Japan’s political future hinges on the successor to Junichiro Koizumi, whose tenure as president of the governing Liberal Democratic Party and, hence, prime minister will end in four months. Opinion polls show Chief Cabinet Secretary Shinzo Abe is by far the most popular potential contender for the premiership, but it is uncertain if he will win the LDP presidential election in September.

The question is whether the new leader will continue the policies of Koizumi’s five-year reign or switch to a new course. Main issues in the LDP presidential election will be how to deal with the widening social divide resulting from Koizumi’s reform programs and how to break a deadlock in Asian diplomacy stemming from the bitter feuds with China and South Korea over Koizumi’s controversial visits to Yasukuni Shrine.

The major contenders to the premiership are, besides Abe, Foreign Minister Taro Aso, Finance Minister Sadakazu Tanigaki and former Chief Cabinet Secretary Yasuo Fukuda.

In March, Abe established a Cabinet council for promoting a society with diverse opportunities. Abe, who chairs the council, argues that the growing social divide between winners and losers, resulting from free-market competition, should not become fixed. A report to be compiled by the council will be reflected in the fiscal 2007 government budget, says Abe.

Aso, a former entrepreneur, says he will try to create a society full of vitality despite the growing proportion of senior citizens in the nation’s population.

Both Abe and Aso are trying to fine-tune Koizumi’s reform agenda in light of increasing public criticisms of it.

Tanigaki argues that a legislative package of tax reform, including a higher consumption tax beginning in fiscal 2007, should be submitted to the Diet next year, despite widespread criticism of his position by government officials and LDP lawmakers.

The consumption tax has caused serious trouble for Japanese politicians. In 1979, then Prime Minister Masayoshi Ohira proposed the tax to reduce the government’s dependence on public bonds. As a result, the LDP suffered a devastating setback in a subsequent general election, which touched off a “40-day power struggle” in the party involving Ohira and his rivals, including former Prime Minister Takeo Fukuda, the father of Yasuo Fukuda. The Diet approved a no-confidence motion against the Ohira Cabinet and Ohira called a general election, but he died of a myocardial infarction during the election campaign.

A 3 percent consumption tax was introduced in 1989, 10 years after the tax was first conceived, under a decision made by the Cabinet of Prime Minister Noboru Takeshita. In 1997 the tax was raised to 5 percent, contributing to the nation’s economic slowdown. The administration of Prime Minister Ryutaro Hashimoto suffered a crushing defeat in the 1998 Upper House election, forcing him to resign.

The next Upper House election is in 2007. The opposition Democratic Party of Japan under new chief Ichiro Ozawa is pushing efforts to take the majority away from the LDP-led ruling coalition.

It remains to be seen whether Tanigaki, who inherits Ohira’s political legacy in the conservative mainstream, will win majority support from LDP lawmakers regarding his consumption-tax proposal.

Japan’s diplomacy in Asia has cropped up as a major issue in the LDP presidential election. Japan’s relations with China and South Korea are strained over Koizumi’s Yasukuni visits, which have forced a suspension of summit talks between Japan on one hand and China and South Korea on the other. Separately, top-level disputes have aggravated strains over exclusive economic zones and the exploitation of undersea resources among the countries involved.

The 10-member Association of Southeast Asian Nations has expressed concern that the Japan-China disputes could affect moves toward regional integration in Asia.

Writing about the rivalry between China and Japan in the March/April issue of Foreign Affairs journal, Kent E. Calder, director of the Reischauer Center for East Asian Studies at SAIS, Johns Hopkins University, said “their relationship is increasingly strained, with dangerous implications for the U.S. and the world at large.” It is up to the new Japanese leader to break the diplomatic deadlock.

Abe supports Japanese leaders’ Yasukuni visits, saying the visits do not necessarily mean the glorification of war. Aso is regarded as a hawk in relations with China.

Fukuda, the only non-Cabinet member among the four major contenders, is waging an active campaign to repair Japan’s relations with its Asian neighbors. In late April, he said Japan’s troubled relations with China are abnormal and must be remedied. Fukuda said he will try to create a package of diplomatic policies in Asia by improving on the “Fukuda Doctrine,” conceived by his father in 1977 as basic policy guidelines for Japan’s relations with Southeast Asia.

The doctrine says Japan will not become a military power, will build “heart-to-heart” relations based on trust with Southeast Asian countries, and will support ASEAN as an equal partner.

Yasuo Fukuda resigned as chief Cabinet secretary in 2004, taking responsibility for his past nonpayment of public-pension premiums. The resignation reportedly stemmed from his disagreement with Koizumi on diplomacy toward China and North Korea.

The Japan Association of Corporate Executives, a major business lobby, recently published a statement expressing strong concern over the current state of Japan-China relations, and asked Koizumi to stop visiting Yasukuni.

The post-Koizumi diplomatic challenges center on how to deal with the Japan-U.S. defense alliance amid the realignment of U.S. forces in the world, and with China’s military and economic emergence on the international scene.

From the days of the Roman Empire, Japan had exchanges with mainland China and the Korean Peninsula. Toward the end of the 19th century and in the first half of the 20th century, Japan made grave mistakes by pushing expansionist policies, following the examples of European and U.S. colonial rule in Asia.

Ohira once warned, before becoming prime minister, that Japan needed to do more soul-searching with regard to its history of aggression against China.

Japan may be an economic powerhouse, but that alone will not make it a respectable country. The question for Japan is: What should it do to gain more international respect as a nation with high moral standards? The most important requirement for contenders to the premiership is to demonstrate deep insight based on historical perspectives.

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