no national election until late 2009. The current Lower House members were elected in September 2005 for a four-year term. Unless the House of Representatives is dissolved early for a general election, its



members will not face re-election until September 2009. Meanwhile, after the Upper House election in summer, no election for that chamber will be held until 2010.

At present, the LDP-New Komeito coalition has a majority of 136 seats in the 242-seat House of Councilors, with 112 held by the LDP and 24 by New Komeito. The biggest opposition DPJ has 80 seats, and the rest are held by smaller parties and independents.

It appears almost certain that the LDP-led coalition will lose some seats in the Upper House election. Therefore, the focus of attention will be whether the coalition will be able to retain its majority in that Diet chamber.

Up for grabs in the next election are half of the chamber's 242 members elected in the summer of 2001, soon after Koizumi took the helm of the LDP and government. In that election, the LDP won big amid the "Koizumi fever" among Japanese voters. The then-tripartite coalition of the LDP, New Komeito and the now-defunct Conservative Party boosted its strength in the Upper House to 138 seats. The LDP alone won 64 seats, more than half of the seats up for re-election.

In the last Upper House election in the summer of 2004, however, the LDP-New Komeito coalition failed to win a majority of the 121 seats contested, gaining 60 seats. What was more shocking for the LDP - and for the then LDP secretary general, Abe, in particular - in that poll was that the party won only 49 seats, significantly down from 64 in the 2001 election and even fewer than the 50 seats the DPJ won.

Abe is widely believed to be determined to begin addressing the issue of constitutional amendments - probably his biggest political agenda - in earnest after the Upper House election.

In the autumn of 2005, the LDP adopted its draft of a new constitution to replace the current war-renouncing, pacifist constitution, written by the US occupation forces soon after Japan's 1945 defeat in World War II. Establishing a "self-imposed constitution" has been the LDP's credo since its 1955 founding. But this was the first time the LDP had actually proposed a new constitution in writing.

The LDP draft calls for rewriting Article 9 to acknowledge clearly the existence of a "military for self-defense". It also calls for more active participation in international peacekeeping activities. The current constitution is widely interpreted as forbidding the possession of a military. In reality, Japan has about 240,000 SDF troops and one of the world's biggest defense expenditures. Successive governments have explained away the contradiction by claiming that the SDF is not a military but a kind of police force.

Abe, a staunch advocate of constitutional amendments, has said he will seek to have amendments realized within five years. It remains to be seen, however, whether the supreme law can be revised while he is in office. Under Article 96, any amendments must be proposed with support of two-thirds or more of both houses of the Diet and then be approved in a national referendum with a simple majority vote. Legislation setting procedures for such a referendum is still pending in the Diet. It was carried over to the next ordinary Diet session, to convene in January for a 150-day run. The LDP-New Komeito coalition is far short of a two-thirds majority in the Upper House. In addition, New Komeito remains reluctant about rewriting Article 9.

Abe faces the need to raise the consumption tax to finance rising social-security costs and stem an even further rise in government debts. But he has decided to delay a sweeping overhaul of the tax system, including a possible hike in the currently 5% consumption-tax rate, until after the Upper House election.

Abe has set a goal of securing high growth rates. "Without economic growth, we will be unable to take effective measures to reverse the trend of fewer children and reconstruct government finances," Abe said. He said his government will aim to achieve high growth through tax breaks aimed at encouraging technological innovation in the private sectors, especially information technology, and thereby boosting productivity, a key condition for growth amid the rapidly graying - and even shrinking - population resulting from low birth rates.

Rehabilitating the creaking social-security system, including pension, medical insurance and nursing-care insurance for the elderly, has emerged as a pressing task for the government, amid the rapid aging of society and continued decline in birth rates. Government finances remain in dire straits. Japan's fiscal condition is the worst among major industrialized economies, with the deficits held by the central and local governments totaling a staggering 1 quadrillion yen ($9 trillion). This figure translates into about 8.3 million yen (more than $70,000) per person in a nation of about 127 million people.

The consumption tax was introduced in 1989, but only a few months later, then prime minister Noboru Takeshita was forced to resign. The tax rate was raised from the original 3% to the current 5% in 1997, after which consumer spending slumped and the country slipped back into recession. The LDP suffered a debilitating loss in the Upper House election held the following year, forcing then prime minister Ryutaro Hashimoto from office.

Outlook for Japanese diplomacy
As the Year of the Dog draws to a close, Japan remains dogged by a host of foreign-policy challenges carried over from the old year.

Among those challenges, topping the agenda are resolving the crisis over North Korea's nuclear program, contributions to peace

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