30th August Japanese elections that LDP could lose

Published in The Daily Star, July 18, 2009

JAPANESE Prime Minister Taro Aso's tenuous tenure seems set to end as he was forced to declare elections for the Lower House following his party's disastrous performance at the Tokyo Metropolitan Assembly elections, winning only 38 seats against the Opposition Democratic Party of Japan's 54 seats. After Koizumi left in 2006 completing a record five years in office, Aso became the third Prime Minister in September 2008 and has ever since been under the threat of losing his job. According to most predictions, he may have set the LDP on course to yield to the DPJ the chance to form the next government in the elections scheduled to be held on August 30th.

Aso, in any case, could hold on to power only till October this year when the tenure of the current Lower House would end mandatorily. He took the chance to dissolve the Lower House following the LDP's disastrous performance in Tokyo Metropolitan Assembly to lead the LDP in the next elections. If he had not dissolved the Lower House to call the elections, he would have surely been forced to quit. Tokyo Metropolitan Assembly elections should not usually play a role in national politics for it never has. Since April, the LDP lost four regional elections on the trot before the Tokyo elections, which made the defeat in Tokyo so significant.

Japanese voters were becoming increasingly disappointed with the performance of the LDP since the departure of former Prime Minister Junichiro Koizumi. Their disappointment has been enhanced during Taro Aso's less than a year's tenure by a series of gaffes, a lot of which were contributed by the Prime Minister himself, and economic problems that have led to frequent calls for his resignation. In a highly publicized incident, one of his ministers came to a press interview, while abroad, drunk. Taro Aso has been well known for his gaffes and controversial statements ever since he entered politics, which he continued even as Prime Minister. Some of these gaffes have also offended the voters, for example his remarks criticizing the elderly for racking up medical expenses and being a tax burden that created uproar. He often appeared in front pages of leading Japanese newspapers for his frequent gaffes and controversial statements.

In Japan's conservative politics the LDP has held office since 1955, losing power only briefly in 1993. Nevertheless, there has been constant discussion and criticism in Japan about LDP's style of politics. There are many who feel that it is necessary to change either that style of politics or to give power to some other party other than the LDP. During Koizumi's tenure, many had expected that LDP would change permanently. Koizumi changed the old style of politics within the faction ridden LDP. Before, faction bosses determined the fate of the party and the country issues behind the scene where even the Prime Minister had little influence in the choice of the Cabinet.

In five years, Koizumi turned LDP's politics upside down. He all but destroyed the factions and the role of their bosses. In 2005, he did something unique in Japan's politics. On losing a bill of privatization of the postal services in the Upper House where some members of his own party voted against the LDP, he dissolved the Lower House and called for elections that most analysts thought LDP would lose badly. In that election, he not only took on the opposition but also his own party members who voted against the party on the issue of the postal service privatization bill. He also did something even more dramatic: he nominated nearly 100 candidates who were fresh in politics, fondly called “Koizumi's kids”. He fielded them against veteran opposition candidates and his own party renegades and succeeded in winning the elections with a 2/3rd majority.

Japanese politics relented back to age old traditions with factions and faction bosses regaining most of their historical strength and influence once Koizumi left the scene. The Koizumi kids are forgotten and the LDP has once again become a revolving door of Prime Ministers with Taro Aso the third in 2 years. Although Aso has been forced to dissolve the Lower House in the backdrop of the disastrous Tokyo Assembly elections, the numbers that have been coming to the media on his government's performance and his own popularity rating have been equally disastrous, if not more. Aso's popularity was down to 20% when the Prime Minister decided to call the elections. If the LDP had not lost so disastrously in Tokyo or the end of the term of the Lower House was so imminent, Aso would have gone the same way as his two predecessors Shinzo Abe and Yasuo Fukuda.

