Japan Center for International ExchangeVol. 3 No. 3 | July 2008

Prospects for Japan’s Domestic Politics andImplications for Its Foreign Policy
Hitoshi Tanaka, Senior Fellow, JCIE

Since the historic defeat of the Liberal DemocraticParty (LDP) in the House of Councillors election
last year, many foreign observers have become concerned about an apparent “stagnation” in Japan’s
domestic politics. Some have suggested that divided
government has had an adverse impact on Japan’s
foreign policy and are uneasy about the long-term
implications of this development for Japan’s international role.
East Asia is in the midst of a major transformation and it would be very unfortunate if Japan—theworld’s second largest economy and a major democracy in the region—were to fail to meet the challenges presented by its changing environment. At
arguably no other time in the postwar era has it been
more necessary for Japan to adopt a proactive leadership role in East Asia and actively work to ensure
the long-term stability of the region. Nevertheless,the manner in which circumstances will evolve in thecoming months and years on the domestic political
front remains uncertain; there is little doubt that theJuly 2007 election was a harbinger of further changeto come. How events play out will have significant
bearing on the kind of regional and global role thatJapan is able to undertake.

Core Issues in Domestic Politics
The most significant issue in recent domestic politics
is the public’s growing dissatisfaction with LDP rule.
Long-festering voter discontent with the LDP temporarily abated under former Prime Minister ­Junichiro
Koizumi, whose exceptional popularity was largely
due to his reputation as a maverick within the party.
Nevertheless, it resurfaced under previous Prime
Minister Shinzo Abe and led to the unprecedented
defeat of the ruling party in the July 2007 House ofCouncillors election. The Democratic Party of Japan’s (DPJ) victory in that election marked the firsttime since 1955 that the LDP lost its status as themost powerful party in both houses of the Diet. The
ruling LDP-Komeito coalition will probably remainin the minority in the Upper House at least throughthe next election in 2010 and, barring a significant
reversal of public sentiment, probably until 2013. Inshort, the upper and lower houses are likely to remain at loggerheads for years to come.
Another issue concerns the timing of the next
general election. Although the government is constitutionally mandated to call a general election upon
the expiration of the Lower House’s four-year termin September 2009, the prime minister is afforded theauthority to call a “snap election” at any time. Current Prime Minister Fukuda was elected LDP president in the immediate aftermath of Mr. Abe’s abrupt
resignation and has yet to receive a popular mandate. As a result, he faces a great deal of pressure tocall an election to legitimize his premiership. However, the cabinet’s low support ratings suggest thatan election in the near future would almost certainly
result in the ruling coalition losing its overwhelming
majority (70 percent) of seats in the Lower House.
It should also be noted that some observers expect
Mr. Fukuda’s support ratings to rise following theupcoming G8 Summit in Hokkaido, a developmentthat would go far toward silencing his critics within
the LDP and allow him to consolidate his power.
Lastly, the possibility that Mr. Fukuda may yield
to pressure from within the LDP to resign prior to
the end of the current Lower House’s term should
not be discounted. However, contrary to widespread
media speculation about the prospects of several
possible candidates for the party presidency—particularly Taro Aso, former chief cabinet secretaryand foreign minister, and Sadakazu Tanigaki, former finance minister and the current chairman of
the LDP Policy Research Council—there is no clear
frontrunner to succeed Mr. Fukuda. Unless a candidate capable of inspiring the electorate and uniting the increasingly factious LDP emerges soon, the­Fukuda administration will probably be afforded
more time to turn things around.

