Japan's Fukuda in a fight for his life
By Hisane Masaki
TOKYO - As the Year of the Rat begins, Japanese Prime Minister Yasuo Fukuda
continues to face the daunting challenge of pushing through his agenda in the
new harsh political landscape. With a formidable opposition force, declining
poll ratings and a possibly crucial general election in the new year, he is
expected to keep struggling.
For those who want big changes in the nation, the past Year of the Boar may
have been dull and disappointing. The structural reform drive ignited by former
Prime Minister Junichiro Koizumi and basically inherited by Fukuda’s immediate
predecessor Shinzo Abe has lost momentum. For those who want the status
quo or at least no hasty change, however, the old year may not have been so
bad.
In the wake of its historic electoral rout, the ruling Liberal Democratic Party
(LDP) elected Fukuda as its new leader in September in hopes that the veteran,
less reform-minded moderate with a reputation as a consensus-oriented
politician, would bring much-needed stability to the government and LDP-led
ruling coalition.
While vowing to continue with the structural reform drive, Fukuda has
repeatedly pledged to pay more attention to the issue of social inequalities
such as between richer urban and poorer rural areas that were a factor in the
LDP’s electoral drubbing in July. Critics refer to the issue as the negative
legacy of Koizumi's market-friendly reforms. On the day of his inauguration in
late September, Fukuda himself called his team a ''do-or-die'' cabinet. He also
said at the time that his cabinet has "its back against the wall". More
specifically, "That is to say if [the cabinet] fails, the LDP will be ousted
from power," he said.
In the new year, Fukuda is a toshi otoko - literally ''a man of the
year' - as those men born in a year with the same Oriental zodiac sign as the
current year are commonly referred to in Japan. The 71-year-old Fukuda, the
eldest son of former Prime Minister Takeo Fukuda, was born in July 1936, also
the Year of the Rat.
At this time it is impossible to tell whether 2008 will be a lucky year for the
prime minister. It would probably be safer to bet against it. When Fukuda was
elected Japan’s new leader, one senior opposition lawmaker likened him to
Yoshinobu Tokugawa, the last Tokugawa shogun before the 1868 Meiji Restoration
ended the 265-year-old feudalistic shogunate and restored power to the emperor.
The biggest focus of attention in Japanese politics in the new year will be the
general election for the House of Representatives that is due by September 2009
at the latest but is very likely to be called earlier, possibly some time next
summer.
The election for the more powerful lower house of the Diet, Japan’s bicameral
parliament, will be a moment of truth for the political fortunes of not only
Fukuda, but also his LDP-led ruling coalition. It could trigger a drastic
alteration of the nation’s political landscape through the formation of a
''grand coalition'' between the LDP and the biggest opposition Democratic Party
of Japan (DPJ) or even through a major realignment of political parties.
The ruling LDP-New Komeito coalition lost control of the 242-seat House of
Councilors - the upper house of the Diet - to the DPJ-led opposition in an
election in July. To be sure, the ruling camp retains more than two-thirds of
the 480 seats in the lower house, whose decisions constitutionally take
precedence over those of the upper house regarding budgets, treaties and the
election of a prime minister. But the LDP-New Komeito coalition has faced
significant difficulties in pushing through its legislative agendas since its
loss of a majority in the upper house.
This new reality in Japanese politics took its toll on Fukuda’s predecessor
Abe, who abruptly announced his resignation in September, citing the dire
prospect of pushing through a controversial bill aimed at keeping Japanese
naval ships deployed in the Indian Ocean on a refueling mission to support
United States-led operations in and near Afghanistan. Abe was admitted to
hospital with a serious stomach illness just a day later.
The six-year refueling mission was suspended, and Japanese ships were withdrawn
on November 1 after a special anti-terrorism law authorizing the deployment
expired because the opposition-controlled upper house blocked its extension.
Since stepping into Abe's position, Fukuda has been preoccupied with the task
of winning the Diet’s approval for resuming the refueling mission.
The government submitted to the Diet a new anti-terrorism bill, which passed
the lower house on November 13. Days later, Fukuda visited Washington for talks
with President George W Bush and expressed his firm determination to send naval
ships back to the Indian Ocean at the earliest possible date. Recent surveys,
however, show that Japanese public opinion is split almost down the middle over
the bill.
