Japan sees change at the top in 2009

10:50, December 28, 2009      

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This year Japan has seen the Liberal Democratic Party (LDP) kicked from government by the electorate for the first time in more than half a century. The Democratic Party of Japan (DPJ) came to power promising change, and analysts say that the new government has got at least some of the way to delivering on that promise.

On Aug. 30, the DPJ won 308 seats out of 480 in the lower house, with the LDP winning just 119. Many analysts saw this win as the electorate "punishing" the LDP for its performance over the last few years. The DPJ campaign was also unified, with all candidates driving home the message of "seiken koutai" (political change) that was outlined in the party's manifesto.

Since coming to power, however, the DPJ has faced a series of challenges that have seen its popularity slip in the polls, and it may find that Japan does not have the money to fund some of the promises it made in its manifesto.

  PROMISES MADE

"I don't think the DPJ will be able to keep some of its campaign promises, and this is going to have an effect on the way the party is viewed by the public," said Koichi Nakano, a professor at Sophia University in Tokyo.

Despite this, there have been some changes to the way politics is played in Japan. An organization called the Government Revitalization Unit was formed to publicly assess the value of public programs and decide on whether or not they should continue to get funding, a big step in a nation that is used to closed-door politics.

It does, however, come with risks. "Hatoyama will need to be careful not to alienate himself from the very institutions that here lies on to run the country," says analyst Sarah McDowall of IHS Global Insights.

Other policies also show there are changes in the way things are done in Japan's parliament. "They are shifting money from construction projects and roads to nowhere into social programs that benefit families and individuals: Single-parent households are having their subsidies reinstated, children will be able to go to high school free of tuition," points out Jeff Kingston, a professor at Temple University.

  ECONOMIC WOES

There is no doubt, however, that in these troubled economic times, there are some policies that the DPJ will not be able to put in place. It was announced on Dec. 21 that while the party would keep its promise to scrap a tax on petroleum that was used to fund the building of roads, the government would create a new levy to make up the money.

"A lot of things depend on factors out of the DPJ's control, such as the condition of the world economy. If the global economy recovers then Japanese exports will recover, but we may be heading for a double dip recession," says Kingston. "These are things that the DPJ can't control."

Despite this, it has done its best to resuscitate the economy. In late November, fears began to surface that the nation would be heading for a double-dip recession. In response, the government announced a 7.2 trillion yen (78 billion dollar) stimulus package, and pressuring the Bank of Japan to pump more money into the markets.

There are risks, however, that handling the troubled economy could mean that the DPJ cannot afford to put in place a budget that contains many of its campaign pledges. "It remains to be seen whether Hatoyama will be able to carry out efficient budget formulation given the size of budget requests and falling tax revenues," says analyst McDowall. "The growing possibility of more government bonds to cover a possible shortfall in revenue could cloud Japan's future prospects for economic growth."

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