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Economy to be Abe’s Diet focus, at least at first

by Reiji Yoshida

Staff Writer

This year’s 150-day regular Diet session will open Friday with a key policy speech by Prime Minister Shinzo Abe expected to play to his strength — the economy — rather than his controversial diplomatic or national security policies.

The administration and ruling parties say they will maintain a low profile to avoid antagonizing the opposition camp, at least until the end of March when the Diet is expected to pass the budget.

“This year, too, we’d like to put priority on the economy,” Abe said during an interview aired Jan. 16 on NHK.

But a political time bomb is ticking away, and the countdown is likely to come soon after the expected enactment of the budget.

A key security expert panel under Abe is currently set to submit its final report to the prime minister in April.

The panel, headed by former Vice Foreign Minister Shunji Yanai, will recommend that Abe change the government’s interpretation of the pacifist Constitution and allow Japan to exercise the right of collective self-defense as defined under United Nations Charter.

If Abe decides to adopt the panel’s recommendation, it would allow Japan to greatly expand the scope of military cooperation with the United States.

Revising the interpretation of the Constitution is a long-held ambition for Abe. It would likely cause an earthquake in national politics, possibly splitting both the ruling and opposition camps.

New Komeito, the LDP’s pacifist junior coalition partner, is opposed to any change in the interpretation. Meanwhile the Democratic Party of Japan, the largest opposition party, could face an internal split as many of its conservative lawmakers are pressing for the change in the interpretation in order to strengthen the Japan-U.S. military alliance.

“I think I myself well understand the position of New Komeito,” Abe said during the NHK interview.

Asked if he will change the interpretation by the end of this Diet session, Abe avoided getting pinned down.

“We won’t set a deadline. This is an important issue. . . . I’d like to have much discussion with the ruling parties,” he said.

Whether Abe will push his nationalist agenda, including the change in the constitutional interpretation, will probably depend on how much political capital he can accumulate through deft handling of key domestic issues, observers say.

In April, Abe’s administration will raise the 5 percent consumption tax to 8 percent — a move that will stoke consumer frustration.

On top of that, Abe is set by the end of the year to decide whether to raise the sales tax another 2 percentage points to 10 percent to curb the rapidly growing national debt.

“We have to use (limited) political assets, which means we can’t do everything at once,” a senior administration official said.

Abe’s advocacy of an aggressive monetary-easing policy has helped push up stock prices and push down the yen’s value against other currencies, to the benefit of major export-driven companies and big players in the stock market.

But many middle-class and low-income households are instead seeing only rising living costs as the depreciation of the yen has pushed up electricity bills and prices of imported goods.

The DPJ will try to tap into this growing frustration during the upcoming Diet session.

DPJ Secretary-General Akihiro Ohata said Jan. 16 that the party will examine if the administration will use the revenue from the sales tax hike solely to fund welfare needs, as pledged by Abe.

“We have to make clear for what purposes the government is raising the tax,” Ohata said.

The administration is currently planning to submit a bill that would further deregulate working conditions that companies can impose on temporary workers dispatched by personnel agencies.

Ohata said this kind of deregulation can present a major opportunity that the DPJ can seize on, as employment stabilization should be a priority for the government.

“Labor issues will be a major pillar of the Diet session,” he predicted.

Another controversial issue expected to take center stage this session is nuclear power.

The Abe Cabinet is now striving to help major Japanese firms export nuclear technologies, including to Turkey and Middle Eastern states.

To prepare for such exports, the administration has concluded nuclear cooperation pacts with Turkey and United Arab Emirates and is pushing the Diet to ratify them this session.

The DPJ plans to submit a bill that would scrap the controversial state secrecy law that was enacted amid political turmoil at the end of the last year’s Diet session.

The LDP-New Komeito bloc, which has strong majorities in both Diet chambers, is unlikely to accept the DPJ’s proposal. That doesn’t mean the party won’t try to stir debate and demonstrate to voters the Abe Cabinet’s high-handedness.