The results of Sunday's contest could rock the global economy and destabilize Asia. Maybe the world should pay attention?
- By Michael CucekMichael Cucek is research associate at the MIT Center for International Studies and the author of the Shisaku blog on Japanese politics and society. <p> </p>
Three and a half years ago, Japanese voters delivered what appeared to be a knockout blow to the Liberal Democratic Party (LDP), which had ruled Japan almost without interruption since 1955. The LDP, which was not so much a party as a political institution, presided over Japan’s astonishing rise from a nation rebuilding from the rubble of World War II to a global colossus — and then over a 20-year period of economic stagnation. In the interim, other East Asian countries caught up with Japan in terms of economic, political and military might.
To replace the LDP and dismantle the rotten edifice it had built, Japanese voters in 2009 gave a mandate to the Democratic Party of Japan (DPJ) — a dispassionate alliance of LDP defectors, market liberals, and socialists. It was supposed to not only be a political changing of the guard but a revolution: The DPJ would become the country’s new ruling class, leading Japan back to economic growth and regional preeminence.
What a difference a few years makes. On Sunday, Japan will hold its first general election since that would-be revolution — and the party projected to emerge in the driver’s seat is the much-maligned and still much-loathed LDP.
For cynics and skeptics, this projection is a cause for glee. Japan cannot and will not change, they argued in 2009, and the LDP’s resurgence proves it. They say the country is destined to be a wealthy but declining dowager, reliving memories of its past glories while demographics, bad governance, and the rise of new powers erode its global significance.
So why should we care about who is who in Japan today — or which parties will win big on Dec. 16? Here are the top five reasons the Japanese elections matter.
1. Japan’s economy could get a lot worse
Japan has suffered two decades of subpar economic growth. The fundamentals of its economy are dismal: It is locked in a seemingly unbreakable deflation spiral, its workforce is in decline, immigration levels are too low, and the combination of a global economic slowdown and a strong yen are decreasing the volume of its exports.
The recipe for growth of LDP president Abe Shinzo, who will be prime minister if his party wins, is to increase the monetary supply until the country achieves an inflation rate of 2 percent. Liberal economists have praised the plan, even though it dodges a discussion of what happens to Japan’s government bonds in the face of inflation. Servicing Japan’s astronomical nominal debt already consumes 25 percent of the national budget. An inflation-triggered rise in interest rates could lead to disaster as the likely liquidation of international investments and the devaluation of the yen sends new waves of turmoil through the weak world economy.
2. Conflict with China could increase
It is difficult to imagine Japan, whose Self-Defense Forces (SDF) have never fired a shot in anger, getting into a war with China. Nevertheless, the paramilitary forces of the two countries are in an intense stare down over the Senkakus (which the Chinese call the Diaoyus), a group of uninhabited — and basically worthless — islands off the northeast coast of Taiwan. China is engaging in what amounts to economic warfare against Japanese companies, seemingly with the goal of breaking Japan’s will to keep the islands.
While the Sino-Japanese relationship is already fraught, the outlook post-election is dire. The LDP promises not to reduce tensions but to increase them: Its election manifesto calls for studying the permanent basing of "civil servants" on the islands — a transparent and cheesy bit of word play. Because Japan’s constitution forbids the maintenance of armed forces, Japan’s SDF are not classified as soldiers and sailors, but "special employment civil servants." Putting these military "civil servants" on the Senkakus would cross a clear red line with China. The LDP manifesto also makes grandiose pledges to defend Japan’s lands, seas, and remote islands: In his speeches, Abe calls for the protection of Japan’s "beautiful land" and "beautiful territorial waters" from China’s depredations.
While Abe takes a hard line, the Japan Restoration Party (JRP) — Japan’s No. 2 or No. 3 party (depending upon the poll) is even more radical. Party leader Ishihara Shintaro jumpstarted this year’s row over the Senkakus with his plan, unveiled in Washington, to have the Tokyo metropolitan government purchase three of the islands from a private owner. He has unleashed a constant stream of insults at China, memorably calling it a "thief" intent on stealing Japan’s land and wealth.
If the territorial rows were not enough, the LDP is looking to recast the history of Japanese imperialism in a rosier light. It has promised to set up a special commission to promote a revisionist view of Japan’s expansion into East Asia, and also vows to review Tokyo’s statements regarding its responsibility for World War II and "comfort women."
All the major parties are sprinkled with deniers of the events of Japan’s imperial age. For instance, one of the officials of the oddly-named Japan Tomorrow Party (Mirai no To), which champions women’s issues, told a delegation of visitors from Nanjing that the 1937 Japanese massacre in their city was not as bad as reported.
Regardless of their views on history, cooperation with the United States is on the agenda of all the major parties. Just prior to the calling of the election in November, the purportedly soft-on-China DPJ asked for a review of the defense guidelines that define Japan’s cooperation with U.S. military forces. The Japanese government asks for such reviews only when it is looking to respond to new threats in the region (the last time was in response to the 1994 North Korea nuclear crisis). Given the economic and military rise of China, it is not hard to guess what changes the Japanese government wants to make provisions for this time around.
