Japan is heading towards a general election on 30 August, in which the opposition Democratic Party of Japan (DPJ) is expected to oust the long-ruling Liberal Democratic Party (LDP) from power for only the second time in more than 50 years. A loss in the Lower House would remove the ruling party from Japan's helm for only the second time since 1955, marking the culmination of a gradual erosion in the party's power over time.

The Japanese Electoral System

The Japanese electorate has 103 million eligible voters out of a population of 127 million. More than 65% of voters turned out for the previous Lower House election in 2005. Each voter will cast two ballots: one for a candidate in a single-seat constituency, and one for a political party under the proportional representation system, split up into 11 regional blocks. More than 1,300 candidates from 12 parties are expected to file their candidacies for the 480-seat lower chamber of the legislature. Members will be elected for four-year terms.

Key Parties and Players

The Democratic Party of Japan (DPJ): Leader of the DPJ, Yukio Hatoyama, is the man widely tipped to be Japan's next prime minister. As a fourth-generation politician, he comes from one of Japan's most powerful political dynasties. But despite his roots in the wealthy Japanese power elite, Hatoyama has vowed to fight for the common man, outlining his vision of a "politics full of love". He leads a centre-left party drawing members from a diverse range of backgrounds, including former LDP members, socialists, and defence hawks. Since the founding of the party a decade ago and when Ichiro Ozawa was leader between 2006 and 2009, the party has increasingly come to be seen as a potential alternative to the current government. The party has been able to capitalise on growing public disillusionment with the LDP, appealing to rural regions now suffering from growing public debt combined with an ageing population. Borrowing heavily from the Barack Obama theme of change, the DPJ is pledging to take a central path between a welfare state and free market system.

The Liberal Democratic Party (LDP): Prime Minister Taro Aso comes from an influential family, as the son of former prime minister Shigeru Yoshida. While the Japanese leader rose to power on his populist appeal and straight-talking manner, his image has suffered in recent months over a series of policy flip-flops, cabinet scandals, and verbal gaffes. More importantly, his administration has come under severe criticism for its perceived inability to stem the economic crisis, with effective policymaking hampered by political gridlock in the legislature as a result of the party's loss of the Upper House to the opposition DPJ during the election in July 2007. Although Aso is taking the LDP into the upcoming election, he does not have political longevity, underscored by a recent attempt by rebel lawmakers to oust him in July. The LDP has traditionally been Japan's strongest political force, having been in power almost without break since 1955. The party has a conservative, pro-business bent, and claims credit for presiding over Japan's strong post-Second World War economic growth. However, the party has been suffering from a steady loss of legitimacy since the 1990s as the Japanese electorate has become increasingly disaffected with the party's traditional style of governance. Growing calls for change culminated in the July 2007 election, when the DPJ gained a majority in the Upper House. Recently, the party has endured a series of poor leaders, underscored by the tenures of Shinzo Abe and Yasuo Fukuda.

The New Komeito Party: Led by Akihiro Ota, the New Komeito is a centre-right party currently acting as the LDP's junior coalition partner. With a 400,000 strong membership, the party advocates a strong free market economy combined with minimal government interference.

The Social Democratic Party (SDP): Set up in 1955, and originally known as the Japan Socialist Party, the SDP changed its name to the SDP in 1996. It was the most powerful opposition force in the 1990s, but has gradually lost influence since then. Currently headed by Mizuho Fukushima, the SDP has called for stronger welfare policies, a pacifist defence policy, and the abolition of the death penalty.

The Japanese Communist Party (JCP): Established in 1922 and legalised after the Second World War, the JCP is the fourth largest political group in the country. The group is associated with the labour and student protest movements of the 1960s and 1970s. With the economy suffering from a severe economic downturn, the leader of the party, Kazuo Shii, is hoping to benefit from a surge in membership among disillusioned voters.

Main Issues

The Economy: The focus of the election has sat almost exclusively around the economy. Prime Minister Aso has passed three stimulus packages, the latest of which amounted to 3% of GDP. To some extent, the government stimulus measures succeeded, with the Japanese economy returning to growth in the April-June quarter, pulling the country out of recession. However, Japan still faces a long road to sustainable recovery, particularly given that domestic consumption only rose by 0.8% in the last quarter. Indeed, any recovery is expected to be fragile due the country's heavy reliance on exports, amid a precarious outlook for the world economy. The DPJ is touting an alternative stimulus package, totalling 4% of GDP, and has been criticising the LDP for its wasteful pork-barrel spending style of governance. Meanwhile, the LDP is portraying itself as more consumer-friendly and economically responsible than the DPJ.

