Monday, August 8, 2005

Rumblings in Japan

Some big news this morning out of Japan. The Japanese Prime Minister, Mr. Koizumi Junichiro, has apparently asked the Emperor (as per Article 7 of the Japanese Constitution), to dissolve the House of Representatives (lower house of the Diet), after a bill to split up and privatize the Japanese postal service (Japan Post) failed in the upper house, the House of Councillors. Prime Minister Koizumi's postal reform Bill went down because defectors from the Prime Minister’s own party, the Liberal-Democratic Party (LDP), either voted against the Bill or failed to show up for the vote. This Bill just squeaked through the House of Representatives back in July.

Prime Minister Koizumi had previously made it clear that he was going to treat the postal reform Bill as a referendum on his government and its policies, and he seems to be making the high-stakes bet that the Japanese people will approve of what he’s doing, and return the LDP to power.

Elections for the House of Representatives are to be held 11 September. Apparently there is a real chance that the Socialists, now called the “Democrats” could wind up running the next government.

The failed bill is even more controversial than it sounds, because Japan Post runs a large part of the Japanese personal savings system: postal savings accounts have formed an important part of the Japanese economy since Emperor Meiji, and over 80 percent of citizens have postal savings accounts. Japan Post holds about a quarter of total personal assets in Japan, and is also in the life insurance business: between 55 and 60 percent of Japanese have a postal life insurance policy. Clearly, this bill threatens to upset many apple carts.

According to the English language Japanese newspaper Mainichi Daily News online, Prime Minister Koizumi has told his party leaders that the LDP will not endorse 37 members of the House of Representatives who voted against the postal bill when it was in the lower house, and that the LDP will put up new persons to run in their places.

Some of the LDP politicos, however, don’t seem sure that Mr. Koizumi’s bet on elections is the best play. Japan Post employees have always been a bulwark of LDP support. How are they likely to feel about privatization ? Perhaps this is one reason why Kozuimi’s move to hold snap elections has produced some disagreement even within Mr. Koizumi’s government. Under the Japanese Constitution, the Cabinet requests that the Emperor order elections, and the Agriculture, Forests and Fisheries Minister, Mr. Shimamura Yoshinobu, tried to gum up the works by refusing to sign the request; whereupon Mr. Koizumi fired Mr. Shimamura and took the Agriculture portfolio himself. That much public disagreement with the boss is unusual in Japanese politics.

The LDP, either alone, or in coalition, has dominated Japanese politics for virtually the entire post-war period, except for a few years in the 1960’s. A cornerstone of LDP policy has always been the US-Japan alliance. The Democrats have historically been much more skeptical of the US tie’s value. America needs a strong Japanese ally right now, so the upcoming election will be important.

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