After a bruising battle, Kan faces tough tasks
After a bruising battle, Kan faces tough tasks
Prime Minister Naoto Kan defeated Ichiro Ozawa, former secretary general of the Democratic Party of Japan, by a significant margin in the party presidential election Tuesday following a hard-fought battle that has opened a rift in the party.
The confusion in the party, which followed the major defeat it suffered in the House of Councillors election in July, has effectively created a political vacuum in the nation. It cannot be denied that the situation has caused national policies to stagnate and has smothered the nation's politics in a sense of helplessness.
During the intraparty struggle, the government fell one step behind in dealing with the yen's rapid appreciation and the flagging economy. This was widely noticed.
Kan should immediately form his new Cabinet, appoint new party executives and exert leadership in implementing economic stimulus measures and drafting the fiscal 2011 budget.
Scandal held Ozawa back
Kan's victory, however, owes a lot to the "weak points" of his opponent, Ozawa.
In connection with scandals involving his political funds management organization, his former secretaries were arrested and indicted. He resigned as party secretary general right before the upper house election.
In the party leadership race, former Prime Minister Yukio Hatoyama, who was also involved in a politics-and-money scandal and had resigned as prime minister, threw his support behind the DPJ heavyweight. It was a renewed challenge by the Ozawa-Hatoyama duo toward the party leadership, a move that most observers found hard to understand. It was natural that many non-lawmaker party members and registered supporters did not accept them.
In connection with the scandal, an inquest of prosecution committee is scheduled to decide in October--for the second time--whether Ozawa should be indicted in connection with a suspicious land purchase by his political funds management group.
When Ozawa was asked what he would do if the independent panel decides that he merits the indictment and he is prosecuted, he clearly stated he would neither leave the party nor resign as Diet member, indicating that he planned to fight the charges in court.
However, Ozawa has failed to fulfill his responsibility to explain his politics-and-money problems. His remarks undoubtedly aroused opposition and doubt among many party members.
In the end, one factor behind Ozawa's defeat in the presidential election was the possibility that the country might have ended up with a prime minister who was on trial in a criminal case.
Passive support to Kan
However, much of the support Kan received in the presidential election was passive. In other words, many of his supporters apparently did not want to have yet another prime minister barely three months after Kan assumed the post, or the third prime minister within a year.
Kan and Ozawa staged a neck and neck battle for votes by Diet members, suggesting that there are deep-rooted frustrations over the prime minister's management of his administration.
How does Kan intend to handle the divided Diet, in which the ruling bloc controls the House of Representatives while the opposition camp holds a majority in the upper house? And how will he reunite his party, which was split in the presidential election?
During the presidential election campaign, Kan failed to present clear strategies on how to overcome such problems, simply insisting that it would be possible to form a consensus through "careful" and "modest" discussions in the divided Diet.
In a speech after his reelection as party leader, he sought cooperation from party members. "To form a united party in which all party members will be able to fully exert their power now that the game is over and there are no sides, I ask for your support," he said.
If Kan opts for a troika system by appointing Ozawa and Hatoyama to key Cabinet or party posts, it may end up creating a dual power structure, just as in the Hatoyama administration. We urge the prime minister not to repeat that mistake. He must appoint the right people to the right positions to decisively implement policies.
Now that the party leadership race is over, it is anticipated that Ozawa's supporters will intensify moves to shake the administration not only in personnel affairs but also in budget compilation and other policy matters. Some may even try to break away from the party.
The prime minister is highly likely to face difficult political situations, in which he has to confront the Liberal Democratic Party and other opposition parties on one hand while dealing with the "intraparty opposition group" formed by Ozawa's supporters on the other.
In addition, Kan has to deal with a full political agenda.
As for the consumption tax rate hike, the prime minister has toned down his recent stance on the issue compared with what he said in the upper house election campaign. "We'll discuss the future of social security services together with fiscal resources. It'll be important to discuss the consumption tax in that process," he said during the presidential election campaign.
However, if he adopts the "once bitten, twice shy" approach, he will unlikely be able to restore this country's public finances, which is one of his key policies.
The prime minister should expedite efforts to call on the LDP and other parties for suprapartisan negotiations to lay the groundwork for a consumption tax hike in the near future.
Reevaluate election pledges
In the presidential election campaign, Ozawa called for sticking to the pledges the party made for the lower house election last year. However, his defeat indicates that his argument had been rejected.
Japan's fiscal condition is the worst among the major industrialized countries. To meet the fiscal 2010 budget, the government has been forced to issue bonds in an amount greater than its tax revenues. Given the situation, we believe there is no room for the government to continue the handout policies outlined in its manifesto, especially since no economic effects can be expected from such measures.
The government therefore must drastically review the child-rearing allowance program and the plan to make expressways toll-free in the fiscal 2011 budget compilation.
In the middle of the presidential election campaign, the prime minister ordered the relevant government offices to consider lowering effective corporate tax rates, which are high by international standards. The step is necessary to boost Japanese companies' potential power and raise their international competitiveness. The government must put this measure into practice in the tax system reform for the next fiscal year.
As for the relocation of the U.S. Marine Corps' Futenma Air Station in Okinawa Prefecture, Ozawa suggested reviewing the Japan-U.S. agreement reached in May under the Hatoyama administration, exposing the fact that the DPJ is significantly divided over security policies.
As soon as possible, Kan should dispel U.S. concerns that may have been generated by Ozawa's remarks and start full-fledged coordination with Okinawa Prefecture and the United States in line with the Japan-U.S. agreement.
(From The Yomiuri Shimbun, Sept. 15, 2010)