April 11, 2008; Volume 04, Number 13

of the

Japan Considered Podcast

[Listen to the audio file by clicking here]

Clink Links Below for Today's Topics

Introduction
Prime Minister Fukuda and DPJ Leader Ozawa Meet in Diet Debate
Effects of DPJ Rejection of Former MOF Bureaucrat, Hiroshi Watanabe, for BOJ Deputy Governorship
Division of Opinion Within the DPJ over Watanabe’s Nomination
Divisions Also Exposed Within the LDP
Concluding Comments

Good Morning. From beautiful Iron Station! In the Piedmont Region of North Carolina. Today is Friday, April 11th, 2008. And you are listening to Volume 04, Number 13, of the Japan Considered Podcast.

Introduction

Coming to you again from the Mobile Studio. I’ve had an opportunity this week to spend a few days up here with my Dad. In our Neighbor to the North, as we say in South Carolina. In the Piedmont region of North Carolina. When Dad moved South from OverHome in Northern Appalachia, he didn’t quite make it to South Carolina. But did pretty well, nonetheless. Beautiful country here. And wonderful neighbors!

Thanks for dropping in again. We’ve got a lot to consider. Japan’s domestic political environment continued to seethe this week. With energy and frustration. Last week I said we’d continue on today with proliferation of cross-faction associations in the LDP. And even some cross-party associations. As long as nothing significant came up. Well, something significant did come up! That we should consider. The Old Clock on the Screen here, is casting its leery eye in my direction. Ready to start blinking red at around 20 minutes. So let’s get right to it.

Prime Minister Fukuda and DPJ Leader Ozawa Meet in Diet Debate

On Wednesday, the 9th, day before yesterday. Prime Minister Fukuda and DPJ Leader Ozawa held their second parliamentary “question time” debate. Their first during this Diet session. Their first debate was held at the end of the previous Diet session, just four months ago, on January 9th . Consideration of this event and its background will give us broader insight into current political goings-on in Japan.

A few years ago it was decided that Japan’s prime minister and the leader of the main opposition party in the Diet would meet regularly for one-on-one public debates. Those debates, it was hoped, would encourage Japan’s political leaders to direct more of their attention to consideration of political issues. And, presumably, leave them less time for the personalistic insider political horse-trading believed to besmirch Japan’s parliament. Comparisons by the reformers at the time were made with the “question time” institution of Britain’s parliament.

Well, like so many of the earnest political reformers’ ideas, this one proved better in theory than in practice. Such debates have been held since then from time to time. But not very often. Due to reluctance on the part of either the incumbent prime minister. Or the leader of the opposition party. Or both! And those held have all paled in comparison to their British model.

Granted, it’s a high-stakes game. In which incumbent prime ministers and party leaders realize they have much more to lose than to gain. These debates are televised nationally, after all. And a fair number of people actually watch them. Also, Japan’s top-level political recruitment processes haven’t produced the sorts of political leaders who excel at such debate. At least, traditionally. So, since they were instituted, far fewer “question times” have been scheduled than their originators had intended. And those held –the ones I’ve seen on video, anyway – have been quite formal, stylized, unexceptional shows. More like Noh plays than Manzai!

Well, as I mentioned, Prime Minister Fukuda and DPJ Leader Ozawa held their latest “question time” on Wednesday, April 9th. Day before yesterday. I was able to watch video of the debate, from beginning to end. Thanks to the Diet’s excellent video service. I’ve mentioned this resource on previous programs. You too can view the stored videos. If you’re interested. And you should be! Just go to the “legislative” page of the Japan Considered Project website, and follow the links. Both Lower House and Upper House. They even have an English language index page! Incredible!

Wednesday’s debate lasted around 45 minutes. And was considerably more substantial – and more heated – than earlier “question time” events that I recall. Japan’s political press the following day seemed pleased by the event. At last they had a genuine “contest” to report on. A “heated” contest, in fact. Not quite as good as a fist-fight in the Diet chamber would have been. But at least a contest!

