Japanese politics
Keep 'em guessing
Oct 30th 2008 | TOKYO
From The Economist print edition
Aso, having a pretty good crisis, plays for time
NOTCH this up for Taro Aso, Japan’s third unelected prime minister from the Liberal Democratic Party (LDP) in little more than two years: he is now unlikely to beat Japan’s record of 54 days for its shortest-lived leader. Give the wily Mr Aso credit, too, for leading the opposition by the nose since he came to office on September 24th. The Democratic Party of Japan (DPJ) had thought it had Mr Aso’s assurance that he would soon dissolve the Diet (parliament) and call a snap election, one which the DPJ’s leader, Ichiro Ozawa, claims will shatter the post-war structure of LDP-led politics. An election date of November 30th was probable. To bring on the moment, the DPJ, which controls the Diet’s upper house, hastened the passage of LDP bills rather than obstructing them. It fine-tuned its list of candidates, and ran up campaign posters. A palpable excitement ran through the opposition camp.
But then on October 30th, with a poker face, Mr Aso suggested that now was no time for a frivolous election. The global financial crisis called for firm leadership. A wave of selling has sent the stockmarket down to levels not seen in almost 30 years. Hedge funds have unwound with a vengeance a once-profitable “carry trade” for which they had borrowed the Japanese currency: this has sent the yen surging, while households have also rushed to bring yen home. Japan’s financial institutions, it turns out, have created their own toxic derivatives, thanks to complex foreign-currency products sold to retail investors that are now blowing up. Meanwhile, banks count shareholdings as a crucial part of their capital. So after the stockmarket falls, the banks’ capital suddenly looks weak. The government has drawn up a raft of emergency measures to restore confidence, many of which Mr Aso also unveiled on October 30th (see article). He has a duty, he says, to see them through.
Mr Aso has also discovered international obligations. After attending the Asia-Europe summit in Beijing, he says Japan needs a fully functioning prime minister for the Group of 20 countries’ emergency meeting on the financial crisis, to be held in Washington on November 15th. And a week after that there is the summit of the Asia-Pacific Economic Co-operation, APEC, A Perfect Excuse to Chat.
All responsible stuff. But an unspoken reason for delay is a slide in his ratings. Mr Aso has long been a fairly popular politician for getting out and shaking hands. An upbeat style makes a refreshing change from his two predecessors. Most importantly, he has outpolled the bruiser Mr Ozawa, even though voters have consistently said that they prefer the DPJ to the LDP-led coalition. From the start, Mr Aso’s strategy was to capitalise on this paradox. His aim was to paint the election, when it came, as a contest between himself and Mr Ozawa, whose robustness has been undermined by poor health. A contest based on personalities would be an exception.
Yet Mr Aso’s standing in opinion polls has slid since he took office, narrowing the gap with Mr Ozawa: his honeymoon was brief indeed. The economic storm has given him reason to hang on, but not helped his popularity. Mr Aso is wealthy and likes the high life. For all but five nights of his first month, he and his retinue went out to expensive bars and restaurants. He no doubt deserves his cigar and brandy. But as Japan tightens its belt, his irritable defence of how he likes to unwind has grated.
As for the eventual date for an election, Mr Aso appears content to extemporise. Most LDP leaders agree that the economic turmoil makes early polls inadvisable, and one is not due until next September. However, the government’s junior coalition partner, New Komeito, is upset at Mr Aso’s change of mind. Next summer it faces municipal elections in Tokyo, its power-base. It worries that it lacks the resources to fight two elections back-to-back, and will continue to push for an early poll.
The opposition, outfoxed by Mr Aso, is temporarily flummoxed. Susumu Yanase, the DPJ’s election-affairs chief in the upper house, says the party is rapidly having to rethink its strategy. Having supported Mr Aso’s first supplementary budget, it might look irresponsible if it opposed Mr Aso’s new emergency measures. As for the other legislation crucial to the LDP—reauthorising the bill that keeps Japanese navy tankers on a refuelling mission in the Indian Ocean, for the war in Afghanistan— Mr Yanase says the DPJ lacks the leverage it had last year, when its blocking tactics succeeded in bringing the vessels home for a period. Now, Mr Aso has enough time to pass the bill by using the government’s supermajority in the lower house before the current mission expires in mid-January.
Apart from seeming to enjoy himself as prime minister, Mr Aso may have a final reason for not wishing to call a general election soon: that he might win it. No one expects the LDP coalition to keep its supermajority, but it has a chance of retaining a slim majority. For some LDP modernisers, that would be the worst outcome: an unprincipled ruling party without a scrap of reforming zeal under Mr Aso, combined with a hung Diet promising gridlock.
For as long as November 30th was the mooted date for an election, conspiracies within the LDP mounted. Hidenao Nakagawa, a former chief cabinet secretary and enemy of the bureaucracy, and Yuriko Koike, a former defence minister, wondered about leading followers of Junichiro Koizumi, the reformist prime minister who dominated politics from 2001-06, out of the party. Mr Aso’s economy minister, Kaoru Yosano, a fiscal conservative, and Hiroyuki Sonoda, the LDP’s deputy policy chief, have been urged to form a new political party following an Aso win, teaming up with pragmatic reformists in the DPJ (who are unhappy with their own leader). Such a move after an LDP victory could instantly bring Mr Aso down, and usher in DPJ-led rule. But now, all hands are at the pump to deal with the financial tempest; conspiracies have been put on hold.
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