Facebook Blogging

Edward Hugh has a lively and enjoyable Facebook community where he publishes frequent breaking news economics links and short updates. If you would like to receive these updates on a regular basis and join the debate please invite Edward as a friend by clicking the Facebook link at the top of the right sidebar.

Friday, July 27, 2007

Japan's 2007 House of Councillors election

by Manuel Alvarez-Rivera, Puerto Rico

Voters in Japan go to the polls this Sunday to choose half the members of the Sangiin or House of Councillors - the upper chamber of the Japanese Parliament, the National Diet. A total of seventy-three seats will be filled in forty-seven constituencies by the semi-proportional Single Non-Transferable Vote (SNTV) system, while forty-eight seats will be allocated on a nationwide basis by proportional representation: Parliamentary Elections in Japan has further information on the House of Councillors' electoral system. In addition, GEM's Edward Hugh follows the election and its impact on the country's economy at Japan Economy Watch.

Under Japan's 1947 constitution, bills rejected by the House of Councillors can't become law unless the Shugiin or House of Representatives - the lower chamber of the Diet - overrides the upper chamber's veto by a majority of at least two-thirds. Thus, an opposition-controlled upper house can block the government's legislative agenda, although the lower chamber retains the final word on a number of important matters such as the designation of a prime minister.

Constitutional provisions notwithstanding, the 2007 upper house election has become for all intents and purposes a referendum on the ten month-old Liberal Democratic Party (LDP) government of Prime Minister Shinzo Abe, whose approval rating has fallen sharply following last May's suicide of Agriculture Minister Toshikatsu Matsuoka (who had become embroiled in a political funding scandal involving office expenses and bid-rigging of public contracts) and the disclosure of serious problems at the Social Insurance Agency, which has lost track of fifty million pension records; to add insult upon injury, an additional fourteen million records were never entered into the agency's computer system, and the municipalities previously responsible for the information have destroyed their records.

Meanwhile, the opposition Democratic Party of Japan (DPJ) has been riding on a wave of discontent in the aftermath of the pensions fiasco - a salient issue in a country whose population is both rapidly aging and gradually declining - and recent opinion polls have the DPJ ahead of the LDP by an increasingly large margin, with New Komeito - the LDP's coalition partner - in a distant third place, and the Communist and Social Democratic parties further behind.

Since 1955, the LDP - a conservative party with close ties to the business community - has been Japan's dominant political force. Until 1989, the party presided over a period of remarkable economic growth, in which Japan emerged as one of the world's major industrial powers. However, since 1990 the Japanese economy has been in and out of recession, alternating with periods of weak growth. Nonetheless, the LDP has been out of power only once during the last fifty-two years (from 1993 to 1994), although in 1989 and 1998 it suffered major defeats in elections to the House of Councillors: in both cases, the results were viewed as a popular rejection of incumbent LDP governments, and the sitting prime ministers were forced to step down. However, on both occassions the party went on to prevail in subsequent elections to the House of Representatives and remained in office.

In the last House of Councillors election, held in July 2004, the DPJ won more votes and seats than the LDP (although the latter retained control of the upper house in alliance with New Komeito - an offshoot of the lay Buddhist organization Soka Gakkai), but in an early House of Representatives election held in September 2005, the LDP government of then-Prime Minister Junichiro Koizumi won a landslide victory, trouncing the DPJ. Nonetheless, Koizumi had promised not to run for re-election as president of the LDP and stepped down from office in September 2006; Abe succeeded him as party leader and head of government.

However, Abe is widely perceived as having moved away from the reforms initiated by his popular predecessor, pursuing instead a nationalist agenda centered around a revision of the pacifist "MacArthur" constitution (imposed on Japan by the U.S. after World War II) and the establishment of an education reform intended to foster patriotism. Although Abe's seeming indifference to bread-and-butter economic issues had dented his public standing (and a number of verbal blunders by some members of his cabinet haven't helped matters either), the government appeared to have suffered no lasting damage until the suicide of cabinet minister Matsuoka and the subsequent pensions debacle, which appear to have turned public opinion strongly against Abe and the LDP.

Should voters hand the government a major setback in Sunday's vote, it is widely believed that Prime Minister Abe would have no choice but to resign, triggering a leadership battle among the LDP's various factions, and perhaps an early election for the House of Representatives - although the latter is generally regarded as unlikely to take place unless the ruling party suffers a truly catastrophic defeat at the polls.


