Promises, promises

tauringhuang.

Aug 3rd 2009 | TOKYO
From Economist.com

One of the world’s most entrenched political parties faces the fight of its life in Japan

Reuters
FOR more than half a century the Liberal Democratic Party (LDP) has ruled Japan, with only a brief hiatus in the early 1990s. But its monopoly on power is likely to end on August 30th. With less than month to go before general elections, it has issued a manifesto focused on bringing Japan’s economy—still the world’s second largest—back to health. But after years of broken promises, voters appear to be unimpressed, according to a poll published on Monday August 3rd by Asahi Shimbun. The newspaper suggests that the Democratic Party of Japan (DPJ) is almost twice as popular as the LDP.

The LDP promises to restore Japan to 2% growth by March 2011, create 2m new jobs in three years and boost household disposable income by ¥1m ($10,505) in a decade. The focus on the economy reflects the main anxiety of voters. Unemployment is at the highest level in six years and the spectre of deflation has re-emerged. Not only are consumer prices broadly falling, on Monday the government reported that cash wages fell in June at their fastest pace since 1990.

That is why both parties are so keen to boost household incomes. But the LDP also says it will raise the consumption tax from its current level of 5% once the economy improves—a pledge that is meant to suggest the LDP is a responsible set of hands. An emerging campaign strategy is to challenge the DPJ’s fiscal probity, because it has expensive campaign pledges, too, but no plans for tightening fiscal policy. Yet the Asahi poll suggests voters are far more confident in the opposition’s ability to manage the economy than the discredited lot now in charge.

The electoral battle is unlikely to be ideological. Indeed the opposition, which released its own electoral manifesto on July 27th, claims that the LDP has stolen many of its best ideas, such as free pre-schooling and more accessible child care. It sets out to go further than the LDP on social services, however. It wants free high schools as well as pre-schools. It says it will provide families with ¥26,000 per child every month until age 15. It talks of a medium-term goal of rebalancing the economy and ending an over-dependence on exports. But it has not said how it expects to reduce the budget deficit if its pump-priming measures take effect.

The election is really about whether the LDP’s time is up. The party has staged miraculous recoveries in the past, but this time it is further undermined by GDP that is expected to contract by as much as 6% this year, and desperately poor leadership; there have been four prime ministers in the past four years. For a decade and a half the party has been losing support. The notable exception was the 2001-06 tenure as prime minister of Junichiro Koizumi. Yet his popularity partly rested on his vow to destroy the party itself.

The election result is not a foregone conclusion. In a telling sign of public dissatisfaction with politics, about half the electorate supports neither party. Many are looking to smaller parties, which means that the winner may have to forge a coalition to govern effectively.

But the DPJ is already a broad church, encompassing socialists, social democrats and former members of the ruling party. If it wins, it will be enough of a challenge to persuade these disparate groups to act as one. Moreover, in 2010 voters will return to the ballot box for the Diet’s less powerful upper house. So the DPJ would have only a year to show some success.

One of its trickiest tasks would be handling Japan’s unwieldy bureaucracy. The DPJ’s most prominent campaign pledge is to neuter the power of the civil service; it hopes that by cutting administrative expenses some money could be found to pay for its largesse to ordinary households. But as a party inexperienced in command, it would need to rely on bureaucrats to get things done. The bureaucracy, for its part, has begun to prepare for change, by using the annual personnel changes during the summer to send senior officials that are close to the LDP to sinecures in Japan and at international organisations overseas.

Neither party has spelled out a vision of what Japan might look like in the longer term. That is understandable; wrenching political change, after all, is a lot for a country to have to cope with amid an economic slump. On the other hand, Japan has huge long-term problems, such as the highest debt-to-GDP ratio in the rich world, an ageing and shrinking population, protected service industries and young people who are disaffected with politics. A first step towards dealing with these problems is to reassure society that power can alternate between parties and that politicians who do not get things done can be kicked out. But Japan is crying out for bolder policy proposals, too.