Well, that may be a little harsh. True, I too didn’t learn anything new about the positions of either the ruling coalition, or the opposition, during the debate. Or, detect any indication from the statements of either Fukuda or Ozawa that either had been persuaded to compromise. But, Japan’s political journalists the next day and today have made one important point. Prime Minister Fukuda publicly confirmed his new attitude toward the parliamentary opposition. An attitude that’s more assertive. Even confrontational.

And that, I believe, has real significance. Well beyond offering Japan’s media and attentive public more exciting TV entertainment. Since it confirms that Fukuda’s finally recognized that he’s got to defend his policies in public. Respond directly to the opposition’s repeated public attacks. And criticize the opposition’s tactics –even strategy – in return.

That is, to “seek the understanding” of Japan’s attentive public. Rather than relying on clandestine, insider elite compromises with his political opposition. The sort of effort we saw during the celebrated one-on-one meeting between Fukuda and Ozawa a while back. The one that led to discussions of a “grand coalition,” of all things! A move obviously intended to avoid parliamentary disruptions. Disruptions inconvenient to both the ruling and opposition party elites. If true, this new development is significant!

Effects of DPJ Rejection of Former MOF Bureaucrat, Hiroshi Watanabe, for BOJ Deputy Governorship

And it may well be true. There are several reasons to think so. Not just Prime Minister Fukuda’s higher-octane presentation of his statements. Even more significant, for me at least, was Fukuda’s blatant assault on Ichiro Ozawa’s leadership position within the DPJ. At the beginning of the session, Fukuda complained about the DPJ’s rejection earlier in the day of his fourth Bank of Japan nominee, Hiroshi Watanabe. The ruling coalition had nominated Watanabe for appointment to one of the Bank’s two deputy governor slots. The DPJ voted against his appointment. Again, on the grounds he served as an MOF bureaucrat for most of his career.

Not surprising by itself. It might well have passed with only limited press notice. More or less. Since recently appointed vice governor, Masaaki Shirakawa, was successfully installed as the Bank’s new governor. But Prime Minister Fukuda unexpectedly asked Ichiro Ozawa point-blank: “Please tell me the name of a person in your Party I can speak to who can be trusted?” Bang!

With this barbed rhetorical question, Fukuda suggested a couple of things to listening journalists and his television audience. First, that he’d been led to believe the DPJ would approve Watanabe’s nomination, if it were made. That he may have been misled by the DPJ concerning other nominee names. And second, that Ozawa was facing sharp divisions of opinion within his own party. That not everyone who sat with the DPJ in the Lower and Upper Houses of the Diet really supported him.

Judging from the video of the event, Fukuda’s blunt attack took Ozawa quite by surprise. He certainly didn’t expect it. After a moment, Ozawa replied that the DPJ’s policy has been consistent on this point. That the Party opposes reserving a senior slot at the Bank of Japan as an amakudari landing pad for retiring Ministry of Finance bureaucrats. Not only to separate Japan’s fiscal and monetary policies. But to limit the odious practice of “amakudari.” Well, reasonable points. As we’ve discussed on this program in the past. However, there’s been every indication – even public indication – that the DPJ was willing to accept Watanabe, if nominated. At least up until last Sunday.

Division of Opinion Within the DPJ over Watanabe’s Nomination

Fukuda’s unexpected, bitter attack on Ozawa during their “question time” debate struck a nerve. Japan’s political media yesterday and today has been chuck full of articles describing division of opinion within the DPJ over Watanabe’s nomination. According to these reports, many, if not most, of the DPJ’s Diet delegation thought the Party should support Watanabe’s nomination as Bank of Japan deputy governor. This public discussion of intra-DPJ disagreement can only intensify existing cleavages. Not good!

True, Watanabe too is a retired Ministry of Finance career bureaucrat. But his experience there was in the international career cone. Rather than in the more mainstream budget cone. He retired as what used to be called “Zaimukan” in Japanese. Or, vice minister for international affairs, in English. Which everyone in Japan knows isn’t really a vice ministerial position. That the official English language title was created back in the 1970s just to raise the incumbent’s status during international monetary negotiations. Watanabe’s international expertise could be considered a genuine asset for the Bank of Japan at this time. Or so many DPJ members thought. And, DPJ approval would avoid public suspicion that the Party was simply playing politics with the Bank of Japan nominations. Playing politics at the expense of Japan’s larger economic interests. Domestic and international.

