No. 1 — January 12, 1996


Weekly Review

--- by Barbara Wanner

Prime Minister Tomiichi Murayama jolted the Japanese political establishment by resigning January 5 after 18 often embattled months in office. His action set the stage for a fierce battle between political forces for change and those committed to the status quo. The 71-year-old premier never had a firm grasp on the reins of power, having been catapulted to the top leadership position in June 1994 as part of a political "marriage of convenience" between his left-leaning Social Democratic Party of Japan and the conservative Liberal Democratic Party, along with the New Sakigake Party. Thus, Mr. Murayama's decision to step down and pass the leadership baton to LDP President Ryutaro Hashimoto, who served as minister of international trade and industry in the SDPJ chief's cabinet, did not really surprise political observers, although his timing was abrupt. While Mr. Hashimoto is regarded as a far stronger leader than Mr. Murayama — for example, he received kudos in Japan for driving a tough bargain with the United States during last year's automotive trade talks (see JEI Report No. 24B, June 30, 1995) — the LDP chief's expected election to prime minister during a special January 11 session of the Diet lower house hardly ensures a period of political stability. Leading opposition party Shinshinto, bolstered by the major Japanese dailies, immediately called for the Diet's dissolution and general elections to hear the vox populi concerning the tripartite government's handling of a number of controversial economic and political issues. Shinshinto members now evidently feel they are well-positioned to beat the often paralyzed ruling coalition parties at the polls, particularly in the wake of their December 27 election of Ichiro Ozawa, a former LDP secretary general and behind-the-scenes powerhouse, to lead the largest opposition party. Political commentators suggest, in fact, that the post-Murayama political scene will remain turbulent until the victor of the "Hashimoto vs. Ozawa match" is known.

Political experts contend that a number of factors compelled Mr. Murayama to step down when he did. The Japanese people, who initially embraced the SDPJ chief because of the appeal of his "grandfatherly" image, gradually lost faith in his leadership capabilities. Declining public approval ratings suggest that Mr. Murayama's leadership image suffered as a result of a recurrent paralysis that beset the ideologically diverse ruling coalition as it sought to jump-start the still-sluggish Japanese economy through government spending and tax cuts. In particular, the ruling coalition's recent decision to use ¥685 billion ($6.9 billion at ¥100=$1.00) in public funds to rescue seven troubled housing loan companies (jusen) met disdain from a populace that feels the bailout is one that the companies and their benefactors should deal with on their own (see JEI Report No. 47B, December 22, 1995).

Insiders suggest, however, that internal political factors probably exerted the strongest push on Mr. Murayama. Pressure on the prime minister from within the coalition to resign intensified following the poor performances of all three ruling parties in last July's upper house elections (see JEI Report No. 28B, July 28, 1995). The LDP, which is the largest of the coalition parties, has felt all along — but particularly after these contests — that more effective leadership could be provided by one of its own. The Liberal Democrats, which governed Japan for 38 uninterrupted years until August 1993, have been champing at the bit to reclaim the helm. Mr. Hashimoto's election to the party's top leadership position last September, in fact, was viewed as part of a broader LDP strategy to reclaim the electorate's trust and support. Many LDP members regard the former MITI minister as someone who projects a fresh, vigorous — albeit occasionally brash — leadership image that voters would find appealing (see JEI Report No. 36B, September 29, 1995).

Also projecting a bold image and offering a compelling message to an increasingly disaffected electorate is Mr. Ozawa, who is the principal architect of the plan that brought nine non-LDP parties under the Shinshinto umbrella in December 1994 (see JEI Report No. 41B, December 16, 1994) and who has written and spoken extensively on the need to reform Japan's political and economic systems. As a former LDP member who was a protege of now-deposed kingmaker Shin Kanemaru, moreover, Mr. Ozawa possesses the political savvy to put Mr. Hashimoto's mettle as a party leader to the test in lower house polls. For these reasons some observers suggest that the outcome of the late December Shinshinto leadership election may have caused LDP powers to turn up the heat under Mr. Murayama. The Liberal Democrats may have felt that the time was right to put Mr. Hashimoto at the helm to oversee passage of the FY 1996 budget and to participate in the rescheduled summit in April with President Clinton. With a good performance on these and other governmental matters, analysts propose, the LDP could argue more credibly to the electorate that Mr. Hashimoto and the Liberal Democrats possess the talent required to lead the country and, presumably, fare better in lower house contests.

