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Briefing Report

Future of Prime Minister Abe’s New Administration

Professor, National Graduate Institute for Policy Studies (GRIPS)
Dr. Jun Iio

[Politics] October 23 , 2006

(1) Structure of the Shinzo Abe Cabinet

First of all, regarding the structure of the new administration of Prime Minister Shinzo Abe, I would like to go back to the question of why the Abe administration came about in the first place. Various comments have been made about why Shinzo Abe became prime minister, but the fact is that in general public opinion surveys Abe was very popular. And why was Abe so popular? An extremely important reason was the expectation that he would likely become the next prime minister.

In actual fact, the latest change of prime minister was a very unusual case in recent Japanese political history in the sense that the previous cabinet resigned while its popularity was still high. The administration of Prime Minister Junichiro Koizumi scored a major victory in last year’s general election. The term of Diet members elected in a general election is four years. But despite this fact, Prime Minister Koizumi resigned just one year after the election. It was only natural, therefore, that people wanted to see a continuation of the Koizumi administration, and so Abe, who was the clear favorite to be Koizumi’s successor, became popular. That dynamics was at work, I think.

Nevertheless, the positions of the Abe administration and the Koizumi administration are different. That is to say, Prime Minister Koizumi gained popularity among the public by playing up the conflict within the Liberal Democratic Party, the conflict with the so-called anti-Koizumi resistance forces. However, as a result of its victory in last year’s general election, the LDP itself has been saying that it has become the reformist party, and so people’s attention is shifting to the confrontation between the LDP and the Democratic Party of Japan. In this sense, the issues facing Abe as he seeks to build the foundations of his administration are different from those faced by Koizumi.

Because the Koizumi administration became such a long-running one, it achieved more reforms than expected at the time of its inauguration. The Koizumi reforms were varied. But although he did begin to raise the problems in many cases, actually the reforms that he completed were very few. In particular, the fiscal situation remains very severe, and from now on it will be necessary to carry out bold expenditure reforms and reduce the budget. But this is a very difficult matter indeed. Meanwhile, many people believe that what the Abe administration must tackle most of all is social policy, such as the correction of the income gap in society and the promotion of decentralization. Generally speaking, these are issues that require money, but the overall budget must be reduced as well, so Prime Minister Abe really is in a very difficult position. In this way, various problems that were postponed during the Koizumi administration are going to surface, and the Abe administration can be expected to struggle over its response.

Prime Minister Abe won very comfortably in the LDP presidential election, but what does that mean? It means that, in the end, he was not able to take over the administration by clarifying the focal points in a tight election. In other words, his victory was not because of his own strength but because the opposition within the LDP was weak. In that sense, the Abe administration has a weak point since it does not have any clear mandate. Critics who have been observing Japanese politics for a long time emphasize that Prime Minister Abe does not have much ability. But as far as I can see, Abe himself was toughened during the long presidential election and has improved his skills during the last half year. In that sense, the Abe administration appears to have got off to a steady start, although it is important to note that it has some major challenges.

I would like to make one or two comments regarding Abe’s formation of a cabinet. The Abe cabinet has not attracted much attention. It seems to lack freshness. The reason, I think, is that not many high-profile people have been chosen. Rather than that, Abe appears to have put the emphasis on teamwork in his selection of a cabinet. Indeed, I think that one outstanding characteristic of this government lies in the strengthening of the Kantei [the prime minister’s office]. I think that Abe showed his intentions here when he announced the names of the special advisors to the prime minister before announcing the names of the ministers in his cabinet.

The issue that Abe is raising is that although under the Koizumi administration the prime minister posed reform problems, he was not able to control the contents of reforms. Most likely Abe intends to formulate proposals himself in the Kantei regarding policies that he believes to be important and then have the ministers implement them. However, he does not yet know whether this approach will work. All that he has done is to add a new element to the organization inside the Kantei; he has not restructured the organization itself. In order to cover this instability, he has acted boldly on personnel affairs within the bureaucracy. Until now the Kantei has used bureaucrats recommended by ministries and agencies, but Abe began to make choices himself and to enable individual bureaucrats to apply for posts. This is extremely new indeed. Moreover, Abe has begun to move people who have been involved in systems and administrative procedures in the Kantei for a long time and are familiar with them to other offices, so I think that the management of the Kantei is going to change quite a lot.