It appears, from those Japanese political media reports, that Yukio Hatoyama and other DPJ Diet members ultimately were forced to vote against Watanabe’s nomination to avoid embarrassing DPJ leader, Ichiro Ozawa. Once Ozawa publicly stated his opposition to Watanabe during Sunday television news interviews. Vote with Ozawa to maintain DPJ solidarity! Once again, an instance of Ozawa unilaterally announcing a policy position for the Party. And then demanding that all other members of the Party go along with it. “To maintain solidarity!” doncha know.  

Well, of course, this latest development has played right into the hands of those within the DPJ who are already fed up with Ozawa’s leadership. Who believe Ozawa’s tactical focus since late last year on forcing the LDP to dissolve the Lower House and call a general election has been misguided. And has failed! And those who resent Ozawa’s autocratic style of leadership. Ozawa was selected to lead the DPJ because of his reputation as a skillful battlefield commander. But as many battle-experienced military commanders have learned, their popularity evaporates quickly when the war they’ve been sent to fight appears to be going badly.

There now seems little doubt that internal conflicts within the DPJ have reached a critical point. And that Ichiro Ozawa’s leadership – both direction and style – has intensified those conflicts. Conflicts the DPJ right now can ill-afford. It’s unlikely that Ozawa will be able to paper over this one with a morning-after “So Sorry” general meeting of the Party and a press conference or two.

The DPJ’s credibility as a significant Opposition Party rose considerably with the LDP’s shocking loss in the July 2007 Upper House election. With that election, in spite of the LDP’s overwhelming Lower House majority, the DPJ had to be taken seriously. At last! But the DPJ has to maintain that near-majority within the Upper House to sustain their current political advantage. They would lose that advantage immediately should Party divisions reach the point that 20 or so DPJ Upper House members decided to resign their Party membership. This is a danger the DPJ faced in the recent past. When Ichiro Ozawa abruptly resigned the party presidency. And had to be begged to return by a resentful Party leadership. Largely out of fear, as we speculated at the time, he otherwise would bolt the Party. And take a fair number of Upper House DPJ members with him.

Ozawa was accepted as DPJ president with the hope he could leverage domination of the Upper House into even greater credibility for the Party. Perhaps even forcing a Lower House election. An election that might elevate the DPJ to ruling party status. Or, at least lead to a significant loss of LDP Lower House seats.

Today, however, it appears that Ozawa’s efforts to force an early general election have failed. It’s already mid-April, 2008. And there’s been no general election. The LDP leadership simply refuses to resign and call one. In spite of repeated DPJ demands, as we discussed last week. Now, it seems more likely that the Fukuda Cabinet’s continued decline in public approval won’t result in a general election. But rather in Fukuda’s resignation as LDP president. And his replacement with a more competent LDP Lower House member. Someone able to provide the Party with more effective leadership. Now, that’s hardly a development that advantages the DPJ! Especially a badly divided DPJ!

No wonder several DPJ members rebelled against Party discipline and voted for Watanabe’s nomination. Or absented themselves from the vote. We’re bound to hear more about this in the weeks to come. As resentment over Ozawa’s leadership style, and disappointment over failure of his parliamentary tactics, induce more DPJ members to confide their misgivings to friendly journalists.

Divisions Also Exposed Within the LDP

Ozawa was badly bloodied, and came out of this match the loser. At least on points. But during the later rounds he too was able to land a few solid punches. Blows that exposed significant divisions within Prime Minister Fukuda’s LDP as well as the DPJ’s problems. Especially between the LDP’s Zoku traditionalists and the Party’s reformers. A cleavage we’ve long discussed on this program. And the one I still consider to be the most important in Japan’s national politics today.

