[William Pesek] Foregone election in Japan

With elections to the upper house of parliament on July 21, Japanese voters seem ready to hand Prime Minister Shinzo Abe one of the bigger blank checks in memory.

No one has forgotten there’s an election. It’s impossible to escape the cacophony of campaign sound trucks, blaring slogans out of tinny loudspeakers. What’s most noticeable, though, is the silence of the citizenry. Try finding the slightest hint that voters are fired up. If recent contests have been notable at all, it’s for setting low-turnout records. This one could top them all. 

This should be the ultimate issues election. Japan confronts a fast-aging population; the world’s biggest public debt; a skyrocketing energy bill, and a pension time bomb. Abe has pledged vague but far-reaching reforms, including lowering trade barriers, empowering women, deregulating industry and possibly revising the pacifist constitution. There are questions about how many U.S. soldiers Japan should host, and whether loose monetary policy is creating a giant bubble.

Yet the Japanese are debating none of this. A victory for Abe’s Liberal Democratic Party will be taken as vindication of policies that he’s laid out only in the sketchiest terms. The failure to hash out those reforms now isn’t just bad news for Japan’s $5.9 trillion economy, but for the world, which could benefit from greater Japanese engagement and more inspired leadership in Tokyo.

Perhaps voters sense that the outcome is a fait accompli. Polls overwhelmingly show the LDP headed for a resounding victory and control over both houses of parliament. A sense of defeatism among supporters of the opposition Democratic Party of Japan, which governed from 2009 to 2012, may keep many from even voting.

A landslide won’t necessarily reflect the feelings of a nation that’s more wary than polls suggest. Certainly voters seem willing to give Abe a chance to revitalize an economy that’s been losing ground for 20 years. But that doesn’t mean they support pet projects such as tweaking education to encourage nationalism, or that they condone increasingly testy exchanges with Japan’s trading partners ― and former colonies ― China and South Korea. Many worry Abe will fan the flames by visiting Tokyo’s Yasukuni Shrine, which honors Japan’s war dead, including several convicted war criminals.

Even on the economy, reservations abound. Abe’s headlong push to join the U.S.-led Trans-Pacific Partnership is a case in point. On economic grounds, across-the-board trade liberalization is a no-brainer. But for a reasonably egalitarian nation such as Japan, the idea of unfettered competition imposed from outside remains controversial. To many, that means more tainted food from China, a proliferation of giant Wal-Mart Stores Inc., a reduction in wages and an embrace of the cutthroat capitalism that Tokyo bureaucrats have tried to avoid for decades.

Voters seem to be discounting Abe’s chances of success. Bringing TPP to Japan would mean forsaking rural supporters, for instance, which the prime minister has in theory pledged not to do. By some measures, farming accounts for slightly more than 1 percent of gross domestic product. Yet gerrymandering and the LDP’s reliance on Japan’s less populated hinterlands give the farm lobby wildly disproportionate sway. If they really thought their interests were at risk, the outcry would be much louder.

The same goes for tax policy. As households brace for a doubling of Japan’s consumption tax over the next two years and the reflation the Bank of Japan is trying to engineer, Abe is mulling sizable reductions in corporate tax rates. It hardly seems fair that consumers, many entering their golden years, should bear all of the nation’s fiscal burden. And yet no Japanese Tea Party has sprung up to channel a nonexistent outrage.

In some cases, Abe seems to be promoting an agenda directly at odds with public opinion. Recent days have offered a steady drumbeat of bad news from Fukushima, where the worst nuclear crisis since Chernobyl is still unfolding. Highly radioactive nuclear waste is seeping into the ground and contaminating the Pacific Ocean. Polls show Japanese are overwhelmingly against restarting nuclear power plants mothballed since the disaster.

Why, then, haven’t there been more protests as the LDP moves to restart the reactors? Why aren’t opposition lawmakers being more vocal and creative about energy alternatives, such as redoubling investments in renewables or following Iceland’s lead by generating more geothermal energy? Japan may have few natural resources, but it has an abundance of volcanoes.

To some degree, the Japanese are apathetic because they can be. Even after almost 20 years of deflation, Japanese society hasn’t unraveled into widespread homelessness, crime and deprivation. Also, Abe’s decisiveness is scoring points with the electorate. Japan is on its 16th prime minister since its asset bubble burst around 1990 and not since, or long before, Junichiro Koizumi (2001-2006) has it had a truly audacious leader pledging to shake up the status quo.

It’s important, though, that reforms move Japan forward in accordance with the aspirations of its people. It’s up to voters and opposition politicians to tell leaders what those goals are and hold them accountable. By giving Abe such carte blanche, Japanese may be setting themselves up for buyer’s remorse. 

By William Pesek

William Pesek is a Bloomberg View columnist. ― Ed.

(Bloomberg)