The LDP is suffering from leadership crisis at this moment. There is no one in the party with the charisma or the leadership qualities required to get the LDP out of the present slump. In a way, Koizumi's five years dominance of LDP and his style of running the party did not allow leaders to grow, who would have the vision to carry forward the directions that Koizumi had set for the LDP. Even within the LDP, there is little optimism today that the party under Taro Aso would be able to turn this election around. In fact, some of the senior members of the party are hoping that the DPJ would win and then make a mess of governance due to its inexperience so that the voters would soon give their support to the LDP to form government once again. These perceptions notwithstanding, there has to be a dramatic change in voters' preference to send the DPJ to power. The LDP has 303 seats and its ally, the New Komeito has 31 against the DPJ's 112 in a Lower House of 483.

The DPJ's best bet in winning would rest primarily on the voters' disenchantment with the LDP's style of politics and the need for a change. The disenchantment of the voters has been reinforced by all three successors of Koizumi with Aso making the best effort in this regard. His challenger is DPJ's President Kunio Hatoyoma, who has a PhD degree from Stanford and a political lineage to match if not better than that of Aso. Kunio Hatoyoma is the grandson of former Prime Minister Ichihiro Hatoyoma and his father was a former Foreign Minister of Japan. Kunio Hatoyoma has called for a new era of politics in Japan that should be inspired by Barak Obama's election as the President of USA. He has also made promises that should be attractive for the Japanese voters yearning to replace Aso. The DPJ has promised to improve welfare measures, lower cost of education, reduce bureaucracy and strengthen the agriculture sector. The voters could very well back the DPJ for these promises in the coming elections.

The next Japanese elections will be interesting as it will be one where the LDP will have to do something extraordinary to win or the DPJ something disastrous to lose. In case of a DPJ victory, Japanese politics could witness the beginning of a new era with the end of more than six decades of LDP's stranglehold on power.

Japanese investment in BD: Pros and cons

Japanese Ambassador His Excellency Masayuki Inonyue had done two notable things since December 29th elections. He arranged a telephone conversation between Prime Minister Sheikh Hasina and the Japanese Prime Minister Mr. Taro Aso that should lead to positive developments in bilateral cooperation. Then in a seminar on export diversification he told his audience of businessmen that following the transition to democracy that will inspire Japanese investors, this is “very right time“ to attract Japanese investment, an advice if followed professionally could have dramatic impact on Bangladesh's economic development.

My four-year long tenure in Japan as Ambassador till April 2006 exposed me to many wonderful things about the country that has practically no natural resources. Japan was devastated following the Second World War. Yet, with great leadership and dedication of her people, Japan has become the second largest economy in the world. Japan's economic prowess is also another aspect that would strike anyone with awe and wonder. Unlike other developed nations, Japan has built up huge cash reserves both in the private and public sectors. These reserves have gone to China, Malaysia, Indonesia, and Vietnam as FDI, turning these countries from economic obscurity to economic prosperity.

During a farewell lunch hosted by the head of Japan's External Trade Organization (JETRO) I was told that Japan's investments in China had become saturated and unstable due to Sino-Japanese tension and Japanese companies were seeking newer pastures for relocating part of their investments within the concept of China plus one. He said in that context Bangladesh figured in the consideration of many Japanese investors for her strategic location in the mouth of the Bay of Bengal as a bridge between South and Southeast Asia. In my discussions with Japanese business chambers during my tenure, I could sense a clear interest among many of them in looking at Bangladesh as a serious investment destination. In fact, during the visit of Prime Minister Khaldea Zia to Japan in June 2005, there was an overflow of participants at her seminar on investment opportunities in Bangladesh that was held at the Keiderenan, the apex chamber of big businesses of Japan.

