A loss by the ruling Liberal Democratic Party (LDP) in the July
29 House of Councilor (upper house) election could cause Prime
Minister Shinzo Abe to resign after only nine months in office. An
outraged electorate is holding Abe and the LDP responsible after
revelations that the government lost millions of pension records,
throwing the previously assured LDP election victory into turmoil.
Although Abe will most likely remain in office, it is less certain
that the LDP can retain an upper house majority. Abe cannot be
forced from office even if the ruling coalition loses the upper
house, since prime ministers under the current constitution have
been selected from the LDP-dominated House of Representatives,
which is not up for election until 2009. But the possibility that
Abe feels obligated to resign is far greater than when the pension
scandal broke a month ago.
The run-up to the election will remain volatile since polls show
falling support for Abe and the LDP and nearly half of the
electorate is not aligned with a party. An LDP loss of control of
the upper house or an Abe resignation would constrain the ruling
coalition's ability to enact legislation and would hinder U.S.
efforts to have Japan assume a larger Asian and global security
The Election as Referendum on Abe
The election is seen as a judgment on Abe's leadership. His
approval rating has plummeted from a high of 70 percent when he
assumed office in September 2006 to 32 percent today. Abe began
losing public support last year when he allowed legislators to
return to the LDP after being dismissed by Koizumi for their
opposition to economic reforms. The move was interpreted as a
rejection of Koizumi's reform policies and a return to party
cronyism. The electorate also perceives Abe's emphasis on
constitutional revision as ignoring their demands that he focus on
the economy and on pension and health care reforms.
The upper house of the bicameral parliament consists of 242
councilors serving six-year terms, with half of the house elected
every three years. To retain a majority of 122 seats, the LDP and
its coalition partner, the New Komeito Party, must win 64 seats to
augment the 58 uncontested seats retained from the 2004 election.
Since the Komeito is expected to win 13 seats, the LDP must win 51
seats. The LDP will lose positions from its landslide victory of 65
seats six years ago during the height of then Prime Minister
Junichiro Koizumi's popularity. The critical issues for this
election will then be whether the LDP can retain the upper house
majority or what magnitude of defeat would trigger an Abe
Pension Scandal Alters Political
Abe's troubles were compounded by opposition party revelations
in May that, during the past decade, the Social Insurance Agency
(SIA) of the Ministry of Health lost 50 million pension records,
failed to input an additional 14 million into the computer system,
and underpaid pension benefits. The pension scandal caused the
public to feel a deep sense of betrayal by the LDP-led government;
63 percent of respondents to a June 24 Kyodo News survey identified
the issue as the most critical election issue. Other issues
included in the survey were education reform (23 percent),
constitutional revision (18 percent), redressing economic disparity
(18 percent), and political scandals (16 percent).
The prime minister further alienated the public by initially
appearing to downplay the seriousness of the issue, defending the
bureaucracy rather than championing the pensioners' cause as
Koizumi would have done. Only after the public furor did Abe pledge
to redress the pension crisis within a year and abolish the
five-year statute of limitations for claiming unpaid pensions.
Abe has also been hurt by a series of cabinet minister scandals
which underscored long-standing perceptions of LDP corruption. In
December 2006, Genichiro Sata resigned as state minister in charge
of administrative reform over a political fundraising scandal.
Minister of Agriculture Toshikatsu Matsuoka committed suicide on
May 28 over his alleged role in rigging government bids. Minister
of Defense Fumio Kyuma resigned on July 3 after causing public
outrage for comments that appeared to condone the U.S. atomic
bombings of Hiroshima and Nagasaki.
Plummeting Support for LDP
According to a July 1 Asahi Shimbun poll, public approval
for Abe's cabinet has fallen to 28 percent, the lowest level since
he assumed office in September 2006, while its disapproval rating
has risen to 48 percent. The poll reflected an additional drop of 3
percentage points from a survey conducted on June 24. When asked
how they would vote in the proportional representation component of
the upper house election, 25 percent of respondents named the
opposition Democratic Party of Japan (DPJ), an increase of 2
percentage points from the previous week; 19 percent would vote for
the LDP, a drop of 5 points. The LDP fared better in the individual
candidate component, beating the DPJ 26 percent to 25 percent. These
numbers are dramatically worse than the LDP faced before its poor
performance in the 2004 elections.
