With the Aso administration’s approval rating continuing to plunge, there appears to be a growing likelihood that the No. 1 opposition party, the Democratic Party of Japan, will defeat the ruling Liberal Democratic Party in the next general election and take the reins of government under the leadership of Ichiro Ozawa.

If such an outcome materializes, how would Japan change? How would the DPJ seek to finance the wide range of economic programs it has pledged to undertake? How would the Ozawa government meet the pressure expected to come from the new U.S. administration of President Barack Obama for Japan to play a more active role in the war in Afghanistan?

On the domestic front, the DPJ’s announced economic policy may be summarized as one of “reckless spending.” It calls for, among other things, making all expressways free of tolls, giving every child ¥26,000 a month until he or she finishes the nine years of compulsory education, and providing compensation for farmers who have to sell their products below cost. It is estimated that these policies would cost an estimated ¥20.5 trillion in fiscal 2012, but it is not yet clear how the DPJ proposes to secure the necessary financial resources.

The program that the DPJ government would be most determined to implement from the start is the monthly allowance to children. Under this program, however, the government would abolish tax deductions for the spouses and dependents. That means the income tax will increase for a family whose children are over the age of 16. The party also pledges to make all public high schools free, but doing so would add an extra burden on a family with students going to private schools or colleges.

The proposed income compensation for farmers helped the DPJ garner agricultural votes in the 2007 Upper House election, but no specifics have been decided as to how much money would be spent and how. If the rules to report the production cost are made lenient, that would leave room for dishonest reporting, and if they were made too rigid, the farmers would be disappointed and could withdraw their support for the DPJ.

Party officials say they are confident that sufficient fiscal resources would be found to finance these and other economic programs. They say that an extra ¥10 trillion can easily be secured by abolishing inappropriate grants to local governments that have been institutionalized under the LDP regime.

The party is not clear, however, as to how to meet the social security expenses such as medical and nursing-care costs, which are bound to inflate as the population grays. The DPJ also counts on the use of the “treasure trove” — huge sums of money that have been accumulated from budgetary surpluses and reserves.

One lawmaker has expressed fear, however, that by the time the DPJ forms its government, the present regime under Prime Minister Taro Aso may have all but exhausted these funds.

The biggest question mark in the DPJ administration’s foreign and security policies would lie in its relationship with the new Obama administration. The party has been active in establishing strong ties with China and South Korea, but has so far been unsuccessful in deepening its relations with Washington.

It is quite conceivable that Washington would ask Tokyo to cooperate further in the war in Afghanistan, because Obama has repeatedly said that although he was determined to withdraw troops from Iraq, he would concentrate the American war against terrorists in Afghanistan.

The DPJ has in the past staunchly opposed the Japanese Maritime Self-Defense Force ships supplying fuels in the Indian Ocean to help U.S. and other naval vessels fight terrorism, on grounds that the MSDF’s refueling operation is not based on a United Nations resolution and, therefore, is unconstitutional.

The dilemma for the DPJ is that reversing its position would inevitably cause a strong distrust among party supporters, whereas an outright suspension of the fuel-supply operation would impact Tokyo’s relations with Washington in a negative manner.

One likely scenario for Ozawa to resolve this dilemma would be to send the Ground Self-Defense Force troops to Afghanistan, in line with a statement he made in 2007 that under his administration, Japan would participate in the International Security Assistance Force (ISAF) now operating in that country, which the DPJ thinks is authorized by a U.N. resolution.

Although such dispatch of ground troops is not contemplated in a legislative bill submitted by the DPJ to fight terrorism, Ozawa could very well send Self-Defense Force members and civilians to relatively safe regions of Afghanistan to engage in such fields as providing medical care, transporting materials and building roads and bridges.

There is no denying that sending ground troops to Afghanistan itself is much riskier than supplying fuels to American and other naval vessels in the Indian Ocean. That is why certain DPJ lawmakers of the younger generations are reluctant to support dispatch of SDF members for reconstruction purposes in Afghanistan, for fear that any casualty among the troops would immediately lead the new administration to lose support from citizens.

Moreover, such dispatch of SDF members would be vehemently opposed by the leftist-leaning Social Democratic Party, the DPJ’s ally in opposing the ruling coalition of the LDP and Komeito. That would spell trouble for the DPJ, which does not have a majority on its own in the Upper House.

The lineup of the DPJ Cabinet under Ozawa is likely to look refreshingly attractive, with a number of ministers chosen from among non-politicians. It will probably score an initial success of providing grants to all children and income compensation for farmers.

With insufficient fiscal resources to finance such programs, however, Ozawa and his colleagues will sooner or later have to move toward increasing the consumption tax rate, which now stands at 5 percent. It has yet to be seen whether the future prime minister would be able to persuade the citizens to swallow that bitter pill.

People expect that the DPJ government would bring about “change.” But a DPJ government will not enjoy smooth sailing because it will face difficult choices on the economic, security and diplomatic fronts.

This is an abridged translation of an article from the January issue of Sentaku, a monthly magazine covering Japanese political, social and economic scenes.

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