Japanese investment in Bangladesh has been negligible despite interest among Japanese investors. Japan ranked a lowly tenth among investing countries in 2006 with US $ 22.7 million in investment. During the era of elected Governments till 1/11, Bangladesh has talked a lot about the country being a great investment destination that was not matched at the delivery level. The last BNP Government had projected the Board of Investment as a one-stop investment body that would take care of all the needs of an investor. The Japanese Ambassador at that time addressed a letter that was leaked to the press that highlighted that the BoI was just another layer in the bureaucratic red tape that made investment more difficult and cumbersome. He cited corruption and red tapism as major obstacles that were dissuading Japanese investors. In a meeting of Japan Bangladesh Committee for Commercial and Economic Cooperation (JBCCEC) held in Tokyo in June 2000, political instability, red tapism and power problem were identified as the main obstacles for Japanese investment although the leader of the Japanese side at the meeting acknowledged Bangladesh's potentials. He had said: “"Bangladesh's labor is cheaper from security perspective, it enjoys very good position, and it has no ethnic problem and war like Sri Lanka.”

Bangladesh has never truly understood the importance of Japanese investment, definitely not in the way Malaysia has. When Mahathir Mohammad became the Prime Minister, he saw his neighbour Japan with too much cash reserves to invest. He took charge and adjusted his country's investment laws to suit the needs of Japanese investors and investment from Japan followed like water seeks its own level when obstacles are removed. Of course Malaysia simultaneously extended the infrastructure support needed for foreign investment, of which uninterrupted power supply is absolutely indispensible. At present times, it is not that just the Japanese investors in China are interested to relocate part of their Chinese investments in another destination. In Japan too, investors are looking for new investment destinations as the Japanese Ambassador has clearly hinted. When Mr. Koizumi was the Prime Minister, his favourite priority was to privatize the postal service so that the US$ 3 trillion lying idle there could be invested. That money will also come in the market for investment. There is enough cash in Japan waiting for foreign investment opportunities despite the economic meltdown in US that has pushed Japan into recession.

At a time when foreign aid from Bangladesh's development partners is declining, FDI is the most attractive alternative. Bangladesh's huge population, added to points already noted like good human resources and geographical location are extremely favourable incentives for attracting Japanese FDI. An added incentive could be the future prospect of South Asia under SAARC and BMSTEC becoming free trading zones that would attract any FDI to Bangladesh like the pin to the magnet for then one would also be speaking of a market of nearly 2 billion people. In this context, Japan should be the number one priority country with which to pursue the country's economic diplomacy. When the chief of Toyota visited Russia under President Putin, the latter spent a lot of time with the former to impress Toyota to set up a plant in Russia. That is the sort of wooing that would be required to bring Japanese investment to Bangladesh.

The democratic elections in Bangladesh have set the stage to bring Japanese FDI. However, there has to be major changes in mindset and infrastructure development to achieve the desired result. In an age of transparency, slogans will not get Bangladesh anywhere. It is time to make BoI the one stop investment institution by action and not words so that Japanese investors given permission for electricity, gas and telephone connections do not have to go to the utility companies for their permission as well. When all these are done so that there is no gap between what is said and what the investor receives, it will be the turn of the Prime Minister to give acquiring FDI investment from Japan the same leadership that Mahathir Mohammed gave in Malaysia when he acquired Japanese investment for his country. The Prime Minister could do so by undertaking an official visit to Japan and meeting the Japanese Prime Minister, political leaders, businessmen and investors. Bangladesh could seriously consider setting up an exclusive Japanese Economic Zone that the Prime Minister could announce during this trip. The bottom line is Japanese FDI could transform Bangladesh in a major way in the quickest possible time.

This Government has not started on the wrong foot with Japan as the last BNP Government had. The BNP Government had unilaterally cancelled the DAP 11 Agreement with Japan on assuming office that had infuriated them and relations were put on a limbo till the project was reactivated a year and half later. It was a very insensitive decision because Japan provides to Bangladesh assistance totaling around US$ 300 million a year that is more than double of what the US provides, and additionally Japan has unquestioned FDI potentials. Bangladesh's development partners who contribute far less act as pay masters. It is ”very right time” to make serious efforts to attract Japanese investment by letting Japanese businessmen and investors know that Bangladesh is willing to do its part to attract Japanese FDI. In this context, the Foreign Ministry must start the process immediately to arrange an official visit of the Prime Minister to Japan for attracting Japanese investment. Prime Minister Aso is disposed favourably towards Bangladesh and may not last long as Japanese elections are due later this year and elections may be called even earlier. To get maximum mileage in terms of furthering economic diplomacy with FDI as a major target, the visit should be arranged during Mr. Aso's watch.

