Japan's Fragile Leadership

"A lot is at stake in Tuesday’s election among the members of the ruling Democratic Party of Japan (DPJ) to decide who will lead the party—and the country. Though media reports points to a victory by incumbent Prime Minister Naoto Kan on the strength of his smooth, make-no-waves policy statements, some analysts say that there is still a chance for challenger Ichiro Ozawa. Having been in politics much longer than Kan, Ozawa has a lot of detractors but also a cadre of very loyal supporters, especially in the liberal wing of the DPJ and among younger legislators he has hand-picked and nurtured over the years," says Asia Society Associate Fellow Ayako Doi.

"Though Kan and Ozawa have worked together since they and others cobbled the party together in the late 1990s, they have clear differences on many policy issues in this leadership race. Among them are a need for more economic stimulus, new tax policy, and foreign and defense issues. Kan would focus on job creation by helping corporations and small businesses with incentives and subsidies, while Ozawa would emphasize demand creation though enlarged public spending and child subsidies. Kan thinks the Japanese are ready to accept an increase in the consumption (sales) tax to help reduce a ballooning fiscal deficit that is already the largest in the developed world as a proportion of GDP. Ozawa, having been burnt by proposing tax increases in the past, doesn’t want to talk about the deficit just yet.

"In foreign policy, Ozawa is widely portrayed in the Western media as “anti-American” and “pro-China,” but such simplistic terms mask the complexity of the issues involved. U.S. officials and much of the Western media clearly favor Kan, because of his pledge to carry out a 2006 bilateral agreement to build a replacement airfield for the U.S. Marines in Okinawa, now based at Futenma Air Station in the middle of crowded Ginowan city. But he had criticized the plan before he took office late last year, and even if he now wants to abide by it, all he can do will be to kick the can down the road, just as all preceding prime ministers from the formerly dominant Liberal Democratic (conservative) Party as well as the DPJ, have done in the 14 years since the issue arose. The Okinawan town of Nago, where the proposed air strip is to be built on a coral reef, swore in a new, anti-base mayor in January. Nago voters filled the city legislature with opponents of the airbase in an election just last weekend. It is widely anticipated that Okinawa prefecture will soon elect a governor opposed to the relocation plan.

"Ozawa, seeing the infeasibility of the current plan, proposes more comprehensive talks with the U.S. to reconfigure the alliance for the benefit of both countries, both of which want to limit China’s growing appetite for military and territorial expansion. In fact keeping a solid alliance with Washington is supported by almost all Japanese, including DPJ leaders, even as they seek amicable and mutually beneficial relations with Beijing.

"The bottom line is that if Kan is re-elected, there may be less consternation in Washington about the direction of Japan’s foreign policy—but he will have a hard time implementing his economic and other programs because the DPJ and its coalition partners lost their majority in the legislature’s upper house in early July. A likely reason for that defeat was Kan’s proposal to raise the consumption tax. Ozawa has vaguely talked about the possibility of a political realignment to form a working majority that could carry out his policy initiatives. As a veteran politician he has years of experience in making that happen, though so far without lasting effect."

Ayako is in the Washington DC area. To arrange an interview, contact the Asia Society communications department at 212-327-9271 or pr@asiasociety.org.