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Foreign Policy and Domestic Challenges before Kan Naoto

Rajaram Panda was Senior Fellow at the Institute for Defence Studies and Analyses, New Delhi. Click here for profile
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  • June 09, 2010

    The sudden exit of Hatoyama Yukio and entry of Kan Naoto to Japan’s highest political office heralds yet another phase in the turbulent political culture that has characterized Japanese politics since 1993, when the Liberal Democratic Party (LDP) lost power for the first time, thereby introducing coalition politics in Japan. When Kan succeeded Hatoyama, he became the first prime minister of Japan since Koizumi Junichiro not directly related as son or grandson to another prime minister.

    For the record, Hatoyama was Japan’s fourth prime minister in a row to last less than a year. Japan saw many prime ministers coming from political dynasties but without much leadership skills. If we take away the long tenure of Koizumi (2001-2006), we are faced with the astounding statistic of 13 prime ministers in a span of 16 years. “The strength of Japan’s political dynasties is a major driver in the almost annual procession of weak, mostly forgettable figures in and out of the country’s highest office. Because many politicians inherit their positions, they are not forced to cultivate leadership skills or learn to win popular support.”1

    The distinction between Hatoyama and Kan is quite sharp: Hatoyama was expected to pursue a career in academics and his brother Kunio was to shoulder the burden of political dynasty. In contrast, Kan opted to join politics purely out of his convictions; he was already a student activist. Having been nurtured early in his political carrier on the ideals of Eda Saburo who tried and failed to modernize Japan’s Socialist Party, Kan’s political outlook was influenced by Eda’s emphasis on “the American standard of living, Soviet levels of social protection, British parliamentary democracy, and Japanese pacifism.”

    As regards his stance in foreign policy, Kan supports the security alliance with the US, though he criticized the government’s “slavish subservience to the US” when Koizumi was the prime minister. In particular he was harsh on Koizumi “for not balancing the US-Japan relationship with other ‘pillars’ of Japanese foreign policy, multilateral cooperation at the UN and bilateral and multilateral relations within Asia.”2 The Democratic Party of Japan (DPJ) hopes that with his political maturity, Kan will be able to regain the lost public trust when elections to the Upper House are held in early July 2010. “The central task for the Hatoyama government was to restore public faith in government after years of LDP misrule. The central task of a Kan government would be to restore public faith in government after years of LDP misrule – and nine months of Hatoyama misrule.”3

    As regards the Futenma relocation issue which triggered Hatoyama’s fall from office, Kan is unlikely to embrace a plan that cannot be implemented. After maintaining a prolonged silence on the issue, Kan said: “The US base issue in Okinawa is an extremely difficult problem with factors such as reducing the burden of the Okinawan people and the US over security issues.”4 What Kan seems to suggest is that any solution that may be arrived at on the base relocation issue will be aimed at reducing the burden on the Okinawan people. But how that will be worked out remains unexplained.

    Soon after assuming office, Kan telephoned Obama to reassure that his government sees the security alliance with the US as the “cornerstone” of Japanese foreign policy. However, balancing Washington’s demands with those of Okinawans would be the real challenge for Kan.5 Hatoyama broke a prominent campaign pledge to move the base off the island and could not meet the self-imposed deadline of 31 May to announce the details of the new air field’s construction. Instead, he opted to honour the 2006 accord, which intended to move the Futenma air base in Ginowan to the Henoko coast farther north on Okinawa Island. Hatoyama’s decision leaves Kan with tough choices as any new construction would result in massive opposition from the people of Okinawa. Winning over the goodwill of the Okinawans who do not want the base on their island is yet another challenge before Kan.

    The reaction in Washington to Hatoyama’s exit was muted. The statement issued by the White House after Hatoyama’s exit suggested that the US was relieved that Hatoyama stepped down. Since Kan has little experience in foreign affairs, it is likely that he will depend on civil servants, whose unbridled powers Hatoyama unsuccessfully tried to curtail. Seen from this perspective, the DPJ cannot do without the support of the bureaucrats whose role in formulating and implementing policies smoothly must not be overlooked.

    It may be remembered that Hatoyama tried to push for “close and equal” relationship with the US, while striving to reach out to neighbours, especially China. In contrast, Kan has said that though Japan’s ties with the US will continue to remain the core of Japan’s foreign policy, Japan’s ties with China would also be valued. There are divergent opinions in Japan on this, however. For example, Motofumi Asai, President of Hiroshima Peace Institute, a premier research centre on peace, is of the opinion that Japan needs to end its overly dependent relationship with the US and “start taking a fresh look at US relations from a fundamental point of view.” Asai finds fault with past governments for not taking a stronger stance towards the US. Asai observes: “Japan needs to take a stand against the US and say that the Japanese public is saying ‘no’ and that if the situation doesn’t improve, bilateral ties could be strained.”6

    As regards relations with China, Kan recognizes the importance of economic interdependence between the two countries. At the same time, Japan is aware of the tensions in the East China Sea, where the Chinese Navy and the Japanese Self Defence Forces look at each other with suspicious eyes. Some China watchers in Japan, including Asai, however, do not see China as a threat and blame the media for “overreacting”. Far from seeing China as a threat, Japan seems to be more concerned by the world perception of itself as an “economic dwarf” and a “political pigmy” vis-à-vis China, as a China analyst recently described to the author about Japan’s present status in the world.

    The immediate task before Kan, however, is to restructure the country’s economy and finances. Strengthening the country’s social welfare system is yet another priority. The stigma of the DPJ following the political fund scandal involving Hatoyama and Ozawa Ichiro (who too resigned as DPJ’s secretary general) also must be removed and the party’s image as a clean party must be reconstructed.7 During Ozawa’s tenure as secretary general, there was a lack of transparency on discussions on policy matters and this aberration needs to be corrected. While addressing issues that remained unaccomplished during Hatoyama, Kan has to present a convincing vision of Japan’s future to the people if he aims to restore the public trust.

    Kan faces a moribund economy and a snowballing government debt. His immediate task would be fiscal reconstruction and plug holes that have led to debts increasing endlessly, amounting to some 180 per cent of the gross domestic product. Hiking the consumption tax is one option but can prove risky. Even the popular Koizumi was tempted for a while but refrained from this step due to fear of a public backlash. Kan is likely to unveil in late June a national economic growth strategy and fiscal discipline aimed at stimulating demand. As the deputy prime minister, Kan had declared in November 2009 that Japan was in a state of deflation for which liquidity crunch was the main reason since Japanese people and companies have a great propensity to save money instead of purchasing and investing. Being an advocate of a weaker yen, he has pressured the Bank of Japan to adopt more aggressive monetary policies so that the pressure on the business community is eased somewhat.

    Though foreign affairs are important, getting the economy back on track would be Kan’s top most priority. With an image of a fiscal conservative, he is in favour of raising Japan’s 5 per cent sales tax. Economists say that this is vital to raise funds needed for meeting the huge social welfare costs of a greying society. In particular, if Kan pursues his fiscal policies aimed at keeping the yen weak, one can expect buoyancy in the stock market in the coming months. A weaker currency will help the Nikkei to inch closer to the 10,000-mark. If Kan can make that happen, one can expect the Japanese economy to rebound slowly.