Ten months ago the Democratic Party of Japan (DPJ) ended six decades of near-unbroken rule by the Liberal Democratic Party (LDP), ushering in a new political era. But on July 11, elections for Japan’s upper house rolled back DPJ gains and produced yet another divided government, seemingly dashing hopes for effective reform. A look beneath the surface of the election results, however, reveals glimmerings of a new direction for Japan during an era political transition – one that could augur a revitalization of Japanese power and purpose at home and abroad.
After taking a majority in the Japanese Diet’s lower house last August, the question before this month’s elections was whether the DPJ could complete its political revolution by winning the upper house. Instead, the party suffered a net loss of ten seats, winning just 44 ; the opposition LDP outperformed expectations by capturing 51 seats.
The government will now be unable to move its legislative agenda through the Diet’s upper house. Yet the opposition remains fractured and the LDP weak : its support in the proportional-representation ballot fell to only 24 percent, against the DPJ’s 32 percent. A surprisingly strong performance by the Your Party, which supports smaller government, pro-business policies, and a closer U.S. alliance, makes it an important swing player in a more fluid political environment. But factionalized politics will make needed structural reform difficult. How did the DPJ squander the strong hand it was dealt in last year’s election ? Prime Minister Naoto Kan’s mishandling of an announced doubling of Japan’s consumption tax contributed to his party’s precipitous decline in support. However, this was not because the Japanese oppose fiscal reform—nearly two-thirds of those polled agree that raising consumption tax to tackle Japan’s massive debt-GDP ratio of some 200 percent is necessary, and the LDP also supports raising it. Rather, Prime Minister Kan’s unfortunate handling of the issue—he proposed it only to walk back from it at the first signs of opposition—recalled for many voters the weak and indecisive leadership of his predecessor, Yukio Hatoyama. Ironically, many voters abandoned the DPJ in this election not because they oppose reform but because they yearn for the bold leadership promised (but not delivered) by the DPJ’s ascent to power last year. Rather than a return to the old status quo of conservative pork barrel politics, Japanese politics now appears to be a competition between parties old and new to effectively tap voters’ yearning for national reform and renewal. In effect, “floating voters” constitute a majority of the Japanese electorate ; they will support whichever parties can credibly pursue reforms that generate economic vitality and more effective governance. This tendency has created a degree of political ferment unimaginable in Japan just a few years ago—pressuring the ruling DPJ to perform, encouraging the old LDP to renew itself, and elevating smaller reformist parties into potential kingmakers in any coalition government. These trends are progressive and encouraging—even as they vex a Japanese political class unused to such voter flux and demands for accountability. As is often the case in democracies, Japan’s voting public is ahead of its leaders in recognizing the need for change. Slow-to-no economic growth and historic debt levels are not sustainable in a world turned upside down by rich country debt crises and a new intensity of economic competition from China, India, and other emerging giants. The transformation of Japan’s external security environment from North Korea’s nuclearization to China’s ascendance demands Japanese adaptation to new realities. The good news for America is that there now exists in Japan a cross-party consensus on strengthening the U.S.-Japan alliance, including the DPJ—a relief for Washington after previous Prime Minister Yukio Hatoyama rattled the alliance with a botched attempt to renegotiate American basing rights on Okinawa. Public support in Japan for a robust (and more equal) alliance with the United States is by some measures at historic highs. Expanding Japan’s international leadership is the flip side of domestic revitalization. Japan could start by intensifying strategic and economic relations with like-minded countries beyond the United States. This could include enhanced ties with South Korea, Australia, and India, including in trilateral partnerships with each of these countries and America. Washington and Tokyo could work with Brussels to launch a U.S.-Japan-EU trilateral concert to coordinate on global governance. NATO could use this November’s Lisbon summit to enhance operational ties with the Japanese military to defend the global commons – particularly the sea lanes on which Japan is uniquely dependent. Japan could join the Trans-Pacific Partnership trade initiative to boost prosperity across the Pacific Rim. Domestic constitutional and market reforms would strengthen Japan’s hand abroad, reinforcing Japanese competitiveness in a globalized world. At the same time, its leaders may find that expanding Japan’s economic, diplomatic, and strategic horizons can help catalyze domestic renewal.
