25.11.2014 Author: Vladimir Terehov

Abe Dissolves the Lower House of the Japanese Parliament

56456456On November 18, 2014, Japanese Prime Minister Shinzo Abe announced the dissolution of the lower house of parliament and an early election to reconstitute it. The elections are scheduled for December 14, i.e. before the end of this year, because for the first three months of the regular session in 2015 it will be necessary to undertake the complicated work of drawing up the country’s budget for the next financial year, which starts in Japan on April 1.

To the external observer Abe’s decision appears to almost completely replicate the situation of the second half of 2012, when two months before the end of the calendar year the lower house was dissolved and early elections were held. Their main result was the triumph of the now ruling Liberal Democratic Party (LDP) led by Abe, who took over as prime minister.

However, the motivation of the decisions to hold early parliamentary elections in late 2014 and 2012 do not have anything in common. Two years ago, the discussion was about restoring working efficiency to the entire government’s power structure. For the competition between the two major parties, the LDP and the Democratic Party (DP), had created a situation of a “addled parliament”, through which it was impossible to carry out long-overdue legislation, especially in the economy.

But in foreign policy the instability of the country’s power system (from 2006 to 2012 there have been six prime ministers) was for major Japanese partners (especially the US) a source of uncertainty in the reliable conduct of various bilateral activities.

Two years ago, the efficiency and functionality of parliament and the executive power system as a whole was restored in two stages: the extraordinary elections (already mentioned) to the lower and, six months later (in July 2013), other mid-term elections to the upper house of Japan. Since then, together with the coalition’s “junior partner”, the Komeito party, the LDP has reigned supreme in both chambers.

The question is, “what’s missing” today for the LDP and Prime Minister Abe? The answer is simple – public expression of popular support for future actions by the government and the ruling coalition in a very complicated and risky situation in the area of tax policy.

We are talking about the problem of the second phase of the process of doubling the sales tax (from 5% to 10%), the law was adopted in the summer of 2012, but the first step of the increase (from 5% to 8%) only took place in April 2014.

This event is regarded as an important means of reducing the scale of government borrowing in the process of filling the state budget. These borrowings explain Japan’s gigantic national debt which long ago passed the bar of 200% of annual GDP, which is much larger than the national debt of the USA or Germany.

It is important, however, to note that, in view of the preserved somewhat “corporate” device of the state of Japan, the government is indebted to its own citizens whose complaints against the ruling establishment is based on doubts about the effectiveness of funds “provided as loans”. Here the discussion is about efficiency, not corruption.

Similar doubts began to arise about the need for the second phase of the sales tax scheduled for October 2015, which was delayed because of the “post-traumatic” process of recovery of the Japanese economy caused by the first stage. The loss of the population’s purchasing power has provoked a greater drop in GDP in the second quarter than had been “programmed”.

However, the very adoption of the law in 2012 on doubling the sales tax was of a consensual nature of the then ruling DP, which ended up in opposition against the LDP that same year. Moreover, the initiator of the law has long been the “right wing” LDP, and the consent to support it for the ruling “centre-left” DP had serious consequences, which led to their split.

Offering today to postpone to a later date (probably before 2017) the second stage of the tax hike, the ruling coalition has broken the previously achieved consensus and wants to “receive consent” for this violation from a new parliament.

Abe’s decision for early elections was greeted unenthusiastically not only by the opposition, but also his own LDP, as many members of parliament had occupied their places for only half the period allotted in the constitution. As to predictions for the outcome of future elections, then we can talk only about the level of losses that will be suffered by the ruling coalition.

Since, despite the initial positive effects of the set of measures taken by Abe, dubbed “Abenomics”, a series of circumstantial factors (especially the need for procurement in the external markets of large volumes of hydrocarbons) contributed to the incipient slowdown in 2013 of economic growth.

This cannot but provoke a decrease in the popularity of the LDP and its leader Abe, which was observed in the first year of their ruling. Naturally, any degree of (hypothetical) radical restructuring of the government’s structure of one of the leading powers of the Asia Pacific Region (APR) must affect the regional political situation.

The mood of the LDP was not buoyed by the results of the gubernatorial elections in Okinawa prefecture of November 16. The candidate backed by the ruling party suffered a heavy defeat in the struggle against Takeshi Onaga supported by the Communist and Social Democratic Party of Japan. It should be noted, however, that the Okinawans have always been distinguished by a certain “obstinacy” in relation to the central government. Nevertheless, one of the unpleasant consequences of these elections will be the inevitable damage to the LDP’s image, which is completely out of place on the eve of the general parliamentary elections.

Another important and also negative consequence of the election in Okinawa for Abe’s government will be the actualisation of a long-standing “sore” in Japanese-US relations due to the problem of transferring the US Futenma airbase, which is located in the heart of the city of Ginowan.

Onaga is categorically opposed to the implementation of a coordinated US-Japanese plan, according to which the base will be removed from the city of Ginowan but transferred to another area of the island of Okinawa. In fact, the tough stance on moving the base off the island gave Onaga his victory in the gubernatorial election.

However, the leadership of the LDP has already stated that it will continue efforts to implement the said plan, despite the outcome of the elections.

Vladimir Terekhov, an expert on issues of the Asian Pacific Region, exclusively for the online magazine “New Eastern Outlook”.