Koizumi Departs

Published in New Age, September 27, 2006

As Koizumi departs a star sets over Japan

Japan after Koizumi will continue to remain the world’s second biggest economy, perhaps achieve more economic miracles but the nearly 5 years and five months of flamboyance and focus that Japan enjoyed under Koizumi’s tenure will take some efforts, luck, and a host of other factors to achieve again…. Japan and the world will be poorer without Koizumi, writes M Serajul Islam

In the land of the Rising Sun, a star has set. Prime minister Junichiro Koizumi stepped down as prime minister when Shinzo Abe assumed office of president of the ruling Liberal Democratic Party (LDP) on 26 September which has ruled Japan since 1955 except for a few months in 1993. Koizumi had been Prime Minister for 5 years and five months that is in LDP’s factionalised politics almost a miracle making his tenure the third longest among Japan’s post-Second World War prime ministers. What makes Koizumi’s tenure exceptional is the fact that he stayed in power by dismantling almost all traditions in LDP’s secretive politics. In a society where consensus is of the essence, he stamped his own will and vision in all major decisions while he has been in power. Koizumi’s departure will end an era in Japan’s politics during which he split open Japan’s politics and economy and subjected both to much needed reforms that everyone thought were necessary but no one before him dared to undertake.

Koizumi’s long tenure defies any simple explanation because the odds he had to fight to remain in office have been tremendous. He inherited an office where power before him was exercised on the prime minister’s behalf by bosses of the factions of the ruling LDP. He inherited an economy that was stagnating because no prime minister before him had the courage or the political will to make the structural reforms that were necessary after the bubble economy burst in the early 1990s because a nexus among powerful politicians, bureaucrats and private sector stood in the way. Where no prime minister before him dared to tread because of these odds, Koizumi did so fearlessly and set into motion the reform agenda he had articulated in his mind from his long experience in politics. It may be too early to tell whether the path that Koizumi charted for his country will be successful for his reforms are still in incubation but by bringing the much needed reforms into the centre of the political stage, Koizumi has charted for Japan a course that no one contradicts was necessary.

A quintessential reformer
Koizumi has been the quintessential reformer. His family and political background both set him up for the role. An economics graduate of the prestigious Keio University, Koizumi went to England for further studies but returned without finishing his studies following the death of his father. In 1970, he became a political aide to Takeo Fukuda, later to become prime minister. As parliamentary vice-minister of finance (1979), minister of health (1988 and 1996) and minister of post and telecommunications (1992) he watched from very close quarters how an old generation of LDP leaders without a vision for the future was resisting change to maintain their privileges. He also prepared himself for his reform role from lessons he drew from historical figures such as Shoin Yoshida (1830-1859), a patriot and scholar, who in the turbulent period before the Meiji Restoration showed courage and conviction as an educator that helped produce many outstanding men who led Japan during the Meiji Restoration that ushered the country’s modern era. His other respected historical personality is Winston Churchill who influenced him by his indomitable sprit in fighting Hitler. His brief marriage in the late 1970s ended when his wife was pregnant with a third son who he never saw nor showed any inclination to see.