At such a time, the weak point of the cabinet seems to be that there are very few people within the cabinet who are good at management. The notable point that makes up for this shortage is the relationship between the LDP and the Kantei. Attracting attention here are the moves of Hidenao Nakagawa, who played a central role in the campaign to install Abe as prime minister. Because of various problems, Nakagawa actually does not want to become a minister himself. Prime Minister Abe no doubt told Nakagawa that he wanted him to join the cabinet, but Nakagawa refused. Therefore, Abe appointed him to the position of secretary general of the LDP, the most important post. And looking at recent conditions, it is evident that Secretary General Nakagawa is indeed engaging in coordination on various policy issues. Another interesting thing is that Abe appointed another Nakagawa---Shoichi Nakagawa—to the position of chairman of the LDP’s Policy Research Council. This Nakagawa is a personal friend of Abe’s. It can be assumed that by appointing two extremely close people to these posts, Abe was trying to bring the LDP organization and the Kantei closer together.

(2) Diplomatic Issues

Next I would like to make a few points regarding policy issues. First of all, let me speak about diplomatic issues. As you know, relations between Japan and China and Japan and South Korea were very chilly during the Koizumi administration, but they seem to have taken a turn for the better since the start of the Abe administration. The reason is that there were merits in the improvement of bilateral relations for both Japan and China. However, in the case of both Japan-China relations and Japan–South Korea relations, the causes of the worsened ties have not been eliminated. For example, if the Yasukuni Shrine problem surfaces again, it is easy to forecast that finding a solution is going to be difficult. In that sense, the basic structure remains unchanged. Relations with East Asia will probably involve opening diplomatic ties, starting negotiations, and making adjustments. In good times this is fine, but one cannot help but wonder whether the leaders of the countries concerned, and especially Japan, can control the situation in bad times when, for example, nationalism raises its head. Right-wing elements in Japan have begun to express dissatisfaction at Prime Minister Abe, saying that he has changed his position, and how to persuade them is going to be an important point for the future of the Abe administration.

This issue is being complicated by the problem of North Korea, which is the next point to note. Within political circles in Japan, and within the LDP in particular, North Korea’s nuclear problem is being evaluated as a plus for the Abe administration. It is proof that Prime Minister Abe’s constant advocacy of a tough attitude toward North Korea was correct. In addition, at least at the present point in time, the adoption of a tough attitude toward North Korea has international support. So in that sense it is a plus for the Abe administration. As you are aware, though, it is very difficult for Japan to exert any influence on the behavior of North Korea. Nevertheless, within Japan there are strong calls for the Abe administration to solve the North Korean problem. In the medium term, there is a possibility that the Abe administration will find itself in the difficult situation of being expected by the people to tackle the problem but not being able to meet those expectations. In this regard, the problems of how to deal skillfully with diplomatic issues and where to place the borderline between them and military issues have not been considered very much in Japan, but from now on a difficult situation can be expected in which the Japanese will be forced to think about them.

My next point concerns Japan-US relations. Most Japanese politicians think that Japan-US relations are easy. The reason is that it is well known that Japan-US relations were stable under the Koizumi administration. However, I believe that the conditions are changing. First of all, the administration of President George W. Bush is entering its final stages, and there is a possibility that it will lose the leeway to make compromises with Japan. Furthermore, for the last few years Japan-US relations have depended too much on the personal relationship between Prime Minister Koizumi and President Bush, so we can expected a backlash to this.

Next, as issues for the Abe administration, a little more thought must be given to problems that were included in his election pledge. What is notable here is his proposal to go beyond relations with China and the United States and establish multilateral ties with other countries. For example, recently it has been argued to some extent within the administration that Japan should strengthen relations with the Association of Southeast Asian Nations or with India. Or Prime Minister Abe himself has suggested that Japan should develop relations with British Commonwealth countries. In this way, issues are being proposed that have not been discussed very much in Japan until now. In this sense, I think it is necessary to consider the possibility of some kind of new initiative being taken.

(3) Priority Issues for the Abe Administration in Domestic Affairs

Next I would like to talk about domestic affairs. It is said that at first Prime Minister Abe was very interested in the issue of constitutional revision. I believe that Abe’s eagerness to change the Constitution is very strong. I think this is manifested in the fact that since the inauguration of his administration he has not spoken very much about constitutional revision. This might be a little difficult to understand, but the point is that the LDP cannot revise the Constitution on its own. It must definitely get the cooperation of the DPJ and the New Komeito. However, if constitutional revision were to become a factional issue within the LDP, it would become difficult to gain the cooperation of the DPJ and the New Komeito. So, speaking in a press conference, Abe said that he would study the matter carefully over the next five years or so. This actually shows that moves are advancing in order to gain the understanding of the DPJ and the New Komeito. For example, regarding the national referendum legislation necessary for constitutional revision, progress is already being made within the LDP to advance the agenda by listening to the opinions of the DPJ and the New Komeito as much as possible.

