By Chico Harlan
Monday, July 12, 2010; A09
TOKYO -- Japan's ruling party won far fewer seats than it had hoped for in a parliamentary election Sunday, signaling widespread voter dissatisfaction with its first 10 months in office and keeping it in power without a strong mandate at a time of serious economic challenges.
The progressive Democratic Party of Japan (DPJ) fell short of almost every target in the election for the upper house: With 121 seats up for grabs, it needed 60 for a majority and 54 to meet Prime Minister Naoto Kan's goal. Instead, it won 44 seats, according to unofficial results, guaranteeing the opposition control of the upper house -- a "twisted" Diet that will thwart ambitious legislation.
No Japanese prime minister in the past four years -- there have been five in that span -- has found the muscle or will to confront a stagnant economy and a worrisome national debt. These results will not knock the DPJ out of office, because it has a majority in the more powerful lower house. But Sunday's election, analysts said, raises the likelihood that feeble leadership will continue.
Kan, inaugurated June 8, spent his first month in office talking about the need for a drastic increase in the consumption tax, only to back away later when confronted with public opposition. His approval ratings, once close to 70 percent, gradually dropped more than 20 percentage points. As Sunday's results came in, mainstream Japanese media speculated that Kan might not be able to survive the year -- especially with the DPJ holding September elections for the position of party president. (As a general practice, the ruling party's president becomes the nation's prime minister.)
Kan said Sunday evening that he would not resign, and Goshi Hosono, acting secretary general of the DPJ, said on television, "There will be no crack in the DPJ as a result of this election."
The election results indicate the once-giant Liberal Democratic Party (LDP) has reawakened as a political force. The LDP, the dominant force for a half-century until it lost power last summer, held 38 of the contested seats but won 51 -- far more than predicted even a week ago. The newly formed Your Party, which opposes tax increases, claimed 10 seats. Previously, it had none.
In a survey conducted by the Asahi newspaper in the days before the election, 63 percent of respondents disapproved of Kan's consumption tax proposal. In this case, Japanese political analysts said, public frustration with the government will lead to a frustrated government.
"The opposition will try to create a sense of crisis, and Kan could be wounded," said Gerry Curtis, a Columbia University professor and an expert on Japanese politics. "If the DPJ doesn't have a coalition majority, they're going to be really stymied. Gridlock will be enforced. Not much will happen. It's not an optimistic outcome."
Kan's proposal to increase the consumption tax from 5 to 10 percent dominated national debate in the weeks before the election. Among economists, there is near-unanimous agreement that Japan must increase the tax -- a means to offset a graying population, declining workforce and a debt nearly twice the size of the gross domestic product.
But opinions differ widely on when to increase the tax and how. A recent report from the International Monetary Fund suggests a "gradual increase," beginning in 2011. Kan had said that the tax increase necessary to prevent a Greece-like debt crisis. Amid the opposition, though, Kan softened his stance and eventually said he wouldn't touch the tax issue for three years.
If Kan continues to flounder, he could open the door for a challenge from Ichiro Ozawa, a polarizing DPJ power broker who resigned as secretary general in June, along with unpopular Prime Minister Yukio Hatoyama. Though Ozawa got embroiled in a scandal involving fundraising abuses among his staff members, he enjoys deep loyalty from a faction of parliament members. During the election campaign, Ozawa criticized Kan for focusing on the tax issue.
With the world's highest proportion of elderly and lowest proportion of children, Japan is entering an unprecedented demographic battle. By 2055, at the current rate, 41 percent of the population will be older than 65. Two decades have passed since the bubble economy burst, leading to what DPJ chief cabinet secretary Yoshito Sengoku described as a "great Japanese malaise."
"When we look at the Japanese people, they look to the future and are filled with this anxiety about how they'll be able to support themselves," Sengoku said last week. "As a result, people feel they're on the precipice of falling down the hill. In Japan, the current situation is untenable. People feel, 'What problem should we tackle first?' To be perfectly honest, we don't have the answers either."