Politicians squabble as nation drifts to the brink

PUBLISHED : Monday, 13 September, 2010, 12:00am
UPDATED : Monday, 13 September, 2010, 12:00am

Will Japan have its sixth prime minister in just four years tomorrow? Or will a key ruling party election lead to the political death of one of the country's most controversial figures, long regarded as the Mr Fix-It who for 20 years has tried to make and break governments?

In any other country, such a bitter contest would mark a wrenching soul-searching. But in Japan's case, as Prime Minister Naoto Kan and controversial challenger Ichiro Ozawa battle it out for the leadership of the Democratic Party of Japan, it is business as usual, as the country hurtles towards becoming a third-rate economy and a political nonentity.

The Japanese public has given its clear verdict: it wants Kan to stay. In poll after poll, the prime minister scores between 63 and 78 per cent, while challenger Ozawa wins just 14-17 per cent. But this is a complicated party election, in which the DPJ members of parliament have two-thirds of the votes. Ozawa supporters say he is in with a chance because his financial backing gave many young MPs their seats.

The general public prefers Kan because he lacks the volcanic personality and the controversial past of Ozawa.

Remarkably, Kan's popularity rating has increased since Ozawa decided to challenge him, and both the prime minister's and the government's approval ratings average above 50 per cent.

Supporters say Ozawa is like an old-time Asian god, highly creative but sometimes too quick to show explosive and destructive anger when someone upsets him. Or you might say that he is like a teenage bully who takes the football away when he is not allowed to score all the goals. He was the bright, young, rising star of the then virtual monopoly Liberal Democratic Party, became its secretary general in his mid-40s and seemed destined for a long spell in power. Prime minister Kiichi Miyazawa, 20 years older than Ozawa, called him the 'great secretary general' at a party meeting. But then when opponents ganged up against him, he split from the LDP and helped end its unbroken string of 38 years in power.

Since then, Ozawa's political skills have played see-saw with his arrogance, and he has flitted from party to party, alternately a kingmaker and too bullying for colleagues to tolerate. He was instrumental in raising the funds and inspiring the DPJ to move from opposition to victory in the upper house elections in 2007, and in the lower house last year.

But scandal has also dogged Ozawa, and one reason for contesting the DPJ leadership may be that as prime minister he might escape the sort of campaign financing charges that have seen three of his former aides indicted.

Win or lose, Ozawa is to be feared. If he wins, he has threatened to show leadership that will try to tackle Japan's economic and political woes. Unfortunately for Japan, some of his measures would be controversial and others too expensive. He accused Kan of letting bureaucrats decide Japan's policy 'just as the LDP did', and criticised budget cuts. Ozawa has long complained that Japan is too dependent on the US, and he wants the country to punch at its true global weight.

But how could a rapidly greying Japan - weighed down by debts twice those of Greece as a percentage of gross domestic product - afford his policies? Ozawa promises 'to cut waste', never an easy task, but admits that he might have to issue new government bonds - with the risk of increasing government debt to a tipping point.

Kan, more moderate and mainstream, emphasises the need to create jobs and get the economy moving. He points out that he has only been in the prime minister's job for three months, hardly time to get to grips with his tasks. But in the past few weeks, the yen has risen to 15-year highs against the US dollar even as the economy stalls. Kan, the Ministry of Finance and Bank of Japan plainly have no plan except to threaten intervention in foreign exchange markets and to talk to Beijing about its purchases of yen.

One danger could be that Kan wins a Pyrrhic victory, with a defeated Ozawa making mischief from within the DPJ or taking his loyal supporters off to a new party. Since the LDP lost the lower house, several new political parties have sprung up with titles like Your Party and Sunrise Party, with few guiding principles and leaders who simply want power.

Heizo Takenaka, Japan's economic supremo under former prime minister Junichiro Koizumi, warned recently on these pages about the dangers of economic and political complacency for Japan. Politically, no leader since Koizumi has grasped the nettle of economic reform, and the media has been slow to discuss or formulate the challenges.

In the country at large, most Japanese would prefer to be left alone to enjoy their lives, unable to understand that this is not a realistic option. Offshore, a rising China prowls. Domestically, Japan's population is ageing; government debts are growing while the economy stagnates. Jobs are not being created, as the rising yen leads Japanese companies to send more work offshore.

Japan is on the brink, and its real tragedy is that its politicians are too busy squabbling to recognise it.

Kevin Rafferty is author of Inside Japan's Powerhouses, a study of Japan Inc and internationalisation