The ruling coalition has extended the current extraordinary Diet session twice
- the legal limit allowed under the Diet law - in a desperate attempt to secure
enactment of the new anti-terrorism bill, which is now pending in the
opposition-dominated upper house. The re-extended session will run through
January 15. It is the first time in 14 years that the Diet will remain in
session over the year-end and New Year period.
The House of Councilor’s foreign and defense affairs committee, which is now
deliberating the new bill, is chaired by a DPJ lawmaker. At the committee, the
DPJ-led opposition camp has given priority to an investigation into the
corruption scandal involving a former top Defense Ministry bureaucrat. In the
scandal, disgraced former vice defense minister Takemasa Moriya was arrested in
late November with his wife on suspicion of accepting bribes from Motonobu
Miyazaki, a former executive at defense contractor Yamada Corp.
The re-extension of the Diet session, decided on December 14, has made it
almost certain, however, that the new anti-terrorism bill will be enacted by
January 15. Under Article 59 of the constitution, the bill can be sent back to
the lower house for a second vote if the upper house votes it down or holds off
on taking a vote on it within 60 days of receiving it, or by January 12. The
bill will become law if passed in the second vote with the support of a
two-thirds majority. The DPJ now appears ready to agree to put the bill to a
vote in the upper house sometime before January 12, but not by the end of this
year.
Until recently, it had been widely believed that if the government’s new
anti-terrorism bill was sent back to the lower house and enacted in the second
vote there, the DPJ-led opposition camp would submit a censure motion against
Fukuda in the opposition-dominated upper house in a bid to pressure him to
dissolve the lower house for a general election. Now, the DPJ is wavering on
whether to actually do that.
DPJ Secretary General Yukio Hatoyama said on December 16 that the party will
carefully make a decision on whether to submit a censure motion against Fukuda,
taking into account the trend of public opinion. Such a censure motion in the
upper house would be non-binding, unlike a no-confidence motion in the lower
house. Still, the possibility of a censure motion against Fukuda in the upper
house, leading to the prime minister’s dissolution of the lower house for a
general election, cannot be ruled out.
Even if the new anti-terrorism bill goes through by mid-January, as is now
widely expected, Fukuda’s ruling coalition will continue to face significant
difficulties pushing its legislative agendas through the divided Diet. This
will leave a logjam of bills, especially controversial ones that pit the ruling
and opposition camps against each other.
While the lower house members are elected for four-year terms in principle,
their upper house counterparts are elected for six-year terms, with half facing
re-election every three years. If the DPJ-led opposition fails to wrest control
of the lower house in the next general election and form a government, the
current divided Diet will continue at least until the next upper house election
in 2010.
The situation will almost certainly get worse for the ruling coalition. Even if
it manages to keep power in the next general election, it will most likely lose
the power to resort to the legislative procedure permitted under Article 59 of
the constitution. The LDP and New Komeito, a party backed by lay Buddhist
organization Soka Gakkai, will most likely lose a two-thirds majority in the
lower house, which it gained by scoring a landslide victory in the last general
election, held in September 2005 under the highly popular Koizumi.
If this happens, the Diet could come to a standstill and the nation’s
policy-making could be paralyzed completely. As a way out of such a possible
dead-end political situation, the idea of a ''grand coalition'' between the LDP
and the DPJ could come back into the spotlight.
On November 4, DPJ leader Ichiro Ozawa, a former LDP heavyweight, submitted his
resignation, saying he felt he no longer had the backing of the DPJ executives
after they immediately opposed the idea of entering a grand coalition with the
LDP. The idea of a grand coalition had come up during his meeting with Fukuda,
held two days earlier. Ozawa officially retracted his resignation three days
later and returned to his and the DPJ's long-standing stance of confronting the
ruling camp. "We won't think about a coalition," he said at the time.
Meanwhile, speculation is rife in political circles about the timing of the
next general election. The LDP-led coalition, still reeling from its
devastating electoral defeat in July, wants to delay the next lower house
election as much as possible. To be sure, the DPJ, emboldened by its newly
acquired status as the upper house’s largest party, has been publicly clamoring
for an immediate general election. Fukuda is widely expected to call an early
poll, but the DPJ itself is not prepared for such an election because of a
slower-than-planned pace of progress in drawing up its list of candidates.
