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SPEAKING
FREELY
Koizumi: Crazy like a
fox
By Darrel Whitten
Speaking Freely is an Asia Times
Online feature that allows guest writers to have
their say. Please click here
if you are interested in
contributing.
Much of the media
would have it that Japan's Prime Minister
Junichiro Koizumi effectively committed political
suicide by dissolving the House of Representatives
(Lower House) after a  "humiliating" defeat
in a House of Councillors (Upper House) over a
vote on his postal privatization bills.
A
snap election will be held on September 11. But
why did he dissolve the Lower House when the bill
was defeated in the Upper House? The answers
include: a) it was easier to dissolve the House of
Representatives and b) the House of
Representatives is where the real power in Japan's
government lies, particularly as regards to the
ruling Liberal Democratic Party's (LDP) infamous
factions, and therefore is much more politically
important for Koizumi, as well as his "old guard"
opponents within the LDP.
Not only did
Koizumi dissolve the Lower House, he also withdrew
LDP party support in the upcoming elections for
the 37 LDP politicians who voted against his
bills. Without formal LDP support, these
candidates will have to run as independents,
cannot advertise their campaigns in the same
manner as party-backed candidates, and cannot use
party funds in their campaigns. In effect, Koizumi
has used the defeat of the postal liberalization
bills to exorcise his most vocal opponents in the
LDP.
Is Koizumi crazy, or just crazy like
a fox? He is extremely unusual as a Japanese
politician and particularly as one belonging to
the LDP. He actually means what he says and has
consistently attempted to implement the promises
he made when elected. He swept into power with a
landslide victory for himself and the LDP in
elections in April 2001, and became a social
phenomenon in the process. By then, he was a
seasoned politician. Koizumi first ran in general
elections in December 1969 as the replacement
candidate for his father, but was defeated as he
was unable to gain the support of the Yusei Zoku
(postal system interest group).
After a
stint as secretary to former prime minister Takeo
Fukuda, a rival of the Kakuei Tanaka faction that
enjoyed the strong support of the Yusei Zoku,
Koizumi won his first general election in 1972.
Fukuda was part of the LDP faction Ginko Zoku
(previously finance ministry), which was a rival
to Yusei Zoku. Thus Koizumi built his political
career as a Ginko Zoku diet member, which was
fundamentally at odds with the Yusei Zoku.
In 1992, Koizumi was appointed minister of
posts and telecommunications in the Kiichi
Miyazawa cabinet. This was like asking the fox to
guard the hen house. In addition to promoting his
own unique philosophy for postal system
privatization, he continued to battle with career
bureaucrats in the postal system over issues such
as his rejection of a budget proposal by the
ministry to raise the minimum amount of
non-taxable, small-lot savings accounts for senior
citizens.
But Koizumi's "top-down" style
and passion to implement further reforms has
increasingly brought him to loggerheads with aging
influence peddlers within the LDP. That is because
the LDP is essentially a coalition of eight
"policy groups" or factions.
These
factions are aligned with key ministries and
public programs in a number of areas, including
the Doro Zoku (Japan highway), Zeisei Zoku (value
added tax), Yusei Zoku (postal system), Norin Zoku
(agricultural ministry), Shoko Zoku (industry
policy), Ginko Zoku (previously finance ministry)
and the Kosei Zoku (welfare ministry family).
Traditionally, policy within the LDP has been
determined by consensus and compromise among the
LDP factions, with the prime minister's post being
passed around by the respective factions and the
cabinet essentially rubber-stamping LDP policy
initiatives. The strength of each faction is
determined by the number of members it commands,
which in turn is largely determined by the amount
of money the faction can attract and use in
getting its members elected.
Koizumi's
grand aim from the beginning has been to abolish
the political factions within the LDP and
eliminate the sleaze and under-the-table dealings
that have driven Japan's parliamentary system. His
reorganizations within Japan's government were
aimed at shifting the policy initiative to the
cabinet from the LDP. On the other hand, the Yusei
Zoku faction has long been the center of power for
the LDP's most influential politicians, including
the infamous Shin Kanemaru, a former LDP
politician arrested for corruption in 1993.
The elimination of factionalism in the LDP
is key in diverting the money flow from a few
influential LDP politicians, the bureaucrats and
public corporations into the private sector. In
effect, privatizing government-owned businesses,
such as the Japan Highway Public Corp and the
postal system, entails eliminating factionalism
within the LDP and defeating the "old guard"
politicians whose political fortunes have been
built on the pork-barreling from these
enterprises.
There is a vast pool of
government-controlled funds in the postal system.
In effect, Koizumi's postal reform bills attack
the heart of the Zoku system established by former
prime minister and influential LDP member Kakuei
Tanaka and his heirs. Koizumi and his supporters
believe the traditional system is at the center of
Japan's political sclerosis. Tanaka originally
created this flow-based, vote-generating money
machine and it has been inherited through the
years by the party's main faction, currently the
Hashimoto faction. Its kindred brother is the Doro
Zoku, which was also first established by Tanaka
and is now led by Makoto Koga and also has
influential Hashimoto faction members.