Election Dynamics in Flux
The election is very much in play since Japan's proportional
upper house elections are seen as easily swayed by last-minute
events and since 45 percent of the voters--the "floating
electorate"--is unaffiliated with a party. A critical determinant
will be the public's perception of Abe's leadership and initiative
in the run-up to the election. Abe has often shown a tin ear for
politics, however, and there are doubts concerning his ability to
turn around public sentiment.
In a desperate attempt to counter voter anger, the LDP postponed
the election until July 29 to provide more time to implement
legislation to remediate the pension disaster and to spend on other
issues meant to distract the populace. The LDP pushed pension
legislation to provide a near-term partial solution, pledging to
fix 80 percent of the missing pensions within a year, rising to 100
percent over time. The opposition DPJ advocated a slower, more
complete solution, but a majority of the public preferred the LDP
proposal. The LDP pushed through legislation to disband and
privatize the SIA. It also passed separate civil service reform to
address the endemic corruption caused by retiring bureaucrats
gaining senior executive positions in the industries they oversaw,
a practice known as amakudari ("descent from heaven").
The strongest mitigating factor against an LDP defeat will be
the opposition DPJ's inability to capitalize on the ruling
coalition's troubles. The electorate still does not see the DPJ as
a viable alternative to the ruling coalition nor can it match the
LDP's fund-raising ability. Although only 24 percent of the public
approved of the LDP response to the pension issue, as compared with
59 percent disapproval, the DPJ did not fare much better--27
percent approval and 45 percent disapproval.
The second factor is that the LDP will retain a two-thirds
majority in the more powerful lower house. Although then Prime
Minister Ryutaro Hashimoto resigned in 1998 after the LDP lost its
majority in the upper house, his party only had a 55 percent
majority in the lower house. With a two-thirds majority, the LDP
retains the ability to enact budget bills and certain other
legislation even if the opposition controls the upper house. That
said, the opposition could impose substantial political and
parliamentary constraints on Abe's agenda.
Abe Likely to Remain in Office
Despite widespread media speculation of an Abe resignation, he
will likely continue as prime minister, but it is becoming
increasingly doubtful that he will be able to maintain a majority
in the upper house. To do so, the LDP must either win 51 seats or
cobble together a sufficiently large post-election coalition with
minority opposition parties. If the ruling coalition loses the
majority by a narrow margin, Abe will remain but will be
politically weakened. It is unclear what magnitude of LDP loss
would trigger an Abe departure, but it could occur within a
relatively narrow range. There is speculation, including by senior
LDP legislators, that any LDP result below 45 seats would lead the
prime minister to leave, while others believe the margin allows for
losses down to 41 LDP seats.
Strategic Concerns for the U.S.
Neither Japan's policies nor its relationship with the United
States will change significantly as a result of the upper house
election. However, a lame duck prime minister would have greater
difficulty achieving his policy agenda, including foreign policy
goals consistent with U.S. objectives. Abe would instead feel
compelled to reprioritize policies to focus on domestic issues such
as pension, health care, and civil service reform.
Abe has made revising Japan's constitution, particularly the
Article 9 pacifist clause, a principal tenet of his administration.
The Ministry of Defense is reviewing potential options for
transforming the self-defense forces to implement Abe's quest for
Japan to assume a greater Asian and international security role.
Constitutional revision cannot occur until 2010, but
reinterpretation of the constitution allowing for a more assertive
stance on collective self-defense could take place far earlier.
An Abe-commissioned special committee is expected to issue a
report this autumn which advocates a greater role in defending U.S.
forces against missile or naval attacks as well as allowing for a
greater Japanese role in overseas peacekeeping and peace
enforcement missions. This, in turn, could lead to a major policy
realignment announcement by Abe, potentially as early as November.
The U.S. has long advocated for Japan to assume greater security
responsibilities to counter the North Korean and Chinese military
threats to the region. Washington has also called upon Tokyo to
expand its overseas participation in peacekeeping operations in the
Middle East. These plans would likely be delayed or abandoned if
Abe were weakened by an upper house loss or replaced by a
A cabinet reshuffle is likely in any election scenario with
greater LDP losses triggering a larger minister turnover. However,
the Japanese markets are unlikely to react strongly, since the
country's economy remains sound and there will be no change in the
ruling party. The markets may make adjustments prior to the
election as the final trend becomes apparent.
Bruce Klingner is Senior
Research Fellow for Northeast Asia in the Asian Studies Center at
The Heritage Foundation.