Courtesy Reuters

Party Time in Tokyo

What a New Government Will Mean for Japan’s Future

Last month, the Democratic Party of Japan (DPJ) won an overwhelming victory over the country's long dominant Liberal Democratic Party (LDP). The result marked only the second time the LDP has lost power since its creation in 1955.

The DPJ was founded in 1998 as an opposition party forged from outcasts of the LDP and the Japan Socialist Party, as well as other smaller parties and a sizable cadre of younger politicians. This unlikely mix had dealt an earlier blow to the LDP in 2007, when it became the largest party in the upper house of the Japanese Diet. Now, with its victory in the general election, it will form a new government and select a prime minister -- in all likelihood, Yukio Hatoyama, who replaced the visionary and forceful Ichiro Ozawa as leader of the party last May.

But despite the DPJ's convincing triumph, many observers in both Japan and the West remain doubtful about its capacity to govern. Some believe that the party's members hold fundamentally contradictory positions; others assert that regardless of the party's intentions it will be unable to control Japan's powerful bureaucracy. Such fears are misplaced, however. Although international reaction since the election has focused on the DPJ's calls to move Japan away from the market reforms of the past several decades, the party's electoral platform hews to the political mainstream.

Specifically, it has pledged to shore up the country's pensions and health systems, protect farmers and small and medium-size businesses (both traditional LDP constituencies), assist the swelling ranks of the working poor and temporary laborers, and provide child allowances. To fund such programs, the party promises to cut wasteful spending -- a side effect of decades of misrule by the LDP and a bloated bureaucracy.

Leaders of the DPJ have argued that the bureaucratic state has kept Japan from responding to the many problems facing the country: an aging, shrinking population, stagnant economic growth in the provinces, inefficient and corrupt government institutions, and an obsolete economic growth model. Their transition plan envisions a drastic shift of power from the bureaucracy to the prime minister's cabinet, including the right to appoint personnel, intervene in the promotion of bureaucrats, and draft the budget. In fact, the DPJ aims to remake the state budget from scratch, as Japan's onerous debt burden -- nearly 180 percent of GDP -- thwarts the government's ability to tackle pressing concerns.

But in Japan, the entrenched interests of the bureaucrats represent a substantial political force, and any serious effort at reform will surely encounter hostility. The strategy of the DPJ focuses on harnessing public opinion as a weapon to compel the bureaucracy to yield to the country's new political leadership. Even more important, the DPJ will need sympathizers within the state bureaucracy itself, especially in the finance ministry, which will be an important ally in cutting wasteful spending.

Such an approach seems possible. In the months before the election, DPJ leaders met with senior officials from the ministries of finance, foreign affairs, and economy, trade, and industry, suggesting that both sides are eager for a relatively smooth transition. Both groups stand to benefit: the DPJ must pass elements of its manifesto before the upper house election in July 2010, and the country's bureaucracy has little to lose in making tactical concessions in the DPJ's early days in power.

For the United States, the main question is whether a DPJ government can be trusted as a reliable steward of the historically strong U.S.-Japanese alliance. The Bush administration pushed Japan to embrace a more expansive security role -- contributing its military forces to U.S.-led operations abroad, cooperating on missile defense, and revising its legal and constitutional framework to permit a more active security policy -- while offering little in return but the U.S. security guarantee. And the presence of more than 30,000 U.S. military personnel in bases across the archipelago means this guarantee has often felt more like a burden than a benefit.

This perception of an unequal alliance between the two countries has boosted the popularity of the DPJ. The party sees relations with the United States as only one pillar in a three-pillared foreign policy, which includes cooperation among Asian countries and with the United Nations and other international institutions.

Although there are some disagreements in the DPJ about the details of Japan's foreign policy, a recent survey of the party's candidates found that 18 percent desire a foreign policy that emphasizes the U.S.-Japanese alliance above all else, while 62 percent want a foreign policy centered on Asia. This, in fact, is not all that different from the approach of recent LDP prime ministers, including Taro Aso, who acknowledge that Japan has to balance between its relationship with the United States, its most important security partner, and China, increasingly its most important economic partner. Significant change, however, will take time.

Still, with the DPJ arguing that Japan's foreign policy was too focused on the United States under the LDP, the new government will look to distance Japan from the United States while maintaining a healthy partnership. Most likely, it will move to end the Japanese refueling mission in the Indian Ocean and request that the U.S. government renegotiate the bilateral agreement on the realignment of U.S. forces in Japan, including the base in Okinawa -- although the two governments may be on a collision course on this latter question, as the U.S. State Department has preemptively rejected any renegotiation of the agreement.

Soon after assuming leadership, the DPJ will try to establish a smooth working relationship with the Obama administration. Naoto Kan, a former DPJ leader who will likely receive a senior post in the new government, recently suggested that a DPJ prime minister would seek a meeting with President Barack Obama as early as late September to discuss U.S. bases in Okinawa.

The government will also create space between Japan and the United States through Asian cooperation. Hatoyama himself has written of an East Asian community complete with its own currency -- a far-fetched image, but one revealing of where his government's attention will likely go.

Outside the security realm, however, the DPJ will try to strengthen the U.S.-Japanese relationship. The party has promised to begin negotiations on a free-trade agreement with the United States -- a stark contrast to the LDP, which maintained barriers to shield the Japanese market from U.S. goods, especially agricultural products. Indeed, this promise became an ultimately futile campaign weapon for the LDP, which used the threat of a possible agreement as a scare tactic in an attempt to win over farmers and rural voters.

Ozawa, who is likely to be a critical player in the new government, has long made clear his goal of making Japan a "normal" nation, which means, at home, a government run by politicians, and abroad, a Japan capable of articulating its interests independent of the United States. In short, a country that can and will say no.

As a result, there is the possibility of friction between the new DPJ leadership and the United States, but much depends on how the Obama administration responds to a DPJ government. The DPJ is intent on reshaping Japan's institutions, including the U.S.-Japanese alliance. If the Obama administration treats such moves as hostile, it could poison the relationship with Japan for years to come. The United States should view last month's political transition as an opportunity to develop a less security-centric relationship with Japan. This, combined with the DPJ's own desire to reshape the alliance, would strengthen bilateral relations and compel Japan to become a more active participant in global affairs.

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