Thus Koizumi's decades-old obsession with
postal privatization fits squarely into his agenda
of weaning the LDP of its addiction to wasteful
public spending and the pork-barreling that won
seats for "old guard" (ie Yusei Zoku and Doro
Zoku) LDP members. For example, the Yusei Zoku
alone was supposedly good for one million votes.
Thus it is not surprising that Koizumi failed to
back away or compromise on the postal reform
bills, even though it has cost him significant
political capital and will probably result in the
breakup of the LDP. What the general public and
most of Koizumi's opponents do not realize,
however, is just how far Koizumi wants to reform
Japanese politics from within his own party. By
his own rhetoric, he was fully prepared to tear
the LDP apart to achieve the lasting reforms that
he believes will revitalize Japan, and his actions
continue to be precisely aimed at achieving these
goals.
When Koizumi swept into power in
April 2001, some doubted that his cabinet would
last six months. Four years on, the factions have
lost power. The strongest Hashimoto faction
virtually disintegrated in the 2003 LDP
presidential election, and the Kamei faction is
also on the verge of breaking up. Ironically, it
was Koizumi's amazing popularity that helped to
prolong the political lives of "old guard" LDP
members.
Crazy like a fox
But
Koizumi, 63, may be running out of time and public
support. He has stated he would resign if he did
not receive a public mandate, ie maintain a
majority for the LDP in the upcoming Lower House
elections. The LDP manifesto for the 2003 House of
Representatives election clearly set a goal of
privatizing postal services by April 2007, and
Koizumi is betting his political life that this
can be achieved. On the surface, dissolving the
Lower House may look like political suicide, but
if Koizumi can maintain a majority in the Lower
House, he will have achieved what many believed
was impossible - an effective exorcising of the
LDP and renewed mandate for further, accelerated
reform.
Looking at the party strengths in
the Lower House prior to the recent dissolution,
the LDP held 249 of 480 total seats, and along
with the cooperation of the New Komeito Party,
controlled some 59% of the votes. Since the LDP
will not endorse the 37 LDP members who voted
against the postal liberalization bills, the LDP
and New Komeito Party as of today still have a
slim 51% majority in the Lower House. Moreover,
while the 37 LDP members will have to run as
independents, they will remain LDP members if
elected. In other words, if Koizumi and his
exorcised LDP, along with the New Komeito,
maintain their current seat counts (without the 37
LDP "rebels"), Koizumi will be able to keep his
election promise and can be expected to re-submit
the postal reform bill.
On the other hand,
the snap election is a major opportunity for the
Democratic Party of Japan (DPJ), which has 174
seats in the Lower House and is the only serious
contender to the LDP. But the DPJ is still a work
in progress and has only recently congealed to the
point where it can present a manifesto and a
comprehensive plan for taking over power from the
LDP. Moreover, there is also brinkmanship on the
part of the DPJ. Party president Katsuya Okada has
publicly stated he will resign if the DPJ is
unable to take over the Lower House after the
September 11 elections.
What makes us
suspect that Koizumi has more than a fighting
chance to remain in power are the
following:
1) Calculating from seats held
by the respective political parties in the Lower
House before it was dissolved, the LDP and the New
Komeito still have a slim majority, even without
the exorcised LDP rebels. Moreover, Koizumi still
appears to be more trusted among voters than Okada
and the DPJ, which implies that voters would
rather stay with a known entity than "experiment"
by handing over power to the DPJ. The DPJ,
however, should continue to gradually increase its
strength in successive elections.
2) A
quick Nikkei survey of 10 economists listed
Koizumi as the overwhelming "PM of choice". None
of them picked Okada.
3) Another Nikkei
survey revealed that support for the Koizumi
cabinet has risen to 47%, up by some 4% since his
decision to dissolve the Lower House. The survey
also indicated that voters appreciate that Koizumi
is showing leadership.
4) The economic
news has never been more supportive. Both the
government and the credit agencies have declared
that Japan's banking crisis is over, to the credit
of the tough reforms implemented under the Koizumi
administration. Japan's economy is showing signs
of re-accelerating after a brief growth hiatus
over the past six months or so. Indeed, the labor
market is tightening, employment conditions are
improving and consumers have become more
confident. In addition, capital expenditure plans
are being revised upward, and even exports are
beginning to recover.
5) As a result, the
stock market is in the process of breaking out of
the trading channel it had been entrapped in since
April of last year, despite a brief hiccup when
news of the defeat of the postal liberalization
bill first broke.
Darrel Whitten
has been following Japan's politics, economy and
financial markets for the past 27 years. A former
head of Japanese equities research for three
global investment banks, he is currently the owner
of his own consulting company and is the editor
and publisher of The JapanInvestor.com, a
subscription-based investment newsletter service.
(Copyright 2005 Darrel E Whitten)
Speaking Freely is an Asia Times
Online feature that allows guest writers to have
their say. Please click here
if you are interested in
contributing. |
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