The spectre of a political revolution in Japan might occur sooner than you think. Political crises have always been a strong factor driving reform. Most often change occurs because of crises. Things get to a point when something has to give. Maybe it was the national debt – currently in excess of 200% of GDP. Yes, I know, its owed to Japanese people, but it either has to be paid by taxation, immigrants or currency debasement.
In recent times, we have also pointed to the prospect of political change driving political reform. We see evidence that this is already happening.
Osaka Governor Toru Hashimoto has established a new party One Osaka comprising 82 candidates, among them 40 former LDP members, who will contest the local elections next spring 2011. The Japan Times is comparing the development with the “Meiji Restoration's abolition of the feudal clan system and the establishment of the prefectural system”, and rightly so. It conveys a mass realignment of political interests.
The Osaka LDP chapter has taken steps to expel the 40 LDP members from the party in a bid to stem the tide of party defections. The reality is that any sign of popularity for this party is going to result in even more defections. We might ask however – is Hashimoto such an inspiring leader? What can he do if he becomes PM, given that his supporters might comprise the old members of the LDP? Isn’t it just the same? Perhaps the difference will be the amalgamation of all pro-reform members in the parliament. So what will unite them other than rhetoric? Is there any basis for consensus? It’s hard to say. But change can’t hurt. We will have to watch to see whether there are further defections on a national-scale. Already there is talk of a coalition between Hashimoto’s One Osaka Party and Your Party, which holds 10 seats in the Upper House and shares a number of policies. Expanding the coalition prior to next spring's local elections and the 2013 Lower House election is likely envisaged.
Hashimoto established One Osaka to unite support for his fiscal and bureaucratic reform plans to integrate Osaka City with Osaka Prefecture to form a ‘united’ Kansai state. Unfortunately the party’s plans seem to focus upon public works projects in order to facilitate more trade. This policy platform strikes one as more of the same.
The question is whether these former LDP members will form a national government in the future with the LDP, or will they end up forming a coalition with the DPJ? Probably the former with new, hopefully inspiring leadership, but I see no evidence of that. It looks like change for change's sake.
Of course these developments are important because they could give support for Japanese property investments.