of power between competing political parties. They
contend that such a system would set the stage fora more open and robust debate over domestic andforeign issues, which in time would lead to more effective policy and more accountable leadership.
In the second scenario, the ruling coalition would
win a sufficient number of seats to maintain a majority (or plurality) in the Lower House but forfeit
its current supermajority (and thus its ability tosteamroll legislation through the Lower House without opposition support). Although much has been
made in the press about widespread dissatisfaction
with the LDP, the fact remains that the voting public is largely skeptical of the DPJ’s ability to govern
and hesitant to hand control of the government to a
party of which only a few members (most of whom
are former members of the LDP) have actual experience running the government. The fact that the LDP
is able to call the election at a time of its choosing
further complicates the DPJ’s electoral prospects.
Since this scenario is unlikely to result in an end tothe current political deadlock, the LDP would probably attempt to recruit opposition forces (especiallyindependents and disgruntled DPJ members) to join
the party and end the impasse.
Recent developments in domestic politics suggest a third possible scenario, one with the potential
to usher in a new era in Japanese politics and bringabout a systemic transformation of Japan’s political process. It is no secret that a substantial numberof politicians (including many LDP Diet members)
sense a dramatic LDP electoral defeat looming on
the horizon. If this group were to reach critical mass,
the result could be a historic realignment of politicalparties, which would probably see the LDP and DPJ
splinter along policy lines.
A number of obstacles remain in the way of largescale political realignment, however. The first obstacle
relates to the nature of Japan’s single-member electoral districts. In the event of political realignment,
party mergers and shifting loyalties would cause
many former political rivals to become membersof the same party overnight. When deciding which
candidates to endorse in each electoral district, leaders of newly formed parties would find themselves

Three Scenarios for the General Election
There are three possible outcomes for the next general election. The first is a scenario in which the DPJ
would garner a plurality (or majority) of seats in theLower House and thus receive a popular mandate toform a Democratic cabinet. Several recent polls havesuggested the DPJ’s popularity now exceeds that ofthe LDP, a development that seems to bode well forthe former party’s prospects in the upcoming election. An increasing number of observers, including
many who are otherwise highly critical of the DPJ,
support a Democratic victory out of a belief that achange in power could lead to the emergence of apermanent two-party system and the regular ­transfer
EAST ASIA INSIGHTS2Vol. 3 No. 3 | July 2008

with the unenviable task of having to choose between these former rivals. In other words, many current politicians are likely to resist realignment out ofconcern for their jobs. The second obstacle relates tovoter preferences and long-existing questions about
policy distinctions among Japan’s political parties. A
number of experts, including many current politicians, have expressed doubts about whether policy
differences among DPJ and LDP Diet members aresubstantive enough to warrant the creation of newparties based on policy lines.
Which of these three scenarios materializes willundoubtedly depend on how the political situation
evolves prior to the general election. At least one
issue, however has the potential to divide the voting public into two distinct blocs: the debate over
big versus small government. Many Diet members—both within and outside the LDP—haveblamed the recent expansion of the gap between
rich and poor on the structural reforms initiated under Mr. Koizumi. This gap, as well as risingfood and fuel prices, pensions and healthcare forthe elderly, and a decades-old debate over a possible consumption tax increase, have reemerged
as political flashpoints with the potential to bring
down the LDP.
Nevertheless, the degree to which “bread andbutter” issues will influence voter choices at the next
election will largely depend on the “political winds”
at the time. For example, discontent with the LDP
over the costs of food and fuel may wane if the current surge in prices stops or begins to reverse. If theeconomic growth that has resulted from recent reforms leads companies to increase worker wages, thegap between rich and poor may become less of a political issue.
Mounting frustration with political stagnation
at a time when Japan urgently needs to address anumber of important foreign and domestic challenges has led many concerned citizens, pundits,and politicians alike to call on the LDP and DPJ to
put an end to the current political deadlock throughsome sort of policy compromise. If divided government continues to exist after the next election, thiscompromise could manifest itself either through aEAST ASIA INSIGHTS“gentlemen’s agreement” to cooperate or, althoughhighly unlikely, more formally through the formation of an LDP-DPJ grand coalition.

