New boss to steer Keidanren back to politics?

Party donations rumored to be eyed once again

by Atsushi Kodera

Staff Writer

Sadayuki Sakakibara, the incoming chairman of Keidanren, says his priority in leading the nation’s top business lobby is to help get Japan back on a growth track, but observers say he may also try to re-establish the organization’s influence in politics.

In his first press conference on Jan. 27, the first since he was nominated, Sakakibara, also chairman of major textile and fiber maker Toray Industries Inc., said the immediate task in his new role is “achieving a virtuous cycle of the economy, leveraging that and making sure the economy gets out of deflation, and in turn getting Japan onto a firm recovery track.”

Attending the same news conference, Hiromasa Yonekura, the current Keidanren chairman who handpicked Sakakibara, highlighted his successor’s experience of bringing his company out of a slump by focusing on innovative products such as carbon fibers, and expressed high hopes for the “innovation-focused” leadership skills he will bring to his new position.

While neither of them touched on it, one question attracting strong media attention is whether Sakakibara will re-involve Keidanren in its member companies’ campaign contribution decisions, historically a tool with which the lobby has exerted influence in the political sphere. The lobby comprises about 1,300 major companies, 121 industry associations and 47 local economic organizations.

Keidanren already started evaluating the policies of the ruling parties in October, though it hasn’t linked this review to political donations. But the resurrection of the evaluation process has invited speculation that the lobby may also resume its involvement in political donations.

The evaluation system’s termination and resurrection reflects the turbulent history of the business lobby’s relationship with political parties and the gradual retreat from its once-aggressive involvement in national politics.

Keidanren introduced the political party evaluation system in 2004 when it was under the leadership of former Toyota Motor Corp. Chairman Hiroshi Okuda, who symbolized Keidanren’s deep involvement in politics.

He played a prominent role in the formulation of Prime Minister Junichiro Koizumi’s fiscal and economic policies as a private-sector member of the powerful Council on Economic and Fiscal Policy.

In its initial version, the evaluation system rated policies of the Liberal Democratic Party and the Democratic Party of Japan, the two biggest parties, in 10 “priority” policy areas on a five-point scale. But rather than obliging its members to donate to one party or the other, Keidanren only encouraged them to use the scale as a reference and allowed them to make their own decisions.

Pundits said the evaluation was inevitably biased toward the LDP as the party in power has the ability to achieve its policy goal. They also said Keidanren tried to influence the party to tailor its policies to the lobby’s priority areas, because the higher its ratings, the more likely Keidanren members would cough up additional donations.

But after the DPJ took power in September 2009, the evaluation system was suspended as the party called for abolition of donations by businesses and other organizations.

This forced Keidanren to explore new ways to deal with the left-leaning party, which “more or less gave (Keidanren) the cold shoulder,” according to Nobuteru Kikuchi, an associate professor at Tsuru University who has watched the business community centered around Keidanren.

The frequent changes of leadership in the DPJ may have made it even more difficult for Keidanren to exert any influence, Kikuchi said.

It was after the LDP returned to power under Prime Minister Shinzo Abe in December 2012 that Keidanren restarted the evaluation.

The October evaluation described the policies of the LDP and its coalition partner New Komeito as “aggressively driving forward the policies Keidanren is asserting” and deserving of “high praise.” It called for “continued execution of their growth strategies, especially bold deregulation measures.”

It evaluated the coalition’s policies in six areas, including “growth strategies,” “economic partnerships,” “energy” and “government finances,” and described issues to be addressed in each. Unlike the previous evaluation, it did not use a numeric scale but assessed them in text.

Kikuchi sees the group’s current seemingly political dormancy as a period of transition.

“Keidanren is exploring ways to re-establish an amicable relationship with the LDP after its return to power,” he said.

Kikuchi also suspects a remark by Yonekura — that Abe’s eagerness to push for large-scale monetary easing was “reckless” — made before the LDP even returned to power, may have made Keidanren’s relationship with the ruling party awkward.

The situation could change under Keidanren’s new leadership.

Keidanren Vice Chairman and Director General Yoshio Nakamura, who heads administrative functions, said the future depends on the policies that Sakakibara will come up with.

“We restarted our evaluation of political parties last October, but it wasn’t linked to political donations. So the next step will be to decide how we can use it to contribute to politics, and that will depend on what policy Sakakibara will formulate,” Nakamura told The Japan Times.

“His inauguration is in June, but he says he is giving it a lot of thought,” Nakamura said. “I think he will reveal his ideas after the inauguration.”