Elected four years ago after promising ‘reform’ at any price, Koizumi Junichiro has now secured an even bigger majority by making the same pledge again, having failed in the meantime to make any headway against Japan’s social or economic malaise. The longest-serving prime minister for decades, he succeeded in presenting himself—above all on tv—as a crusading force for change. The outcome of the Lower House election on 11 September 2005 was widely hailed as a historic landslide, both in Japan and in the Western media. Yet Koizumi won the support of only 29 per cent of the total electorate, and received only 38 per cent of votes cast. That the ldp now occupies 62 per cent of seats—296 out of 480, up by 59 from the previous Diet—owes more to the iniquitous Japanese electoral system than to the enthusiasms of the voters.
The occasion for the snap election was the defeat of Koizumi’s Japan Post privatization measures on 8 August 2005. The new legislation proposed to separate the four existing entities of the postal system (savings, insurance, local branches and mail delivery) into discrete enterprises by 2007, with full privatization by 2017. The bill was defeated by 17 votes in the Upper House, with 37 ldp members voting against their government. It was, at the least, stretching the constitution to call an election in order to win a faction fight within the ruling party, and to dissolve the (legislatively superior) Lower House to punish a negative vote in the upper chamber. The only constitutional provision for a confrontation between the Houses of the Diet, under Article 59.ii, is for the bill to be remitted to the Lower House, where it would pass into law provided it secured a two-thirds majority. Koizumi knew that to be impossible, and hence took the decision to dissolve.
No recent election campaign, even in the us, has hinged so much on style. Like Blair and Berlusconi, Koizumi has a certain thespian flair and likes to cast himself in swashbuckling samurai roles. His open-necked shirts, bouffant hairdo and passionate monosyllabic grunts formed the substance of the late August campaign, backed up by government promotion on tv of an informal ‘cool biz’ summer look. It was essentially a one-man campaign, Koizumi his own Karl Rove. The prime minister particularly likes to identify himself with the 16th-century warlord Oda Nobunaga, citing with glee a recent popularization in which Nobunaga roars, ‘I have decided to rid the world of this trash’ as he storms up Mount Hiei, burning Enryakuji Temple to the ground and slaughtering thousands of oppositional Buddhist monks in the process. The ldp deputies who had voted against the postal privatization were similarly denounced as traitors and rebels, and dismissed from the party. High-profile media figures with no political experience—an ex-beauty queen, a pretty pastry chef—were sent as ‘assassins’, to run against them in their constituencies. With the tv channels and mass media behind him, Koizumi seized the political initiative and ran with it, turning the legislative elections into a single-issue plebiscite: the election was about ‘reform’, and reform meant privatization of Japan Post—Yes or No?
Washington has been pressing for privatization of the postal service—above all, its $3.3 trillion Postal Savings System—for years. Japan Post is a unique institution. It handles not only the management of 25,000 local branches—the central social institution in many rural and island communities—and nation-wide postal delivery, but also the country’s major savings and life-insurance systems. In this latter capacity, it now sits atop the world’s largest pool of funds: over $2 trillion in savings accounts and over $1 trillion in insurance policies, representing around a third of the Japanese life-insurance market. Its assets are over twice the size of Citigroup’s.
Despite the Big Bang deregulation of Japanese financial markets in 1998, people have preferred to entrust their money to the security of the Postal Savings System, even with interest rates under 1 per cent, rather than expose it to the risks of casino capitalism. These funds have long been allocated for national-development purposes under the system known as the ‘construction state’ or doken kokka, built up in the 1970s under the long official and unofficial reign of Tanaka Kakuei.footnote1 This form of bureaucratic developmentalism proved, in some respects, a Japanese variant of the Keynesian state, channelling the population’s savings and insurance funds into a wide range of semi-public bodies for the construction of highways, airports, bridges and dams under an over-arching national plan. It combined an element of social and geographical redistribution through the archipelago with plentiful opportunities for power-broking and corruption under the aegis of the ldp.
In its Cold War heyday, the doken kokka provided Japan’s population with lifetime employment, universal education and health provision, corporate welfare and the company-loyalty system. Most people felt they were middle class in those years. Yet the construction state was predicated on growth. By the late 1980s, as over-capacity continued to build in the world economy and growth slowed, its debts began to accumulate. Through the long stagnation of the post-bubble 1990s, the doken kokka became increasingly discredited for its wasteful public works, corruption and special interests. Its free-market enemies within the ldp grew more confident.
American pressure for pss privatization has been stepped up ever since the 1989 bilateral trade negotiations, known in the us as the Structural Impediment Initiative—the title softened by the Japanese Foreign Ministry to kozo kyogi, ‘structural negotiations’, to avoid the implication of peremptory us intervention in Japan’s internal affairs. The process was described by one senior official as ‘tantamount to a second occupation’.footnote2 As Post and Telecommunications Minister, Koizumi had been closely involved in the 1993 Clinton–Miyazawa round of negotiations over the ‘opening up’ of Japan’s economy. Washington’s view that public-sector control over Japan’s Post Savings System constituted an ‘impediment’ to be dismantled coincided with Koizumi’s personal interests in attacking party and factional enemies; his first political godfather had been Fukuda Takeo, Tanaka’s bitter rival in the 1970s. Elected prime minister in 2001, Koizumi rapidly reopened negotiations with Washington over ‘telecommunications, information technology, energy, medical devices and pharmaceuticals, financial services, competition policy, transparency, legal reform, commercial law revision, and distribution’; in short, pretty well everything.footnote3 Japan’s institutions were to be adjusted to American requirements.