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Koizumi’s landslide
WORKING-CLASS voters had no real choice in Japan’s
election on 11 September. The two main parties, Jiyu Minshuto (LDP –
Liberal Democratic Party) and Minshuto (DPJ – Democratic Party of Japan)
offered cuts or more cuts in public spending. There was, however, a big
gulf in style. The victor, LDP leader and prime minister, Junichiro
Koizumi, has carefully crafted his image as a political rebel ever since
he took over in 2001. He revels in his nickname, the Lion King, always
the centre of media attention, dashing around with dishevelled hair and
open-necked shirt. Yet he is firmly rooted in the political
establishment: both his grandfather and father were cabinet ministers in
the past. The now-resigned leader of DPJ, Katsuya Okada, on the other
hand, was dubbed ‘policy robot’ for his dour demeanour.
The snap election was called by Koizumi when he
failed to get his plan to privatise Japan Post through the upper house
of parliament. His political gamble paid off as Koizumi used the
campaign to clampdown on powerful party factions and increase his
control. Not only had Koizumi dissolved parliament, but he also expelled
37 LDP ‘rebel MPs’ who voted against the privatisation. Their opposition
was from the position of fighting to hang on to vested interests, rather
than any ideological defence of public ownership.
In fact, Japan Post is an essential part of the
stagnant political system. Its huge funds, accumulated from mass
household savings, are used in the elaborate system of kickbacks and
political favours granted to the LDP’s traditional supporters in
construction corporations, farming and a powerful doctors’ lobby. Over
decades it has helped deliver the vote to the LDP, especially in rural
areas.
Japan Post is the world’s biggest financial
institution, controlling around £1,700 billion ($3,200bn, €2,416bn) of
household financial assets – 85% of households have post office savings
accounts and more than 60% hold one of its life assurance policies. It
has 24,700 branches and employs 280,000 full-time staff, a third of all
public servants. Koizumi wants to allow big business in the private
financial sector to exploit this huge capital – although that is not how
he presented it to the electorate.
Of the 480 seats in the Shugiin (the lower House of
Representatives) fought over in this election, the LDP won 296 seats, up
from 212 after the expulsions. The LDP’s coalition partner, the
Buddhist-backed Komeito (New Clean Government Party), fell from 34 to 31
seats. That gives the coalition more than the two-thirds necessary to
push through any legislation, apart from constitutional change, without
the need for ratification in the Sangiin (the upper House of
Councillors). The DPJ collapsed from 175 to 113 seats. Okada resigned.
The turnout was 67.5%, the highest since 1990. Nihon Kyosan-to (Japan
Communist Party) retained its nine seats, and Shakai Minshuto (Social
Democratic Party) moved from six to seven.
Each voter has two votes. The lower house is made up
of 300 single member districts (where a vote is cast for a particular
candidate) and 180 proportional districts (where seats are allocated
according to a party’s share of the vote). This favours the two main
parties. Since the LDP was formed in 1955, it has ruled for all but one
year – independently or in coalition. The DPJ was formed in 1998 from a
disparate collection of politicians ranging from social democrats to
right-wingers. Okada, who became its leader in 2001, was a member of the
LDP until 1993.
The DPJ tried to campaign on a wide-ranging
neo-liberal programme. It also called for the withdrawal of Japanese
troops from Iraq, and improving relations with China and South Korea –
in contrast to Koizumi’s nationalism, symbolised by annual visits to the
Yasukuni shrine, where convicted war criminals are honoured and the
militarism of the second world war is glorified.
Its message was drowned out by Koizumi’s
star-studded election extravaganza, especially his ‘assassins’ –
celebrity candidates from fashion, media, business and diplomacy,
including telegenic women, who Koizumi called ‘Madonnas of reform’ – who
stood against the expelled MPs. They dominated mass media coverage. The
singular message was that postal privatisation represented dynamic
social and political change. The powerful Keidanren business groups came
out unequivocally for Koizumi, unlike in 2003 when they backed both the
LDP and DPJ.
Koizumi’s previous ‘privatisation’ – of corrupt
road-building corporations – is a warning of what to expect. Typically,
he first organised a televised commission to ‘expose’ their
mismanagement. But it was a complete sham. They are no more accountable
than they were before. The Japan Post policy, due to start in 2007 and
unfolding over ten years, is full of loopholes, written in to ensure
that vested interests are safeguarded.
Koizumi is no friend of the workers. His government
has slashed state spending on social services. To compensate for the
rising numbers of older people, as the population starts to decrease,
pension entitlements have been cut. The LDP is also planning to increase
workers’ pension contributions. Over the past 15 years of recession,
companies have undertaken severe downsizing, throwing tens of thousands
of people out of work or replacing full-time employment with part-time
and casual jobs. Small farms have gone under and suicide rates in rural
areas have risen.
The OECD estimates that nearly a fifth of 66-75
year-olds live below its measure of the poverty line – households with
an income half the national average. In Japan, a person who pays into
the system for 40 years is eligible for a basic pension of £325 ($600,
€480) a month. But at any given time, a third of Japanese people of
working age are not paying into the fund, so many receive a lot less
than this, while others get nothing at all. Social change has also
resulted in fewer older people living with their children, so poverty is
increasing.
Clearly, Koizumi has given the LDP, which was on the
decline, a new lease of life. He has created the false impression that
the kickback culture has been discredited in the party. The result is
that the LDP scored big victories in the DPJ’s urban heartlands, such as
Tokyo and Osaka. This could be short-lived as workers’ living standards
continue to be undermined and opposition grows.
The victory has been greeted by rises on Japan’s
Nikkei stock market, and generally welcomed in the international
financial press. And it has coincided with signs of an improvement in
the Japanese economy. Over the past years, however, there have been
numerous occasions when such signals have been greeted with euphoria,
only to see the economy slump again.
Unemployment fell to 4.2% in June, from 4.4% in
April/May, and its peak of 5.5% in early 2003. It is at its lowest for
seven years, though still well above Japan’s historical rate. In
2003-04, however, firms were still replacing permanent workers with
part-timers and temporary staff.
There has been an increase in profits, mainly
because of the expansion of the Chinese economy and US consumer
spending. Japanese companies have increased investment in new plant and
equipment in China and other overseas markets. In turn, those companies
are buying more Japanese components and materials. As they had
previously laid off tens of thousands of workers and cut costs, profit
margins have risen and significant amounts of corporate debt have been
paid off. The Economist estimates that bad loans to the banks fell from
£162 billion ($255bn, €209bn – 8.7% of the total) in March 2002 to £38
billion ($68bn, €56bn – 2.9%) today.
Japan is burdened, however, with a huge public debt:
160% of GDP. Exports account for only 10-12% of the economy and, as yet,
there has been no significant increase in retail sales: "While Toyota
was taking over the world, car sales in Japan fell by 16% between 1990
and 2001". (The Economist, 17 September) Years of job losses and
casualisation are resulting in a skills shortage, which will have
adverse effects on productivity and long-term economic growth. Japan’s
100% reliance on imported oil makes it extremely vulnerable to oil price
hikes. Therefore, it is a very precarious basis for a recovery. Any
downturn in the global economy would completely undercut the gains
currently showing through.
After his victory, Koizumi reiterated his pledge to
stand down as party head and prime minister in September 2006. Whoever
takes over, the future looks grim for Japan’s working class, unless it
develops a socialist alternative. On top of attacks on pension provision
and postal privatisation, further cuts in medical services, the civil
service, government financial institutions and other public sectors are
in the pipeline.
Manny Thain
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