The decisive moment for the administration of Prime Minister Junichiro Koizumi is approaching, and it is one that the Liberal Democratic Party’s elders fear may shatter its decades-long grip on power.

With the Aug. 13 close of the extended Diet session drawing near, LDP leaders are trying to put the contentious government-sponsored postal privatization bills to a House of Councilors vote on Aug. 5.

But the LDP’s in-house battle over Koizumi’s pet project has developed into more than just a battle to reform the state-run postal services. It is a struggle to cripple — if not oust — Koizumi’s Cabinet, which has defied immense pressure from LDP lawmakers since his inauguration in April 2001 to pursue budgetary austerity and reform of inefficient government-linked corporations.

“Frustration has been building up for four years and three months. (The rebellion of LDP lawmakers against the postal bills) is not simply opposition to postal privatization,” Toranosuke Katayama, secretary general of the LDP’s Upper House caucus, told the Japan National Press Club on Tuesday.

“(Opponents) of course have an eye on the post-Koizumi period,” he said, referring the end of Koizumi’s second term as LDP president next year.

Despite the comfortable majority held by the LDP and coalition partner New Komeito, the postal bills cleared the more powerful House of Representatives earlier this month by a razor-thin margin of five votes. Fifty-one members of Koizumi’s party either voted against or abstained from voting on the bills.

Postal privatization is a politically sensitive issue because the network has traditionally been a strong source of votes for many LDP lawmakers.

Opponents of the bills have vowed to scrap them in the House of Councilors. Koizumi, on the other hand, has said he will interpret a rejection by the Upper House as a vote of no confidence in his administration — a remark widely taken as a threat to dissolve the Lower House for a snap election.

Party elders warn that if this happens, the LDP, which has controlled the government since 1955 except for a brief gap between 1993 and 1994, could again slip from power and be unable to stage a comeback this time.

These warnings sound realistic, given the LDP’s waning power in recent elections and the rise of the Democratic Party of Japan, which has developed into the nation’s main opposition force and one capable of squarely competing with the LDP.

In addition, a general election after a Lower House dissolution would in a sense be a contest between pro-Koizumi and anti-Koizumi forces in the LDP — a scenario its executives warn can only benefit the DPJ. Party leaders have said lawmakers who failed to support the bills will not be endorsed as LDP candidates in the election.

“The political situation would be extremely fluid. The LDP of the old days would’ve been able to make a comeback even in such a situation,” Katayama said. “But this time I don’t think we can.”

Media polls seem to back Katayama’s concerns. According to a July 16-17 poll conducted by the Mainichi Shimbun, a vernacular daily, 35 percent of the 1,077 respondents said they wanted the DPJ to win more seats in the next House of Representatives election, compared with 25 percent who said they wanted the LDP to win more.

When the postal bills squeaked through the Lower House earlier this month, Koizumi admitted the rebellion in his party was larger than he had anticipated. Now they have to go through the Upper House, where the situation is tougher. The ruling coalition’s advantage in the upper chamber is narrower, and the bills can be rejected if 18 or more LDP defectors vote with the opposition.

LDP executives, including Katayama, call the bills’ chances 50-50 at best.

“Frankly speaking, I think (the bills) would be voted down if they were put to a vote right now,” LDP Deputy Secretary General Shinzo Abe reportedly told a group of businesspeople in Tokyo on Tuesday.

Koizumi himself said last week that he believes around 10 LDP members in the chamber have already decided to vote against the bills, and that another 20 could join them.

Postal privatization has thus turned into a game of chicken between Koizumi and his party mandarins. But some members warn that if Koizumi loses and calls a snap election, the real loser will be the LDP.

The party leadership is hoping the anti-Koizumi factions blink first.

“Everybody knows the result will be political chaos if the bills are voted down,” said Lower House member Taku Yamasaki, a longtime Koizumi ally, on a TV show Sunday. “(The postal confrontation) will end in predetermined harmony” as the two sides decide to cooperate on the bills at the last moment, he predicted.

But even if Koizumi succeeds in getting the postal bills by the Diet, his clout in the LDP is likely to fade anyway, as attention in Nagata-cho turns to possible successors when his term as LDP president ends in September 2006.

Many of his rivals are already increasing their media exposure in the apparent belief he will effectively be a lame-duck leader for the next 13 months after the postal battle ends.

Among them are former trade minister Takeo Hiranuma, who has floated the idea of forming a new party if Koizumi dissolves the Lower House.

Another is Finance Minister Sadakazu Tanigaki, who said at a recent business seminar that he would compile comprehensive economic polices if he joined a new LDP presidential race.

There’s also Seiko Noda, who has pledged to make a run to become Japan’s first female prime minister. Noda is one of the most vocal opponents of postal reform, and both she and Hiranuma were among those who risked their LDP careers by voting against the bills in the Lower House.

“I don’t think you should bring up post-Koizumi issues in this process (of the postal reform),” Katayama said. “But maybe they believe that otherwise they can’t put any punch” in their images as contenders for future LDP president, he said.

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