When the candidate backed by Osaka Mayor and Nippon Ishin no Kai (Japan Restoration Party) co-leader Toru Hashimoto was defeated in September by Sakai Mayor Osami Takeyama, a staunch Hashimoto foe, it marked what is widely seen as the beginning of the end of the whole Hashimoto-Nippon Ishin movement, the final defeat of not only a man, but the ideas that propelled him to power.

Takeyama’s re-election in the prefecture’s second-largest city may make it politically impossible for Hashimoto to achieve the administrative integration of the city and prefecture of Osaka, his main goal.

The Sakai mayor has long opposed Hashimoto’s plan to change Sakai into an ill-defined special district that would, according to Hashimoto, enjoy more autonomy over local taxes. According to Takeyama, it would destroy Sakai’s identity as a separate political entity that is culturally distinct from Osaka.

In the aftermath of the defeat, Hashimoto and his supporters said he would press on.

“We’ll continue to advance (the integration plan) and let the prefecture’s voters decide,” Hashimoto said after the election.

Osaka Gov. Ichiro Matsui, who also serves as secretary-general of Nippon Ishin, added that the Sakai defeat would not cause the party to revise its timetable.

“We haven’t changed our plan to merge the city and the prefecture by April 2015,” Matsui said.

Brave words, but ones not given much credibility by Hashimoto’s political opponents or by many within the party itself.

For Hashimoto, the election loss in Sakai capped a horrible year for him and his party. A year ago, there was talk that Nippon Ishin, the national version of his local political group, might become part of a ruling coalition after the Lower House election.

Like former Prime Minister Junichiro Koizumi’s son, Shinjiro Koizumi, today, some quarters of the media had touted Hashimoto as a future prime minister.

But the tie-up with then-Tokyo Gov. Shintaro Ishihara and his allies, although resulting in 54 seats in the Lower House election in December, proved to be a Pyrrhic victory. Instead, Hashimoto’s image as an independent populist was destroyed.

Throughout last spring, his party suffered a string of defeats, losing mayoral races in Itami and Takarazuka in neighboring Hyogo Prefecture, and then winning only eight seats in the Upper House election in July.

On the local level, voter disillusionment was especially noticeable after the tie-up with Ishihara. On the national level, politicians shied away from Hashimoto after he asserted in May that Japan’s wartime “comfort women” system had been necessary at the time.

But in Osaka, it was controversy over the integration plan, rather than his inflammatory remarks, that eroded local support.

The basic integration plan states that the city of Osaka, which has about 2.6 million people living in 24 wards, would be reorganized into eight new districts, each with a population of between 300,000 and 500,000. The rest of the prefecture, including Sakai, would be further divided into a dozen districts.

Unlike the current setup, where wards are part of the city of Osaka and headed by appointed bureaucrats, each new district would elect its own leader and assembly. The towns and villages, including Sakai, would see some redistricting but would continue to elect their own officials.

The Osaka governor would preside over an assembly, but the fewer, reorganized quasi-autonomous districts would have more control than they currently do over how tax revenues are spent. They would also have more control over prime bus and train routes, sewage treatment and garbage collection and hospital administration.

The position of Osaka mayor would disappear, and the governor would sit at the top, giving Osaka the same administrative structure and status as Tokyo.

The theory is that, because the now larger but democratically run districts would have better control over tax money, they would have more incentive to invest wisely and adopt economic policies that give firms and individuals good reasons to stay in, or relocate to, business-minded Osaka rather than Tokyo or overseas.

Also, Hashimoto insists integration would help streamline efforts to cut costs, thus reducing individual and corporate taxes.

Politically, he adds, it would create a local system of governance that is more responsive to residential needs because the officials would be elected.

The end result is supposed to be an Osaka that is more competitive with not only Tokyo, but also Seoul and Hong Kong in attracting new businesses. This, in turn, would boost local employment, leading to growth in Osaka’s service industries.

That’s the plan. But the devil is in the details. Over the past year, as Hashimoto has become ever-more distracted by national issues like the Trans-Pacific Partnership trade talks, nuclear power and constitutional revision, or caught up in controversies like Japan’s wartime sex slaves, he has found himself with less time to attend to the details and address local voter concerns.

This lack of response has created a growing sense of uncertainty and skepticism among Osakans about how realistic the merger project is, and how serious Hashimoto and Nippon Ishin are about implementing it.

For example, there is the problem of getting Diet approval for the merger. Osaka residents are suspicious of Tokyo-area politicians by nature and worry that those in the central bureaucracy would see an integrated Osaka as a threat to their power.

They are also worried that the ever-abrasive Hashimoto and Nippon Ishin do not have the necessary behind-the-scenes influence in Tokyo, or the needed tact, to get a bill passed.

Then there is general confusion over how the merger would play out, how much it would cost and who would pay for it.

These questions encompass concerns ranging from whether there will be a huge increase in the local tax burden to set up the new administrative system, to how much money would be needed to pay off the heaps of bureaucrats rendered redundant by it.

Estimates of the costs and benefits vary wildly, depending on who is doing the math. In 2011, Matsui said a merger would reduce administrative costs by ¥400 billion a year. But in August, he announced the maximum financial benefit from the merger would be about ¥98 billion annually, mostly due to reduced personnel costs.

The Liberal Democratic Party’s Osaka chapter, which staunchly opposes the merger, said in September that its figures show personnel costs jumping by nearly ¥170 billion over two decades because more than 2,200 civil servants would have to be added to handle the merger. The Japanese Communist Party predicts the benefits would be only about ¥940 million per annum.

Finally, there is the feeling that Hashimoto and Nippon Ishin are not paying enough attention to concerns — even from those leaning toward the merger — that rearranging Osaka would result in greater income gaps between rich districts with low social welfare costs and lower-income districts that must spend large amounts of revenue on medical care for elderly or poor residents.

Faced with such challenges to his central policy goal by voters in his base, and the rejection delivered by the Sakai poll, the question now is whether Hashimoto, his stature greatly diminished as a national leader, will also become a mere figurehead in local politics who will only be remembered as a footnote in Japan’s social and political developments over the past five years.

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