As things stand, the election appears most likely to come sometime around next
summer, after Japan hosts an annual summit of the Group of Eight (G8) major
nations – the US, Canada, Britain, Germany, France, Italy, Russia and Japan -
at the Lake Toya hot-spring resort in the northernmost prefecture of Hokkaido
in early July.
Fukuda has denied the possibility of dissolving the House of Representatives
for a general election before the Diet approves the fiscal 2008 budget bill
early in the year. ''I have to think about various situations before exercising
the right of dissolution. First of all, we have to compile the budget and then
there will be [Diet] deliberations on it. These should be done properly so as
not to affect the lives of the people,'' Fukuda said on December 14. He also
said he cannot do such things as dissolving the lower house ''in the middle of
the summit'', strongly indicating that he is eyeing a dissolution after the G8
meeting.
The hope will be to score a diplomatic coup at the summit, helping to shore up
his ruling coalition’s sagging fortunes. The fight against climate change,
development assistance, especially for Africa, the nuclear programs of North
Korea and Iran and economic issues, including spikes in oil prices and the
subprime loan crisis, are expected to top the G8 summit agenda.
Aside from the election timing, recent opinion polls show the public's support
for the Fukuda cabinet has plummeted, casting an even darker cloud over his and
his ruling coalition’s political fortunes.
A mid-December opinion poll by the nation’s largest business daily, Nikkei,
showed the cabinet's approval rating nose-diving 12 points from the previous
survey in November to 43%. The cabinet’s disapproval rating surged 13
percentage points to 46%. It is the first time that the disapproval rating has
surpassed the approval numbers since Fukuda inaugurated his cabinet, Nikkei
reported. Another survey conducted by Kyodo news agency at the same time,
showed the cabinet's approval rating plunging 11.7 percentage points from
November to 35.3%. The Nikkei survey also showed that 38% of those polled
support the LDP, down 4 percentage points from November, while 34% of
participants support the DPJ, up 6 percentage points.
The Fukuda cabinet’s declining approval rating is widely believed to reflect
growing pubic outrage over the pension defense scandals. The pension scandal
was a key factor behind the LDP-led coalition’s pounding in the July upper
house election. The Social Insurance Agency, under the jurisdiction of the
Ministry of Health, Labor and Welfare, was found earlier this year to have some
50 million unidentified pension premium-payment records. This means many
retirees could get short-changed. The pension issue has angered many Japanese
at a time when they are increasingly concerned about the nation’s creaking
social security system amid the rapid aging of society.
The LDP-New Komeito coalition contested the July upper house election on a
pledge to completely resolve the pension fiasco by next March. But the
government has virtually thrown in the towel recently. The Social Insurance
Agency acknowledged this month that it is facing difficulties identifying, via
its computer system, the holders of around 19.75 million, or 38.8%, of the
approximately 50 million unidentified accounts. Fukuda himself stoked public
anger this month when he questioned whether the government's inability to
completely resolve the pension blunder by next March could be considered a
breach of the campaign pledge made by the ruling coalition, then led by Abe, in
July's upper house election.
Meanwhile, a prolonged and even deeper political turmoil would adversely affect
the world’s second-largest economy. A recent spate of figures points to the
fragility of the nation’s moderate economic recovery, clouding the nation’s
economic outlook.
On December 7, the government said the economy grew much less than previously
thought in the July-September quarter of 2007 amid a housing slump and a slower
pace of growth in capital investments by Japanese businesses. Japan’s gross
domestic product (GDP) grew at an annualized pace of 1.5% in real terms, or
after adjustments for inflation, in the third quarter of 2007, compared with
the preliminarily reported 2.6% growth.
A week later, the Bank of Japan (BOJ) released its closely watched quarterly Tankan
survey, which showed that business confidence among leading manufacturers
declined for the first time in three quarters amid the US subprime loan crisis,
the rising yen and soaring prices for oil and other raw materials.
Resource-poor Japan imports almost all of its oil.