3. Japan could seek the bomb
All of the 12 parties contesting the upcoming election are committed to reducing Japan’s dependence on nuclear power — a legacy of the March 2011 disaster at the Fukushima Daiichi nuclear power station, which leaked radiation and forced the evacuation of tens of thousands of residents. But just how far Japan will go in weaning itself from nuclear power remains in question.
Before the Fukushima disaster, Tokyo had hoped to increase the country’s reliance on nuclear power. The expansion of nuclear power generation was projected to fulfill half of the country’s energy needs, and play a huge role in fulfilling Japan’s ambitious carbon emissions reduction targets. Japan’s new allergy to nuclear power generation is now playing havoc with its international climate change commitments and significantly affecting global hydrocarbon markets.
Even as Japan cools toward civilian nuclear power, it is warming toward the idea of acquiring a nuclear arsenal — and this election could lay the groundwork for a historic shift. Ishihara talks openly of the need for Japan to study the development and deployment of an independent nuclear deterrent.
Though it could never be publicly discussed in the only country to have suffered from a nuclear attack, the development of civilian nuclear power in Japan has always had a security component. The government coyly denies this, saying only that Japan’s anti-war constitution did not forbid Japan from possessing nuclear weapons as long as they were for defense only.
For the first time, however, the government has acknowledged that civilian nuclear power is indivisible from security. The law controlling nuclear power has been ambiguously amended, now saying that nuclear power is vital because it has a security component. The official government interpretation – that "security" means only energy security — is a transparent but necessary lie. Ishihara and others have drawn direct lines between Japan’s civilian nuclear power industry and its ability to defend itself in a region where three of its four closest neighbors possess nuclear weapons.
Japan’s pursuit of nuclear weapons would trigger a cascade of regional upheaval — the collapse of the world’s nonproliferation regime, international sanctions on Japan, the end of the Japan-U.S. alliance, a nuclear arms race in East Asia. That would seem to preclude Tokyo from taking such a step — but nonetheless, Ishihara’s open discussion of the nuclear option, along with and similar musings by LDP leaders, indicate that Japan’s allergy to nuclear weapons is fading.
4. Japan could shake up world trade
With the Doha Round of trade liberalization on permanent hiatus, regional economic partnership and trade agreements are the rage. Japan is involved in a number of such negotiations, including a trilateral agreement with South Korea and China, the broader Regional Comprehensive Economic Partnership, and an EU-Japan partnership.
Japan is also mulling whether to join the Trans-Pacific Partnership (TPP), a proposed trade and investment partnership among 11 Pacific countries, including Australia, the United States, Vietnam, and Peru. Japan’s participation would give the partnership undeniable heft, and emphasize TPP’s character as a partnership of democratic states, with a few exceptions.
However, Japan’s entry into the TPP has become a political football due to the country’s electoral system, which is biased toward rural constituencies. Agriculture, forestry, and fisheries, major components of rural economies, are all threatened by the pact, as they might not survive competition from lower-cost and more efficient foreign competitors allowed free access in to Japan’s market through the TPP.
The LDP election manifesto states the party will lead Japan into negotiations to join the partnership. However, its preconditions would make Japan unwelcome at the negotiating table. The other two major parties also want Japan to join the TPP — but each party is papering over internal divisions that would render actual decisions difficult. Almost all of the remaining parties oppose the partnership.
Both the business and security communities in the United States and Japan want broader and deeper economic engagement between the two countries. They will likely be disappointed. It didn’t have to be this way: The TPP serves many of the political goals of Japan’s three major parties, as it provides a counterweight to Japan’s involvement in the more China-dominated East Asia regional trade and investment negotiations.
5. If Tokyo acts, Washington will be forced to react
Creating a more militarily robust Japan has long been a dream of key players in the U.S.-Japan relationship, who envision it reshaping the East Asian balance of power. The first step toward implementing such a vision has been the revision of Article 9 of the Constitution, which limits Japan’s capacity to engage in collective self defense.
The revision of Article 9 has long been a staple of the LDP’s policy platform — and now that the JRP has taken an even more militant line, they will have an important ally in their efforts. The barriers are still high: Both houses of the legislature must approve constitutional amendments by a two-thirds majority, and then the amendments must win a majority in a nation-wide referendum. However, the possibility of constitutional revision is now on the table.
If a victorious LDP forms a government that confronts China, the United States could be drawn into the showdown on the side of Japan. America’s Japan hands have highlighted Abe’s solicitous attitude toward China in his first term as prime minister from 2006 to 2007. But unfortunately, the lesson Abe seems to have learned from his first, unsuccessful, term is that he has to be himself — in other words, the hawkish figure we’ve seen on the campaign trail.
Writing Japan’s 1947 Peace Constitution and nailing down an asymmetric partnership through the U.S.-Japan security arrangements were two of the smartest moves the United States ever made. A secure Japan with a low military profile has been an effective yet autonomous instrument of American foreign policy goals in East Asia. Japan today is an ideal security partner for nations ranging from India to Australia to the Philippines — a huge market, a great overseas investor, a major source of development aid, yet for the most part uninterested in great power politics.
The rise of China is disrupting Asia and the world. Americans should hope that the government that emerges in Tokyo following the upcoming elections is both moderate and stable — but unfortunately, all indications are that it will be neither.