Japan prepares for election

Fri, Nov 16, 2012, 00:00

Japan dissolved parliament's lower house today for a December 16th election that is likely to return the long-dominant Liberal Democratic Party (LDP) to power with a conservative former prime minister at the helm.

That prospect has prompted concerns that former prime minister Shinzo Abe, who polls suggest is likely to be the next premier, will further fray ties with China, already chilled by a territorial row over a group of islands.

Few expect the election, three years after a historic victory swept the Democratic Party of Japan (DPJ) to power for the first time, will fix a policy stalemate that has plagued the economy as it struggles with an ageing population and the rapid rise of China.

"They will probably have the same problems of a revolving door at the top and a weak government that finds initiating tough reforms difficult and is tempted to enjoy nationalist grandstanding," said Jeffrey Kingston, director of Asian studies at Temple University's Japan campus.

Prime minister Yoshihiko Noda, Japan's sixth prime minister in six years and the third since the DPJ's landslide election win, had promised three months ago to set a vote date in exchange for opposition support for his pet policy to double the sales tax by 2015 to curb massive public debt.

This week he finally kept that pledge despite pressure from his own party to delay the vote, which the Democrats are widely expected to lose.

"When politics get chaotic, it is always the people who are sacrificed," Toyota Motor Corp president Akio Toyoda, who heads the auto industry lobby group, told a news conference.

"We want a leader who can understand the difficulties that the people are going through, someone who can lead to create a country and society where those who work hard are rewarded."

Policies in the spotlight include the role of the central bank in reviving an economy slipping into its fourth recession since 2000, the future of nuclear power after last year's Fukushima disaster, and whether Japan should take part in the Trans-Pacific Partnership, a US-led trade pact that Mr Noda favours joining.

The LDP said today in a draft of its economic platform that it would do its best to beat deflation, which has dogged Japan for years, and tame the strength of the yen, the source of constant complaints from the country's exporters.

It said it would achieve nominal economic growth of 3 per cent or more and revise the Bank of Japan law in a step critics worry would weaken the central bank's independence.

In recent days Mr Abe has called on the central bank to print "unlimited yen" and set interest rates at zero or below zero to boost the economy.

Reuters

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