By the time he became prime minister, his politics and his vision for reforms were his sole focus in life. In his mind, he understood the reforms that needed to be taken for Japan’s future very clearly. Thus he could say upon becoming prime minister ‘I want to destroy the old LDP’ because he saw the resistance to change and reform that were necessary for Japan’s future embedded in his own party. He took up each reform issue separately with dedication that was awesome. In politics, he assessed that a weak prime minister, prey to faction bosses, was the crucial problem. Koizumi was thus determined to wrest power from the faction bosses and make the prime minister’s office powerful from day one in office. When Koizumi assumed office there were a number of factions in the LDP of which the Mori faction to which he himself belonged and the Hashimoto faction being the two largest. Behind the scenes, the faction bosses manoeuvred and controlled the members of the LDP, chose the prime ministers, selected for them their cabinets and also set their agendas. Koizumi’s first task was to take power away from the faction bosses. Upon becoming prime minister, he did not allow them to choose either his cabinet or the agenda of his government. He did so ruthlessly but efficiently without much more than a murmur. He encouraged young LDP parliamentarians to remain out of the influence of the factions. In fact, in the elections held last year, he brought to politics at least 80 young parliamentarians who have been given the name ‘Koizumi kids’. Koizumi personally encouraged these young Diet members not to sign into any faction in his desire to end the rule of the faction bosses within the LDP.

Economic reforms
In the economy, Koizumi’s reforms focused on breaking the hold of the central government over the local governments. He was keen to break the powerful ministry of finance that he identified as the root of many problems in the economy. In this regard, the trinity of reform package was the most important one. That package proposes to decentralise the financial powers of taxation from the centre to the local governments. Reforms have also been undertaken to cut down huge government expenditures.

Koizumi’s other key reform of the economy has been the privatisation of the postal services for which last year he even put his own future and his party’s at stake by dissolving the parliament and seeking an early election when some of his own members voted with the opposition to defeat the bills related to postal privatisation in the upper house. The privatisation of the postal services will release US$ 3 trillions for fruitful use, money that now languishes in deposits that are honey upon which the politicians and local-level bureaucrats infest. Once privatised, the postal service now employing close to 300,000 people will also be able to get rid of a huge and largely unnecessary bureaucracy.

In effect, Koizumi’s economic reforms have been directed in reducing the influence of the politicians and the bureaucrats who use the central government’s financial resources to indulge in huge public expenditures, a lot of them un-necessary, which have become breeding grounds of corruption. His focus was upon reducing the central government’s power, influence and expenditures through decentralisation.

International politics
In international politics, Koizumi gave Japan a new assertiveness. On Iraq, he went along with the USA, despite considerable opposition at home because he considered it necessary for strengthening the US-Japan strategic alliance. During his term, the Japan-US strategic alliance was reassessed and strengthened. He developed extremely close friendship with Bush.

Yet, when he needed to deal with the issues of the 13 abductees who were kidnapped to North Korea in the 1970s and 1980s, an issue that touches the psyche of every Japanese, he went to Pyongyang in September, 2002, against the United States’ expressed wishes and was able to bring back some of the abductees while getting information about a few others.

His yearly visits to the Yasukuni Shrine where 12 convicted and two indicted Class-A war criminals are enshrined have been made without fuss because he considered those visits necessary not to offend his neighbours but to encourage resurgent Japanese nationalism that has been suppressed for too long by what he believed to be imposed pacifism that is no longer consistent with Japan’s future when there is so much tension in the Korean Peninsula because of North Korea and her nuclear threat.

The US$ 10 billion fund evolved last year for helping the least developed countries has been another positive Koizumi initiative.

The legacy
How will history assess Koizumi? There are conflicting views. The majority view though is positive. He used his good looks and charismatic charm to cast spell upon his people who found in him the star appeal that Japanese politicians are known not to have. His reforms of the economy have set to motion many positive forces but it will take time to see the overall results. Also, the results will depend upon his successor’s will to pursue the reforms.

However, there are a few undeniable facts in favour of Koizumi. The mountain of bad debts at the banks has shrunk and the Nikkei stock exchange has swelled. The Japanese economy, after years of deflation and stagnation, is showing signs of sustainable recovery. His emphasis in breaking down the nexus among the politicians, bureaucracy and the private sector has been welcomed by his countrymen. Similarly, his trinity of reform package to decentralise the financial powers from the sentre to the local governments; steps to reduce public spending and reforms aimed at deregulating industries have also been well received.

