No. 3 — January 21, 2000


Weekly Review

--- by Barbara Wanner

Eyeing the upcoming lower house elections, the Democratic Party of Japan, the largest opposition group, is champing at the bit to make the tripartite government of Prime Minister Keizo Obuchi look bad during the regular Diet session that began January 20. While DPJ officials harbor no illusions about their party's ability to win control of the House of Representatives, they clearly intend to expand their power base. The Democrats regard the current parliamentary session, during which lawmakers must enact the FY 2000 budget, among other important matters, as a golden opportunity to play on citizens' apparent concerns about the Obuchi administration's fitness for leadership. The DPJ no doubt hopes to score points during the weekly 40 minutes of Diet debate between the prime minister and members of the nonruling parties, a protocol decided January 17 by senior members of the ruling and opposition forces.

At the conclusion of the fall 1999 special Diet session, public approval ratings for the union of the Liberal Democratic Party, the Liberal Party and the New Komeito seemed to be in a free-fall. Opinion polls reflected voters' cynicism about the opportunism that had forged the governing coalition and related concerns about the soundness of some of its policy prescriptions (see JEI Report No. 47B, December 17, 1999). In the platform approved January 16 at its annual convention, the DPJ &emdash; whose own image as a hodgepodge of lawmakers without a common agenda has caused problems &emdash; presented a set of policy alternatives designed to portray itself to the disillusioned electorate as the party that is both more responsible and more responsive to public sentiments.

The centerpiece of the DPJ's new "vision" for Japan is a plan to reduce the public debt, now among the biggest of the world's major economies, to 60 percent of gross domestic product over 10 years from an estimated 123 percent in FY 1999 (see JEI Report No. 2A, January 14, 2000). The Democrats also propose a 20 percent cut in public works spending over the next five years and a 30 percent reduction by the end of the decade.

"Although [the Obuchi government] says there can be no fiscal reform without economic recovery, there can be no revitalization of the economy without fiscal structural reform," the platform states. DPJ chief Kunio Hatoyama previewed this proposal in a January 14 speech to the Japan National Press Club, warning that the ruling coalition's "pork-barrel economy" and its "all-time postponement of structural reforms" may force the government into bankruptcy.

Last November, the Obuchi administration approved an ¥18.1 trillion ($150.8 billion at ¥120=$1.00) pump-priming package to keep the economy on some semblance of an upward course (see JEI Report No. 44B, November 19, 1999). Arguing that one last push was needed to ensure a sustainable recovery, the government followed up this initiative with an ¥85 trillion ($708.3 billion) spending blueprint for the fiscal year beginning April 1, 2000 &emdash; the largest-ever initial general account budget (see JEI Report No. 1B, January 7, 2000). Private-sector experts generally agree that, notwithstanding its heavy component of pork, the FY 2000 budget will help to keep the economy expanding. They worry, however, that the government has not set the stage for continued growth once public spending drops.

This view is shared by members of Mr. Obuchi's own party. Former LDP Secretary General Koichi Kato and former Chief Cabinet Secretary Seiroku Kajiyama have been quite vocal in urging greater austerity. "The Obuchi administration has misdiagnosed the illness of the economy and fundamentally mistaken the cure," Mr. Kajiyama stated recently. While pundits have yet to offer pronouncements about the DPJ's economic prescriptions, the Democrats, not surprisingly, have sought to underscore the concerns of outside experts &emdash; as well as the internal dissent of LDP elders &emdash; about the coalition's emphasis on public spending.

Another Obuchi government weak spot that the DPJ has targeted for Diet debate concerns the thorny Okinawan base-relocation problem. For the past three years, implementation of the 1996 Special Action Committee on Okinawa report on consolidation of the U.S. military bases in the southernmost prefecture has been stalled over a provision that calls for finding an alternative site for the U.S. Marine Corps' heliport functions at the Futenma Air Station. Okinawan Gov. Keiichi Inamine has approved the relocation of the heliport to a new, dual-use facility at Nago, a small seaside town on the northern end of the main Okinawan island &emdash; provided that a 15-year limit is imposed on the American military's use of the airport (see JEI Report No. 45B, December 3, 1999).