The government approved a report at a cabinet meeting on December 19 projecting
that Japan’s economy will grow 2% in real terms in fiscal 2008, buoyed by solid
domestic demand with capital investment picking up. The report also projects
that economic growth, measured by GDP, will be 2.1% in nominal terms, or before
adjustments for inflation, in fiscal 2008. This means nominal-term growth will
outpace real-term growth for the first time in 11 years - a sign that the
economy may finally leave behind deflationary pressures.
But the government growth estimates for fiscal 2008 may be a little too
optimistic. In the report, the government also reduced its growth projection
for the current fiscal year to 1.3% in real terms from an initial estimate of
2.1% growth. Its forecast for nominal-term growth in fiscal 2007 was also cut
to 0.8% from an initial estimate of 2.1% growth.
Many analysts now expect the BOJ to hold off raising interest rates during the
current fiscal year ending on March 31, 2008. The Japanese central bank ended
its zero-interest policy of nearly six years and raised its benchmark interest
rate to 0.25% from in effect zero in July 2006. The unsecured overnight call
rate, which the BOJ uses as the key target rate in the short-term money market,
was hiked by a quarter percentage point in February this year to 0.5%.
BOJ Governor Toshihiko Fukui is to step down next March when his term expires.
Until the upper house election in July, Deputy Governor Toshiro Muto, a former
top Finance Ministry bureaucrat, had been widely seen as a shoo-in to succeed
Fukui. But the DPJ-led opposition’s control of the upper house has made it
difficult to predict who will be the next BOJ chief. The government’s
appointments of BOJ governors and deputy governors require approval by both
Diet chambers. The DPJ has indicated its opposition to promoting Muto to the
helm of the central bank due to his bureaucratic background.
Meanwhile, as the Year of the Boar draws to a close, Japan remains dogged by a
host of foreign-policy challenges carried over from the old year. Topping the
agenda are resolving the North Korean nuclear issue, further strengthening
Japan’s security alliance with the US, contributions to peace and
reconstruction in Iraq and Afghanistan and giving further impetus to improving
relations with China and South Korea, as well as successfully hosting the G8
summit.
Fukuda will effectively kick off his 2008 diplomacy before the new year
actually starts. In early December, DPJ leader Ozawa beat Fukuda to a China
trip, amid uncertainty over the Diet schedule. In Beijing, Ozawa met President
Hu Jintao among other leaders. Now that the Diet enactment by January 15 of the
new anti-terrorism bill has become almost certain, Fukuda is preparing to visit
China at the end of this month. It is unusual for a Japanese prime minister to
make a year-end overseas trip so close to New Year’s Eve.
Sino-Japanese relations have been on the mend since Koizumi left office in
September 2006. Japan's relations with China - and South Korea - had plunged to
their lowest points in decades, because of Koizumi's repeated visits to the
war-related Yasukuni Shrine in Tokyo and other issues stemming from Japan's
history of aggression and atrocities against its neighbors. The Shinto shrine
is widely regarded as a symbol of Japan's militarist past, as it honors World
War II Class A war criminals among some 2.4 million war dead.
Fukuda’s China visit will be the first by a Japanese prime minister since
October 2006, when Abe, Koizumi’s successor, made a fence-mending tour of China
- and South Korea. Abe and Chinese leaders agreed to build a ''strategic,
mutually beneficial relationship'' between the two neighboring Asian powers.
Fukuda, known for his dovish diplomatic stance, has vowed to promote amicable
relations with Japan’s neighbors while maintaining its pro-US foreign policy.
In Beijing, Fukuda is expected to agree with Chinese leaders to further promote
cultural and personnel exchanges in the new year, when the two countries will
celebrate the 30th anniversary of the 1978 bilateral peace and friendship
treaty and Beijing will host the Summer Olympic Games. But no settlement is
forecast on the thorny dispute over natural-gas reserves in the East China Sea.
President Hu is expected to come to Japan in April 2008, a year after Chinese
Premier Wen Jiabao visited the country.
Hisane Masaki is a Tokyo-based journalist, commentator and scholar on
international politics and economy. Masaki's e-mail address is yiu45535@nifty.com
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