Public Spending: One of the most serious challenges facing Japan is to restore and pay for the rising social welfare, health and pensions costs. Demographic decline is rising up the nation's agenda as the population is set to decrease by one fifth by 2050, leaving a shrinking workforce to support the soaring number of elderly people. The DPJ has pledged to expand the country's social safety net to alleviate problems, particularly those facing rural regions. Proposals include revamping the pension system, cash handouts for families with the children and the waiving of school fees. The opposition is pledging to pay for this by halting unnecessary public works, using government reserves and reducing government personnel costs. However, these policies have been slammed as expensive and unconvincing by the LDP as it seeks to portray the DPJ's generous pledges as irresponsible populism for an increasingly debt-burdened government. The LDP has also castigated the DPJ's pledges as unrealistic, given that it has ruled out raising the 5% consumption tax for at least four years. The question of how both parties intend to pay for their policy prescriptions is an especially hot topic because gross national debt currently stands at 170–180% of GDP. While the LDP has come up with its own promises, including free pre-school education and financial aid for households, the reality is that both parties will have limited capacity to boost public spending given the country's massive public debt.

Government Reform: The 360,000-strong Japanese bureaucracy has been castigated for wielding unjustified levels of power over the politicians. Their influence steadily increased in the aftermath of the Second World War, when bureaucrats were tasked with guiding the country through a period of economic recovery. However, while unelected officials have steered policy, drawn up legislation, and allocated state budgets, their power has sometimes exceeded that of the ministry heads who they are ostensibly serving. Following this, the DPJ has promised to end the culture of bureaucracy-dominated government by posting about 100 party Diet members to government ministries and agencies, setting up a national strategy bureau under the prime minister's control, and assuming control over senior bureaucratic appointments. However, the party's desire to limit bureaucratic power could be undermined by its need to please crucial constituencies, such as the labour unions of government workers.

Foreign Relations: With respect to foreign policy, the DPJ is arguing that Japan should have a less subservient relationship with its long-time ally the United States, speaking of a more "equal alliance". A democratic government would consider halting the Japanese navy's refuelling of U.S. warships in the Indian Ocean as well as potentially seeking to revise the agreement governing the legal status of some of the 500,000 U.S. troops in Japan. The incoming government would also need to address the issue of China's growing regional influence, while keeping relations on an even keel with its most important trading partner.

Outlook and Implications

Polls indicate widespread disenchantment with the long-ruling LDP following a slew of policy flip-flops, cabinet scandals, and high levels of unemployment. A survey conducted by the Kyodo news agency this week revealed that 43% of unaligned voters, seen as key players in elections this month, are planning to support the DPJ in the proportional representation sector of the election. Another poll this week by the Asahi Shimbun newspaper of 130,000 voters suggested that the DPJ could win as many as 320 seats in the lower chamber, in what would be a landslide victory. A two-thirds majority would allow the party to rule without relying on coalition partners. It would also enable the centre-left group to push legislation through parliament without struggling to assemble a majority in the Upper House, where it currently relies on coalition partners such as the SDP.

Optimists argue that such a result would represent a painful step towards a two-party political system offering voters a more genuine choice in politics. A stint in opposition could give the LDP the opportunity it needs to make itself a more coherent, competitive group, while the DPJ could acquire much-needed skills of political governance. Ultimately, they say, this could improve policy debate, boost transparency, end the policy-paralysis and give the electorate a more genuine choice after more than half a decade of one-party dominance. However, many voters are sceptical as to the degree of change that the party would represent. For example, many DPJ legislators were formerly members of the LDP. At the same time, the DPJ, already riddled with cracks from its unwieldy mix of socialists and dissatisfied LDP defectors, could fracture as governmental responsibility highlights intra-party divisions and the lack of a coherent policy agenda. An opposition victory in 1993 was short-lived as the government quickly disintegrated due to a lack of clear policy direction and unity of purpose, paving the way for the LDP to return to power in 1994. Finally, a victory for the LDP would, to some extent, only signal a negative vote, highlighting the opposition's role as a negative force in Japanese politics. The general atmosphere of disillusionment was brought to the fore by the explosion of a corruption scandal that implicated the top aide of former DPJ chairman Ichiro Ozawa earlier this year. The affair badly undermined the DPJ's positioning as a credible, clean alternative to the LDP—raising serous questions over the extent to which the DPJ will represent a fresh start in Japanese politics.

Global Insight (Reino Unido)