Department of Defense officials have suggested that while Washington might not be averse to joint military-civilian use of the proposed Nago airport, the Pentagon does object to time limits being imposed on any aspect of the U.S.-Japan security relationship, particularly in light of the fluid situation created by uncertainties about the behavior of North Korea and the People's Republic of China. The fact that Secretary of Defense William Cohen and Japan Defense Agency Director General Tsutomu Kawara virtually sidestepped discussion of the 15-year condition during their January 5 meeting in Washington has been construed as evidence of the White House's opposition to the proviso. Moreover, Mr. Kawara's reluctance even to suggest negotiations on a 15-year time frame hints that Tokyo, too, has reservations about the prefecture's position (see JEI Report No. 2B, January 14, 2000).

For a party anxious to portray the ruling coalition as an expedient union bent on holding power rather than serving the people, the breach between Tokyo and Naha over the heliport is too juicy an issue for the DPJ not to exploit. The Democrats have yet to come forward with a specific solution to the nettlesome problem created by the heavy concentration of U.S. bases on Okinawa. Their platform calls for a reevaluation of the U.S. military presence in Japan after the security situation in Northeast Asia stabilizes (see JEI Report No. 39A, October 15, 1999). However, Mr. Hatoyama has sought to play the populist card, criticizing the Obuchi government for not doing what it was elected to do &emdash; that is, represent the people's interests in negotiations with a foreign power.

Mr. Obuchi and his LDP lieutenants will have their hands full during the first weeks of the current Diet session. They not only must manage Diet consideration of the FY 2000 budget but also make good on a deal with the Liberal Party to pass legislation that will reduce by 20 the 200 lower house seats awarded according to a party's proportional share of the total vote. With the latter initiative in particular, the three ruling parties have all but handed an issue to Mr. Hatoyama on a silver platter that highlights the flimsiness of their political marriage of convenience &emdash; and that could prove to be the coalition's undoing.

The Liberal Party regards Diet reform as one key to transforming Japanese politics into a two-party system that is more responsive to voters. However, the New Komeito opposes the seat-reduction initiative because most of its lower house members earned their jobs through proportional representation. In the closing days of the 1999 fall session, Liberal Party chief Ichiro Ozawa threatened to pull his party out of the coalition when it appeared that the LDP would renege on its promise to enact the plan. In the end, Mr. Ozawa and his followers agreed to remain part of the government as long as the seat-reduction bill gained legislative approval before the end of January.

At the party's recent convention, DPJ leaders made a "firm commitment" to scrap 50 proportional-representation seats in the lower house. They cast this pledge in reformist terms. The Democrats have sought to present their party as dedicated to shaking up a hidebound political system. In his January 16 convention speech, Mr. Hatoyama lambasted the coalition's skin-saving deal on Diet reform, charging that the three parties are unable to say no to vested interests. "Even if they find things wrong, they only make small adjustments," the DPJ chief railed in an apparent reference to the 20-seat reduction compromise. "We cannot trust our future to such parties."

The DPJ has thrown down the gauntlet. It remains to be seen whether the party will make good on its threat during the 2000 Diet session. If the largest opposition party does not go after the coalition government like gangbusters, it may be because party leaders have decided to allow the LDP, the Liberal Party and the New Komeito to hang themselves. Some pundits propose that the DPJ simply may bide its time when the Diet-reform fireworks begin, recognizing that the three parties' lack of concurrence on this issue may blow them apart. That would leave Mr. Obuchi with no choice but to dissolve the Diet for immediate lower house elections. But if the LDP chief's political fortunes do take a turn for the worse in the coming weeks, Mr. Hatoyama must have a cogent message ready for voters. Otherwise, they will be reluctant to strengthen his party's ranks.

The views expressed in this report are those of the author
and do not necessarily represent those of the Japan Economic Institute

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