Koizumi’s reforms have been directed towards taking power away from the politicians and the bureaucrats who between them have sustained a system where both have benefited greatly in receiving financial benefits and related perks from the private sector. Last year, when his Postal Privatisation Bills were defeated in the upper house of parliament, Koizumi immediately dissolved parliament that he did not have to as losing a bill in upper house was not a test of confidence. His onetime mentor, former prime minister Mori, had advised him against the decision and for a brief period, there was talk in Tokyo that Koizumi’s decision would bring the end of the LDP’s almost stranglehold on power. Koizumi fought that election almost single-handedly, a fight that was as much with the opposition as was with members of his own party who opposed him on the Postal Privatisation Bill. He ensured that all the opponents in his party were just not thrown from the LDP, but that they also did not return to the parliament individually. He ensured both by nominating against the “postal rebels” the best LDP candidates and himself campaigned with the voters to defeat them. By appealing to the people directly with his charisma, Koizumi won for the LDP a 2/3rd majority that was a gamble that Koizumi alone could take and a miracle that he alone could achieve.

In foreign affairs, his supporters will speak in glowing terms for he gave Japan new assertiveness against his predecessors’ timid initiatives.

Koizumi has critics nevertheless. He will be criticised for his authoritarian manner where he has dealt with opposition ruthlessly and mercilessly. Koizumi will also be criticised for his over-zealousness on reforms while paying too little attention on Japanese society and its problems such as her aging and declining population, the needs of social security nets, etc. Minoru Morita, an elder journalist of Japan and a well known Koizumi critic, says this of his administration: ‘The Koizumi administration was the worst possible for the Japanese people. In terms of foreign diplomacy, it worsened relations with neighbouring countries, while domestically it spawned severe disparities within society. A small number of people reaped benefits. The great majority, however, suffered considerable disadvantage and lost hope.’ Morita credits Koizumi or creating a new class called ‘freeters’ who he describes as ‘hordes of directionless young workers who drift from one low-paid job to another without gaining marketable skills’.

Koizumi, his critics will also say, has destroyed the old Japan, its paternalistic political order in particular but he has failed to bring a consensus among the Japanese who, while giving him the best approval rating of 50% among Japan’s long serving prime ministers, also acknowledge that he has shaken up Japan and in that, he has destroyed both the bad and the good of that Japan. Hence they fear that there could be a backlash to his reforms.

Japan’s failure to win the permanent seat in the UN Security Council because of her hasty decision to join the G4 Group will no doubt be seen by critics as a failure of Japan’s foreign policy under Koizumi’s watch who will likewise criticize Koizumi for bringing Japan’ relations with China to an all-time low.

Koizumi’s successor, Shinzo Abe, has vowed to continue with the reforms. Abe has shared a lot of the Koizumi vision as the LDP secretary-general (2003) and later as chief cabinet secretary (2005). However, Koizumi has been the reformer willing to bet his future and his party’s on both instincts and beliefs. He did not hesitate in reducing wasteful public expenditures that have traditionally won the LDP votes across the country. It is unlikely Abe will be a reformer in the Koizumi mould. Koizumi has also been immensely lucky as was the case with his decision to dispatch SDF forces to Iraq where a few deaths would have been disaster for him. In Iraq where all countries who dispatched troops have lost some of them, Japan was the lucky country whose troops returned unharmed and the benefit of that luck has gone entirely all to Koizumi.

Japan after Koizumi will continue to remain the world’s second biggest economy, perhaps achieve more economic miracles but the nearly 5 years and five months of flamboyance and focus that Japan enjoyed under Koizumi’s tenure will take some efforts, luck, and a host of other factors to achieve again. Tanaka, the Foreign Minister he once sacked, called him a weirdo, others have called him a maverick but in the end when he leaves, he will be loved by many more people than will criticise him because politicians like Koizumi come upon a people at very large intervals. Abe will become Prime Minister without any past ministerial experience but great family connections and may eventually make a very good prime minister but Japan and the world will be poorer without Koizumi.

The writer is a former ambassador of Bangladesh to Japan. He can be reached at Serajul_islam@uignet.com