In addition to possible pressure from the LDP, Mr. Murayama faced problems within his own party that forced him to choose between hanging on to the top job or taking care of things at home. The SDPJ leader opted for the latter, some observers contend. Mr. Murayama has struggled to keep his party together since the early days of his administration. In order to consummate a union with a longtime rival and, thus, to gain access to government power Mr. Murayama reversed heretofore key pacifist tenets of the Socialist party platform, such as those that renounced the U.S.-Japan security treaty and the legality of the Self-Defense Forces. This blatant political opportunism angered die-hard pacifists within the party and led to charges that Mr. Murayama had sacrificed the SDPJ's identity. Key Socialist members, such as SDPJ secretary general Wataru Kubo, for the past year have been calling for the dissolution of the SDPJ and the reinvention of a party in the European-style Social Democratic mold; the goal is to update the party and offer voters a political alternative to the conservative LDP and Shinshinto. Mr. Murayama and his old-guard loyalists have resisted what to them appears to be a radical remaking of the party. Thus, with the SDPJ's January 14-15 annual convention looming on the horizon and the party's ranks becoming increasingly restive, Mr. Murayama felt he should relinquish the premiership in order to devote all of his energies to internal party affairs, some experts say.

The ruling coalition formally endorsed Mr. Hashimoto as its candidate for prime minister January 8; Shinshinto will mount Mr. Ozawa as the chief contender. Although leaders of the largest opposition party have been trying to lure some disaffected SDPJ members to support Mr. Ozawa in the January 11 balloting for premier, Mr. Hashimoto was expected to win the race handily because the three ruling parties hold a solid majority in the lower chamber. The tripartite government claims 294 seats in the 511-seat House of Representatives. In contrast, Shinshinto has 170 members and the Japan Communist Party 15; the remaining 19 seats are held by independents and minor parties, with 13 seats vacant.

During preliminary discussions of a new cabinet lineup January 8 NSP chief Masayoshi Takemura joined Mr. Murayama in indicating that he did not want a cabinet portfolio, suggesting perhaps that the then finance minister felt he, too, was having difficulties holding his party ranks together. The conventional wisdom during the Murayama administration was that the three party leaders had to be part of the leadership structure in order to keep the fragile ruling arrangement from crumbling. In a possible reflection of Mr. Hashimoto's firmer hand on the tiller the soon-to-be prime minister respected the wishes of his colleagues. The three ruling party leaders agreed, furthermore, that cabinet positions would be divvied up to reflect the relative strength of each party within the ruling structure. Thus, the LDP will fill 12 posts, not including Mr. Hashimoto as prime minister, the SDPJ six positions and the NSP two. (As compared with Mr. Murayama's second cabinet, this distribution gives one more position to the NSP.)

The big question among political commentators is how long will the Hashimoto government last. In a January 7 television interview LDP secretary general Koichi Kato denied that the Diet would be dissolved for a snap general election following the election of the new prime minister. He cited the need for legislators to enact the FY 1996 budget before the April 1 start of the new fiscal year. Instead, Mr. Kato suggested, lower house elections would be called sometime in the fall at the earliest. Political observers propose, however, that it may be difficult for even a strong leader like Mr. Hashimoto to hold the forces for change at bay for that long. Providing the prime minister-to-be with a taste of the fight to come, Shinshinto secretary general Takashi Yonezawa, who appeared on the same television show with Mr. Kato, portrayed the tripartite government as attempting to abuse power, insisting that "a constitutional government normally would be expected to dissolve the House of Representatives and seek the judgment of the people." While no one in Tokyo is placing bets on the new government's longevity at this stage, some experts speculate that Japanese voters may have a chance to express their opinion of the ruling coalition's effectiveness in late spring.

In terms of the impact of Mr. Hashimoto's ascendancy on U.S.-Japan relations, American observers generally seem optimistic that the new premier may pursue a more engaged, higher profile diplomacy, although he probably will stick to his hard-line approach on trade matters. Refreshing to some U.S. diplomats is the fact that — unlike Mr. Murayama, who was tentative on foreign policy and security matters due to his pacifist proclivities — the former MITI minister already has gone on the record as supporting a continued, healthy U.S.-Japan security relationship. His imprint appeared more visible on the new policy platform that the three parties hammered out January 7. The plan reportedly calls for more active participation of Self-Defense Forces in United Nations-sponsored peacekeeping operations, suggesting that the LDP under Mr. Hashimoto might take a somewhat more internationalist line. Mr. Ozawa, too, supports a more globally oriented Japan. That approach might be the most certain prospect to be achieved by the juggling of the leadership reins in Tokyo.

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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