Parties must spell out their visions for Japanese recovery

As political gridlock continues and the economy staggers along, the people’s sense that the country is stagnating has been growing. How can the nation overcome this situation?

During the upcoming House of Representatives election campaign, we urge each party to present the course they want Japan to pursue and a new “vision” for this nation. Each party then needs to provide voters with detailed policy proposals based on these ideas.

In his book, Economy, Trade and Industry, Minister Yukio Edano pointed out that the nation must wake up from its dreamlike “growth illusion” and face up to reality. Edano argues that Japan, which has become a mature society, can no longer expect growth to just happen. Even maintaining Japan’s economic vigour is not an easy task, he says.

Behind the failure of the Democratic Party of Japan-led administration to hammer out an effective growth strategy and economy-boosting measures, we suspect “pessimism” like Edano’s is rooted in people’s minds.

But if economic sluggishness and deflation continue, which leads to negative growth, it might further hollow out the nation’s industry and shake the foundation of social security systems and national security.

Consequently, we believe it essential for the nation to pursue stable growth and enhance its international competitiveness so it can maintain its national strength.

How to overcome deflation, reignite the economy and rectify disparities are probably the issues of most interest to people ahead of the election.

Liberal Democratic Party (LDP) President Shinzo Abe has said his administration, if realised, would work closely with the Bank of Japan in policy coordination to implement bold monetary easing measures. He also said the LDP-led administration would reinvigorate regional economies by “improving infrastructure to serve as investment for the future”.

Prime Minister Yoshihiko Noda had few kind words for the LDP plan, saying, “I don’t think Japan can be revitalised through a policy of promoting lavish public works projects.” Instead, he again trumpeted his government’s revitalisation strategy aimed at fostering new markets in such fields as the environment and medicine, and creating jobs.

But this strategy has so far produced little. The DPJ should present more convincing economic measures.

Japan’s future will be swayed by whether it participates in the Trans-Pacific Partnership trade framework to harness the vigour of rapidly growing Asian economies. The DPJ and Nippon Ishin no Kai (Japan Restoration Party) are set to support joining the TPP talks.

The LDP has taken a cautious stance on the TPP. It opposes the nation’s participation in TPP negotiations as long as the pact is premised on the elimination of all tariffs “without sanctuary”. But Abe, stressing the LDP’s bargaining leverage, is poised to shift to a stance that supports participation in the talks. This change of tack is reasonable since the party seeks to return to power.

In preparation for further market liberalisation, deeper discussions should be held on how to strengthen the international competitiveness of Japan’s agricultural sector.

Deciding on an energy policy – especially what to do with the nation’s nuclear power plants – will also be essential in designing Japan’s future.

The DPJ has declared a policy of achieving “zero nuclear power generation” by the 2030s. However, it is naive to expect that renewable energy sources, such as solar and wind will smoothly become more widely used. Japan’s trade deficit has reached a record high, partly due to increased costs for fuel for thermal power generation as a substitute for idle nuclear reactors. It seems unavoidable that electricity charges will be raised further.

There also are fears that abolishing nuclear plants will lead to increased greenhouse gas emissions, which will have an adverse impact on the environment.

It is irresponsible to tout the “zero nuclear” policy without showing a concrete path to achieve this goal. The business world and the US, which concluded a nuclear energy cooperation agreement with Japan, have expressed strong concern over the nation’s energy policy. On this point, we applaud the LDP for declaring it will “act responsibly” to restart idle nuclear plants after it returns to power. We urge the party to reveal its medium- to long-term energy policy as well.

Integrated reform of the social security and tax systems will also be a major issue, as some parties have called for the consumption tax increase to be annulled or frozen. Under the law on integrated reform, enacted through concerted efforts by the DPJ, LDP and New Komeito, consumption tax will be raised from 5 per cent to 8 per cent in April 2014, and to 10 per cent in October 2015. In our view, parties are just pandering to the public if their objective is only to prevent the consumption tax from being raised. They need to clarify how else they could fund social security costs, which are increasing by US$12.2 billion every year, and rebuild the nation’s finances.

In its campaign manifesto for the December 16 election, Komeito included a pledge to introduce a reduced consumption tax rate for daily necessities, to alleviate the burden on low-income earners. We believe this reduced rate issue also might become a major topic during the campaign.

Depending on the outcome of the election, a new administration could come to power. However, the nation’s basic policies on diplomacy and national security, which have their foundations in the Japan-US alliance, should be resolutely maintained.

Parties should spell out their plans for rebuilding ties with China and South Korea, which have been seriously strained by tensions over the Senkaku and Takeshima islands, respectively. They also should actively debate issues such as whether to enable Japan to exercise its right to collective self-defence and to relocate the US Marines’ Futenma Air Station in Okinawa.

Regarding reform of the lower House electoral system, various problems have been pointed out in the current system that combines single-seat constituencies with proportional representation. We expect parties to address this matter, including whether to reintroduce a multi-member constituency system.

Parties must not skirt the issue of the division of roles between the two houses – a point that has plagued the bicameral system. The House of Councillors, which wields too much power, is urgently in need of reconstruction, and the nation’s political functions must be restored.

Finally, we want to remind all parties that whether to amend the Constitution also is an important topic that deserves to be debated in the election campaign.