Foreign Policy Implications
While it is impossible to predict how current political circumstances will evolve in the coming months,
there is no doubt that a debate over foreign policy isbound to occur. A change in government—or evenmerely a change in the premiership—could have significant implications for Japan’s foreign policy.
At the risk of over-simplifying, Japan’s foreign
policy community can be roughly divided into thefollowing three camps: alliance traditionalists, globalists, and pragmatic moderates.
Alliance traditionalists place the maintenanceof a robust alliance with the United States above
all other foreign policy priorities. They advocate
a more proactive Japanese contribution to the alliance, push for constitutional revision to allow
Japan’s Self-Defense Forces (SDF) to participate
in collective defense, tend to emphasize common
values in foreign relations, and call for Japan tostrengthen ties with other democracies. This line
is perhaps best exemplified by the foreign policy ofthe previous Abe administration, in particular the“Arc of Freedom and Prosperity” and the call for
Japan to deepen its strategic ties with democratic
states in the region, particularly the United States,
Australia, and India. Generally speaking, adherents
to this foreign policy line are not very enthusiastic
about regionalism or East Asia community building and tend to prefer pressure and sticks to engagement and dialogue when addressing seemingly
hostile states such as North Korea.
Globalists differ from alliance traditionalists inthat while they also acknowledge the important roleof the US-Japan security alliance in national defense
and regional security, they tend to see excessive reliance on the United States as contrary to Japan’snational interest. Globalists call for a more independent foreign policy line, one that places greater
emphasis on Japan’s relations with the rest of Asia,
in particular its ties with China, and seeks a moreproactive role in the United Nations. An example of3Vol. 3 No. 3 | July 2008

a globalist foreign policy is perhaps DPJ President
Ichiro Ozawa’s call for greater SDF participation
in UN-approved international peacekeeping operations. Some members of his party have recently
advocated an extension of the SDF’s mandate to allow participation in high-risk operations such as theNATO-led (and UN-sanctioned) International Security Assistance Force in Afghanistan.
Members of the third group of foreign policy
thinkers, pragmatic moderates, shy away from ideology, instead basing policy on realistic analyses ofJapan’s external environment. They tend to seek amore sound balance between Japan’s relations withthe United States and the rest of the world, particularly with Japan’s Asian neighbors. They are strong
supporters of regional cooperation and call for Japanto engage the entire region in an inclusive process ofcommunity building. The foreign policy of the current Fukuda administration is perhaps a good example of this kind of “pragmatic moderatism.”
If the DPJ succeeds in taking power at the next
general election, Japan’s foreign policy is likely to
become more “globalist.” How far it will shift in that
direction, however, remains uncertain. Although
Mr. Ozawa is undoubtedly the most powerful force
within the DPJ, many party members strongly disagree with his stance on foreign policy. In fact, foreign policy views within the DPJ are arguably as
diverse as those within the LDP, running the gamut
from globalists like Mr. Ozawa to Asia regionalists,staunch supporters of the US-Japan alliance, andunabashed pacifists. In short, the extent of change
Mr. Ozawa would achieve is sure to be attenuated bycountervailing forces within the party.

If, however, Mr. Fukuda succeeds in reviving theLDP’s fortunes and is able to consolidate his power
either by silencing his critics or reshuffling the cabinet, he will have much greater flexibility to pursue
his own agenda. Under these circumstances, Japan’s
foreign policy is likely to hew to the “pragmaticmoderate” line.

Conclusion
Recent developments have raised a substantial
amount of concern about how current domestic political difficulties in Japan will affect foreign policy.
While it is impossible to be sure how circumstances
will evolve in the coming months, it is clear that
­Japan desperately needs political leadership capableof putting aside intra- and interparty squabbles andwilling to proactively address the profound changes taking place overseas. Of particular concern is­Japan’s future role in East Asia. The stakes are simply
too large for Japan to continue improvising its foreign policy.
Regardless of the outcome, it is imperative thatJapanese politicians embrace the current power
struggle in the Diet as an unprecedented opportunity to engage one another in a candid, healthy, andwide-ranging domestic debate over foreign policy.
The hope is that in doing so policymakers will once
again be able to articulate a clear foreign policy doctrine around which the entire nation can coalesce.
Only then will Japan be able to begin tackling themanifold challenges that lie ahead.
Hitoshi Tanaka is a Senior Fellow at JCIE. He ­previouslyserved as Japan’s Deputy Minister for Foreign Affairs.

East Asia Insights
East Asia Insights is an occasional newsletter focusing on East Asia community building
from the Japanese perspective.
Published by: Tadashi Yamamoto, President, JCIE
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4© 2008 Japan Center for International ExchangeVol. 3 No. 3 | July 2008