The Liberal Democratic Party (LDP) was comprehensively defeated in Sunday's upper house vote in Japan. With all votes counted, the ruling parties lost their absolute majority in the House of Councillors, where the opposition Democratic Party of Japan (DPJ) has displaced the LDP as the largest party for the first time in more than fifty years.

According to definitive figures published by Japan's Ministry of Internal Affairs and Communications, the results of the prefectural district vote were as follows:

Democratic Party of Japan (DPJ) - 24,006,818 votes (40.5%), 40 seats
Liberal Democratic Party (LDP) - 18,606,193 votes (31.4%), 23 seats
New Komeito (NK) - 3,534,672 votes (6.0%), 2 seats
People's New Party (PNP) - 1,111,005 votes (1.9%), 1 seat
Japanese Communist Party (JCP) - 5,164,572 votes (8.7%), no seats
Social Democratic Party (SDP) - 1,352,018 votes (2.3%), no seats
Independents - 5,095,168 votes (8.6%), 7 seats
Others - 477,182 votes (0.8%), no seats

Meanwhile, the results of the party list vote were the following:

Democratic Party of Japan (DPJ) - 23,256,247 votes (39.5%), 20 seats
Liberal Democratic Party (LDP) - 16,544,761 votes (28.1%), 14 seats
New Komeito (NK) - 7,765,329 votes (13.2%), 7 seats
Japanese Communist Party (JCP) - 4,407,933 votes (7.5%), 3 seats
Social Democratic Party (SDP) - 2,634,714 votes (4.5%), 2 seats
New Party Nippon (NPN) - 1,770,707 votes (3.0%), 1 seat
People's New Party (PNP) - 1,269,209 votes (2.2%), 1 seat
Others - 1,264,800 votes (2.1%), no seats

Consequently, DPJ won 60 seats; LDP, 37; NK, 9; JCP, 3; SDP, 2; PNP, 2; NPN, 1; and Independents, 7. In all, the distribution of seats in the House of Councillors after the 2007 election will be as follows: DPJ, 109; LDP, 83; NK, 20; JCP, 7; SDP, 5; PNP, 4; NPN, 1; and Independents, 13.

In terms of both seats and vote percentages, the LDP had slightly better results than in 1989, when the party was defeated in a House of Councillors election for the first time. However, the 1989 defeat came after a landslide LDP victory in the preceding 1986 upper house election, and the LDP remained by far the largest party in the legislative body, whereas this time around the defeat followed an earlier setback in 2004, and the result was a DPJ seat plurality. Meanwhile, the LDP's junior partner, New Komeito sustained comparatively minor losses, remaining by far the country's third-largest party.

Japan's election was closely followed in Peru, as former President Alberto Fujimori - who holds dual Japanese-Peruvian nationality - ran unsuccessfully on the nationwide list of the small People's New Party. Fujimori is currently under house arrest in Chile, awaiting possible extradition to Peru, where he faces corruption and human rights violations charges.

Although Prime Minister Shinzo Abe has acknowledged his party's defeat in the election, he insists he will remain in office, and leaders of the LDP and New Komeito agreed on Monday to continue ruling in coalition with Abe as head of government. Meanwhile, the opposition DPJ is expected to continue pressing for an early House of Representatives election, which Abe has rejected so far. However, with the opposition parties set to take control of the upper house, and potentially derail the government's legislative agenda, Abe is taking his party and his country into uncharted political waters, and it remains to be seen if he will be able to weather the storm.

Abe does an about-face, and resigns after a year in power

Six weeks after his ruling Liberal Democratic Party (LDP) suffered a crushing defeat in elections to Japan's upper house of Parliament, the House of Councillors, Prime Minister Shinzo Abe announced on September 12, 2007 he will resign as head of government, after just under one year in office. However, the LDP still holds a comfortable majority in the House of Representatives - which has the last word on the appointment of a prime minister - and an early lower house election is regarded as unlikely, all the more so given the ruling party's poor showing in the recent House of Councillors poll.

Abe, who had previously insisted he would remain in office irrespective of the upper house election outcome, asked the LDP to find a replacement, and in an internal election held on Sunday, September 23, 2007, the party chose Yasuo Fukuda as its new leader. Fukuda, who was chief cabinet secretary from 2000 to 2004 under former prime ministers Yoshiro Mori and Junichiro Koizumi, easily defeated LDP secretary-general Taro Aso, who served as foreign minister under Abe and who had been initially regarded as the front runner in the ruling party's leadership race.