FROM THE EDITOR

I am writing these words on August 23, exactly a week before the House of Representatives election. So I will refrain from speculating on the outcome, which will be known well before this issue of Japan Echo is printed. Instead I will look at some of the major points that have come to the fore during the campaign.

The overarching issue this time has been "change of government," with the opposition Democratic Party of Japan trying to wrest power from the Liberal Democratic Party, which has been in the driver’s seat almost without interruption since it was founded in 1955. The DPJ explains that it intends to transform the current system of government led by the bureaucracy into one led by elected politicians. In practice the key points in such a transformation would be the policymaking apparatus and the procedures for drafting the budget.

The Democrats, if they win, say they plan to set up a National Strategy Bureau as a cabinet organ reporting directly to the prime minister and to have it start working on the budget for the next fiscal year (starting April 2010). They will then convene a special session of the National Diet and seek revision of the ¥14 trillion supplementary budget already adopted for fiscal 2009. In addition, they will throw out the budget request ceilings approved by the current administration and start compiling the fiscal 2010 budget from scratch. DPJ leader Hatoyama Yukio explains that the new National Strategy Bureau would take over the role that has been played by the Council on Economic and Fiscal Policy, setting the overall framework for the budget under the prime minister’s direction; the bureau would be headed by the chair of the DPJ’s Policy Research Committee (the party’s senior policymaking officer) so as to tie the cabinet and the ruling party together in a unitary system of policymaking. Such a move would in effect amount to incorporating the ruling party’s policymaking apparatus within the cabinet.

The DPJ says it wants to slash ¥3 trillion from the ¥4.4 trillion fund set aside for public-interest corporations and similar organs and to draw trillions more from the "buried treasure" of the government’s various special accounts. And in putting together the budget for fiscal 2010, a DPJ administration would work on the basis of the priorities set forth in the party’s electoral manifesto, having the National Strategy Bureau give directions to the various ministries and agencies on a top-down basis, with the Ministry of Finance left to handle the details. This is quite different from the current bottom-up approach, under which the ministries and agencies each compile their own budget requests, which are then reviewed by MOF and put together to form the total budget proposal. The ministries and agencies are currently working on their requests for fiscal 2010. If the DPJ does take power, we may see considerable confusion in the subsequent budget-drafting process.

Meanwhile, some significant differences between the LDP and DPJ have come into clear view in the areas of foreign policy and defense. The LDP’s manifesto calls for strengthening of the Japan-US alliance, accompanied by progress toward realignment of the US forces in Japan. It declares, "The Japan-US alliance is the cornerstone of our country’s foreign policy. For the sake of Japan’s security and the peace and stability of the Asia-Pacific region and the world, we will strive further to enhance the reliability of the Japan-US security system and strengthen the Japan-US alliance. . . . In addition, we will steadily implement the realignment of US forces in Japan, lightening the burden on local communities in Okinawa and elsewhere while maintaining deterrent power." Strangely, though, the document makes no reference at all to relations with China or to regional cooperation in East Asia.

The DPJ manifesto, by contrast, proclaims the need to "contribute to the world through proactive diplomacy" as the central plank of its foreign policy and security platform.* With regard to relations with the United States, it promises to "develop proactive foreign policy strategies and build a close and equal Japan-US alliance," to "determine the assignment of functions and roles between Japan and the United States, and work positively to fulfill Japan’s responsibilities," to "promote liberalization of trade and investment through the conclusion of a free trade agreement with the United States," and to "propose the revision of the Japan-US Status of Forces Agreement" and "move in the direction of reexamining the realignment of the US military forces in Japan and the role of US military bases in Japan." Concerning East Asia, the DPJ says it will "establish intraregional cooperative mechanisms in the Asia-Pacific region with the aim of building an East Asian Community"; its declared policy objectives in this connection are to "develop relations of mutual trust with China, South Korea, and other Asian countries," to "establish intraregional cooperative mechanisms . . . particularly in such areas as trade, finance, energy, the environment, disaster relief, and measures to control infectious diseases," and to "promote the conclusion of economic partnership agreements and free trade agreements with countries of the Asia-Pacific region, as well as countries throughout the world, covering a broad range of fields including investment, labor, and intellectual property."

So while the LDP focuses on defense policy, the DPJ stresses measures in the area of international economic relations. And though both parties see the Japan-US alliance as the cornerstone of Japanese foreign policy, the LDP says it wants to "strengthen" the bilateral alliance, while the DPJ speaks of making it "close and equal"—a contrast that could lead to considerably different outcomes in dealing with specific issues. For example, the DPJ calls for revision of the Status of Forces Agreement and suggests it may seek changes in the planned realignment of US forces in Japan and in the shape of the US military presence. Also, though the party’s manifesto does not touch on the subject, the DPJ’s Hatoyama has indicated his desire to end the current Maritime Self-Defense Force refueling mission in the Indian Ocean when the relevant enabling legislation expires next January.

In the area of growth policy, the LDP expresses its commitment to the expansion of the economy, domestic demand in particular, through the development of monozukuri (skilled manufacturing) technology, innovation, improvement of the investment environment for the development of other Asian markets, initiatives in the area of clean energy, and promotion of agriculture, including moves to raise farmers’ incomes and increase the food self-sufficiency ratio. The DPJ aims to achieve steady economic growth powered mainly by domestic demand; toward this end it seeks to expand disposable incomes and increase consumption with moves including the payment of child allowances, the elimination of expressway tolls, and lower gasoline taxes. The DPJ also promises to support the development of new technologies and of environmental industries, to provide income support to farming households, and to increase the wages of medical and long-term (nursing) care workers, aiming to turn agriculture, medical care, and long-term care into major sources of new jobs.

The current productivity of Japanese agriculture is extremely low, and so there is considerable room for improvement. But achieving this requires increasing the size of farms, which entails systemic reforms to facilitate the sale or long-term leasing of farm plots. Promotion of growth in other fields, such as medical care, communications, and energy, also requires reforms. Furthermore, an international perspective is necessary in all of these fields. Unfortunately neither party seems to be paying sufficient attention to these points.

Election campaigns almost always involve promises of largesse. But both the LDP and the DPJ need to look beyond their pledged handouts to the issues of the massive deficit in government finances, the parlous state of public pensions, and the need to put the economy on a growth path. Whichever party leads the country after the election, the new administration will have to confront these major problems. (Shiraishi Takashi)

*The quotes from the DPJ manifesto are from the English translation issued by the party with minor stylistic changes. (The quotes from the LDP manifesto above are our translation.)—Ed.

© 2009 Japan Echo Inc.