As the Lower House election campaign goes into full swing, Japanese voters face an important decision: whether to endorse the reform politics of Liberal Democratic Party leader and Prime Minister Junichiro Koizumi, or a different kind of reform politics pushed by the opposition Democratic Party of Japan. The two parties also hold different views on foreign policy.

The ruling LDP has entered the campaign split by a dispute over postal service privatization bills that were rejected by the Upper House on Aug. 8 after some LDP members withheld their support. The split was made permanent when the LDP leadership decided to field its own candidates — dubbed “assassins” by the media — to run against LDP rebels in their own constituencies. This situation may offer the DPJ a chance to beat the LDP-New Komeito coalition.

Mr. Koizumi is attempting to turn the election into a virtual referendum on the privatization bills, which call for privatizing and dividing Japan Post in April 2007 into four companies — mail, savings, insurance and network operations — and placing them under a holding company. His message boils down to this: Vote for candidates who support the privatization bills.

Calling the bills the “kernel of reform,” Mr. Koizumi says that freeing up the 340 trillion yen in postal savings would help revitalize the economy and facilitate administrative and financial reform. Because his message is simple, it is rhetorically strong. It is not necessarily strong in logic, however, and leaves many questions unanswered. Even so, Mr. Koizumi’s rhetoric may appeal to voters who seek a cure-all measure. In any case, the Sept. 11 election should serve as an opportunity for voters to pass judgment on the achievements of the Koizumi Cabinet since April 2001.

Even if Mr. Koizumi’s camp wins a majority in the post-election Lower House, it remains uncertain whether the Upper House will pass the privatization bills. The DPJ calls for eventually limiting an individual’s postal savings to 5 million, yen thus reducing the total amount of funds held in postal savings, and does not rule out the future privatization of Japan Post.

The overall success of the opposition parties will depend on whether they can breach the wall of Mr. Koizumi’s single-issue approach and get voters to pay attention to their policy proposals on a variety of pressing issues. Financial reconstruction is an important issue that should be addressed by all parties in the election campaign. The country is saddled with 700 trillion yen in debt — 1.6 times its gross domestic product. Financial reconstruction will require a reduction in government expenditures and possible tax increases. The LDP proposes balancing revenue (excluding borrowed money) and expenditures (excluding debt service) in the early years of the next decade, while the DSP proposes reducing expenditures by 10 trillion yen in three years to achieve a balance by fiscal 2013.

Coupled with this is the question of how to reform the nation’s social security framework, including the pension system and medical services. The LDP proposes integrating the pension systems for private-sector workers and public servants, and using tax revenue to pay for half the basic portion of pensions. The DPJ calls for integrating all three pension systems — for private-sector workers, public servants and self-employed people — and increasing the consumption tax to fund a new basic pension of 70,000 yen a month.

With the nation’s population rapidly graying and poised to decline in size, voters need to hear concrete and convincing social-security policy measures from all the parties.

The parties also should discuss how to streamline the bureaucracy, focusing on reducing both personnel expenses and the number of public servants, and how to improve relations with neighboring countries, especially China and South Korea.

On the foreign policy front, the DPJ is critical of the unilateralist policies of the Bush administration, saying Japan should not blindly follow Washington’s lead in foreign and security policies. It also calls for the withdrawal of Japan’s Self-Defense Forces unit from Iraq by December.

The DPJ should clarify just how far it wants to depart from the nation’s traditional policy of placing priority on its security alliance with the United States.

There is another important issue in the coming election that has not been discussed: whether the Constitution should be amended, especially the pacifist principles embodied in Article 9. The LDP is clearly in favor of revising Article 9. The DPJ is fuzzy. New Komeito, the Japanese Communist Party and the Social Democratic Party are against it. Clearly, the outcome of the coming election will have a far-reaching effect on Japan’s future course.

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