Here’s how it happened. Prime Minister Fukuda asked for Ozawa’s cooperation in efforts to pass the pending revenue bills. That include continuation of the provisional 25 yen tax on gasoline. Arguing that the loss of revenue resulting from expiration of the gas tax surcharge is seriously affecting the budgets of Japan’s prefectural and local governments.

Fukuda supported his appeal to Ozawa by noting he’d already made a significant concession to DPJ demands. That beginning with the 2009 fiscal year budget, funds from the gasoline tax surcharge would be deposited into the general account. Rather than being set aside in a special account. “Earmarked,” as it were, for road construction projects. As it had been since the system was established back in the 1970s. And therefore, given that concession, Ozawa and his DPJ should agree to debate and pass the bills through the Upper House.

A powerful argument. But Ozawa took this opportunity to deliver his most effective counter-punch. He noted that Prime Minister Fukuda himself had announced the end of the road tax special account system. And that was welcome. But the LDP and ruling coalition had yet to agree. Therefore, the DPJ wasn’t able to accommodate the ruling coalition’s wishes concerning the gas tax bill in the Upper House. Implying there still was doubt that Fukuda could make his plan to end the special account stick. Implying that the LDP’s powerful road zoku members would never agree. And that Fukuda didn’t have the clout to make them agree. Keep in mind that Ozawa knows a thing or two about LDP zoku politics. He’s an honor graduate of the LDP’s traditionalist school. Trained at the knees of the very best practitioners. Including Kakuei Tanaka, architect of the current system.

Fukuda then assured Ozawa that the LDP and New Komeito ruling coalition would confirm his cabinet decision and present it as their official policy. But Ozawa had made his point for the journalists and TV cameras. The LDP too suffers from serious internal divisions. Divisions that make Fukuda’s leadership of the LDP problematic. Perhaps as problematic as Ozawa’s position within the DPJ!

The divide Ozawa alluded to in his reply, of course, is that between the LDP’s zoku traditionalists and its anti-traditionalist reformers. We’ve considered the significance of this division within the LDP on this program for a long time. Suggesting that it has become the most significant cleavage within the Party.

Ozawa hit the nail on the head with his skillful counter-punch. Yasuo Fukuda has a real problem. He became LDP president and prime minister with the support of most of the LDP’s zoku traditionalists. Among others. In the hope he’d be able to revive the Party’s fortunes following Shinzo Abe’s disastrous melt-down in the biggest of the big chairs. Following his selection as LDP president, Fukuda appointed a number of the leading Zokuists to senior Party positions. Unquestionably in recognition of their support. Support that’s still important to him.

However, the LDP’s zoku traditionalists are not Fukuda’s only problem within the LDP. He also needs the support of the LDP’s anti-traditionalists. The folks I’ve labeled on this program as Reformists. It’s difficult at the moment to calculate exact numbers. In part, for lack of solid information. But also because those numbers change frequently. With changes in Japan’s domestic political environment.

We’ll talk more about this next week. Hopefully. When we consider the various cross-factional – and even cross-party – associations that have blossomed in recent months. Some appearing to have candidates to replace Fukuda as soon as he stumbles. Their numbers are far from insignificant. Perhaps more immediately important for Prime Minister Fukuda, support for the LDP’s zoku traditionalists – and their support for him – does very little to raise his public approval ratings. Or those of his cabinet. In fact, the opposite is more likely. Support for the Reformists, however, would be quite another matter. As Junichiro Koizumi so ably demonstrated just a few years ago.

Could it be that Yasuo Fukuda, at long last, has finally realized that his survival as LDP president and prime minister depends upon his ability to turn around his tumbling public approval ratings? That he’s recognized just how much his support for the LDP’s zoku traditionalists has cost him in that critical area? And that he’s now ready to change his strategy? Ready to become a genuine reformer? Hmmm. Stranger things have happened. We’ll have to wait a week or so to see if he’s able to implement the new strategy. Or, if it’s already too late.

Concluding Comments

Well, the Old Clock on the Screen is blinking its warning again. There’s lots more to say about this most interesting “question session” and what it tells us about the current state of Japan’s parliamentary politics. But it will have to wait until next week. We’re just out of time.

So, Goodbye all. Until next week.