Japan's New Government

A journalist photographs Democratic Party of Japan campaign posters outside the Laforet Museum Roppongi in Tokyo, August 30, 2009. (Junko Kimura/Getty Images)

by Simon Tay

The recent elections favoring the Democratic Party of Japan (DPJ) have ended 50 years of near continuous rule by the Liberal Democratic Party (LDP). This is an historic change; the LDP, a party synonymous with “Japan Inc”, has been in lock step with bureaucracy and big business. Yet, the implications for the rest of Asia may be less profound. 

The big differences between the two parties come down to domestic issues, including social welfare and administrative reform. Election voting patterns also seem to reflect a sentiment against incumbents. The parties had few differences when it came to policy towards the rest of Asia.

Japan has increasingly been looking inward. Despite being the largest Asian economy and a traditional donor to many neighbors, Japan has been playing “catch up” as the region has come together in this last decade.

Nevertheless, three areas bear watching as the DPJ take office.

The first is how Japan deals with its economic doldrums. The DPJ will likely continue its record-level stimulus measures. But the new government must reign in the country’s growing public deficit without further dampening the economy.

There is a fundamental need for new growth strategies that move beyond a dependency on exports to the West, and American markets, in particular. Asia as a whole is pondering this shift and this could both influence Japan, or in turn, Japan could influence how the region's other players react.

Climate change is another key area. The DPJ promised a 25 percent reduction in greenhouse gas emissions by 2020. To achieve that, Japan will need to roll out cooperation schemes in Asian states that are less energy efficient. Given its investments in China and Southeast Asia, Japanese companies could do more abroad than they can at home.

The third issue is Japan's relationship with the US; This is where the DPJ took a pragmatic approach. As it transitions from the opposition to the ruling party, more radical manifestos about US bases in Okinawa will likely be sidelined. The DPJ will likely continue to take a different stance on issues like nuclear disarmament and Japan's efforts in Afghanistan.

In contract to the Liberal Democratic Party, who were more focused on the US, even as regionalism grew, the DPJ could lead Japan to engage more fully with its Asian neighbors on the economic front, especially in light of the current financial crisis. Opening domestic markets more widely to Asian products would be a difficult, but key, signal.

Deeper questions about Japan’s role in Asia will depend on the attention given to domestic policies. One indicator: the longevity of government ministers. The LDP has had six premiers since 2000 -- three of them in last two years. Over the same period, there has been no fewer than nine foreign ministers.

The DPJ’s victory is more than a shuffle within the ranks of the ruling party and its different factions. It remains to be seen whether the Democratic Party of Japan can deliver the sort of leadership and changes Japan needs.

Simon Tay is an Asia Society Bernard Schwartz Fellow and is Chairman of the Singapore Institute of International Affairs.