Articles:
Japan: The End of Gridlock

10.01.09 Publication: Newsweek

Hard economic times will be politically risky for many countries, bringing populism, protectionism, mass protests, internal strife, revolution and even perhaps war. Yet at least one important country stands to benefit politically from the recession. That country is Japan, the world´s second biggest economy after the United States, but which has suffered from political gridlock in recent years. With a general election due by September this year, the chances now are that the gridlock will at last be broken. More dramatic even than that, the conservative group that has ruled Japan for virtually all of the past 53 years, the Liberal Democratic Party (LDP), looks set to be crushed, and perhaps even destroyed altogether.

For in truth, Japan´s political woes date back a lot further than the Upper House election in July 2007 that handed control of one of Japan´s two houses of Parliament to the main opposition party, the Democratic Party of Japan (DPJ). Since then, however, government has been brought virtually to a halt. That is the immediate problem that needs to be rectified. Some blame the gridlock on Japan´s Constitution, written for the country by its American postwar occupiers. That gave it two houses of Parliament, of which the Lower House, equivalent to the U.S. House of Representatives or the British House of Commons, is more powerful. The Lower House can override the Upper House on the budget or on international treaties by a simple majority, but needs a two thirds vote to override it on other laws.

As luck would have it, the governing coalition, led by the LDP, does hold a two thirds majority in the Lower House, thanks to a huge election victory achieved in 2005 by its popular then prime minister, Junichiro Koizumi, who retired a year later. But the more it tries to use that override power, the further its poll ratings fall. For the DPJ´s 2007 success reflected a political reality: the LDP is deeply unpopular. And since Upper House elections are held partly using proportional representation, it is hard to claim that the DPJ´s blocking efforts in that house are illegitimate.

A more profound political reality is that the LDP has been in decline and even disarray for more than a decade. It has run Japan since 1955, barring just nine months out of office in 1993, but with decreasing levels of effectiveness and an increasing propensity for scandals and blunders. Koizumi came to power in 2001 essentially by running against his own party, under the slogan “Change the LDP, to change Japan.” During his five years in office, which coincided with the country´s recovery from its 1990s stagnation, he succeeded in reforming Japan in many ways. But he failed to transform the LDP, with the result that reform of Japan too has stalled. Since he left office in 2006, ignoring a clamor that he should stay on, he has been succeeded by three hapless LDP prime ministers—Shinzo Abe, Yasuo Fukuda and now Taro Aso—all of whom have challenged poll records for unpopularity.

The Lower House´s four-year term expires in September, so like it or not the LDP will have to face a general election by then, at the latest. Current opinion polls suggest that it will lose heavily, thanks especially to the recession. There are even rumors in Japanese newspapers that Aso might step down ahead of the election in the hope that a successor would prove more popular. Such a desperate step seems unlikely: more likely is that defections from the LDP might force him to call an election sooner.

The sooner the better, as far as many Japanese voters are concerned. It is not that the DPJ looks inspiring or especially effective. Its leader, Ichiro Ozawa, a long-ago LDP defector, is personally as unpopular as Aso. But what Japan needs immediately is a government capable of passing legislation through both houses of Parliament and able to remain united over matters as fundamental as its own fiscal policy. The latest disaster for the LDP has been that a young and respected former minister, Yoshimi Watanabe, has threatened publicly to leave the party in a dispute over its current budget proposals. If he does so, he would be likely either to join the DPJ or to vote with them as an independent. Others could well follow.

The biggest, most dramatic change, though, would be the election of a strong, non-LDP government and, most likely, a broader political realignment. Such a change could come either through a DPJ victory in the general election, bringing the first stable alternation in government in half a century, or through a party realignment following that election—or a combination of the two. With the Japanese economy hobbled by weak consumer spending, by a rising yen and by huge public indebtedness, no one should expect a new government to work miracles. But change would itself be welcome. And just a government that can work at all would be nice.

Emmott was editor of The Economist from 1993 to 2006 and is the author of “Rivals: How the Power Struggle Between China, India and Japan Will Shape Our Next Decade.”