The next issue is educational reform. Educational reform is a popular policy in Japan as well, and the Abe administration has continued making various statements vigorously. In Japan, however, educational reform has two completely different aspects. The first concerns the spiritual or ideological argument for educational reform. The other is educational reform as a specific means of systemic improvement. The proposed revision of the Fundamental Law of Education, which the LDP submitted to the previous session of the Diet and is the subject of continued deliberations in the current session, represents the ideological side. Abe, who is thought to be very interested in the ideological reform of education, has surprisingly stopped making comments about this matter. The reason, I believe, is that Abe thinks that from now on the focus, at least for the time being, will be on systemic reform. This educational reform has not been realized until now because the Ministry of Education, Culture, Sports, Science, and Technology, which is in charge of the matter, has sabotaged it. Abe is very wary about this situation, and he has set up the Education Rebuilding Council in the Kantei. The important point here will be how Abe will manage to forge good relations between this council and the ministry, which administers specific policies.

The next issue concerns economic policy and fiscal affairs. Regarding this matter, Prime Minister Abe actually has made a clear choice. In his appointment of cabinet ministers and other officials in charge, he has chosen only people who share a common philosophy. That is, they are people who expect high growth and, by realizing it, want to delay tax increases as much as possible and make up for shortages through expenditure cuts. I do not know whether this way of thinking is correct or not, but actually this fall it will become clear to an extent how much they have been able to implement specific cuts. If they have not been successful, it will be very serious, because it will mean that the government has an unsound theory as its economic policy. The notable point here will be whether the Abe administration will be able to utilize the Council on Economic and Fiscal Policy. Under the Koizumi administration, Prime Minister Koizumi emphasized this council and set great store by its policy decisions. For this reason, the council came to have tremendous power. However, this was only possible because various desirable conditions overlapped, and it does not follow that the Abe administration will be able to follow suit. The minister in charge [State Minister Hiroko Ota] is a colleague of mine, but she lacks political power because she comes from a university. Who is going to make up for that slack? Will it be the chief cabinet secretary? Or the prime minister? This will be an important point to watch.

The next issue is decentralization. Prime Minister Abe does not seem to be very enthusiastic about this problem. For example, I suspect that he is emphasizing the doshu [regional bloc] system because this is an issue that will take time. He is trying to buy time by stressing a symbolic issue without touching very much on specific matters. The reason for this is that a very difficult situation is emerging as a result of local public finance reforms. At present the gap between the financial strength of local governments is widening very much. In the past the central government provided generous protection, but now this system is shrinking. From around spring of next year it is expected that a lot of local governments will go bankrupt. There might even be a few bankruptcies this year, too. How to advance decentralization reforms in a situation in which local governments have no money is going to be a very difficult issue. Success will be difficult whoever does it. There is a strong possibility that any administration will be hit by a lot of criticism in this field.

Besides these major systemic issues, various social policies are also going to become a focal point from now on. Educational reform, which I discussed just now, is one of these issues. If these reforms lack substance, they are not going to have any effect. However, looking at such policies as the “second challenge support measures” that Prime Minister Abe stressed during the LDP presidential election, we can see that they have many problems. Various policies are being advocated, but very few of them seem to have any practical effect. The prime minister himself is saying that this was a blunder. What this means is that the bureaucracy in Japan’s central government is losing the ability to formulate effective policies. This is a critical situation. I think it also reflects the fact that as decentralization has progressed, information has ceased to gather in the central government. This is a very serious problem, because at the moment at any rate, the LDP’s policy system is not covering the shortage and has no mechanism for research.

(4) Prospects for Competition Among the Parties and Next Year’s House of Councillors Election

Finally I would like to turn to the issue of competition among the parties. Yesterday [October 22] by-elections were held in Kanagawa and Osaka Prefectures. It was said beforehand that the LDP had the upper hand in these polls, and, as expected, the LDP captured both seats. As a result, the Abe administration has avoided a crisis for the time being and has been able to prove that it has the support of the people to an extent. However, the by-election results actually show that neither the LDP nor the DPJ has adequate strength. In the 2005 general election the LDP won the support of many people, including nonaffiliated voters, but it did not repeat this in yesterday’s polls. The reason was that, as before, the DPJ has popularity among these nonaffiliated voters. So why didn’t the DPJ win? There are two reasons. First, the DPJ carried out an extremely scrupulous election campaign, but it was not successful in increasing the number of DPJ supporters, and the number of voters who formed the DPJ’s original base was small compared with the LDP. Second, the DPJ was popular among nonaffiliated voters, but it was unable to get those voters to the polling stations. The fact that many people supported the DPJ but abstained from voting shows that the DPJ failed to convey to them the party’s general image and the importance of the elections.

Regarding the results of next year’s House of Councillors election, which many people will be watching closely, several indications can be obtained from the by-election results. Observers think it is certain that the LDP will lose some seats in next year’s upper house poll. The reason is that the LDP is not as strong as it was at the time of the 2001 upper house election and the 2005 general election. Therefore, the LDP almost certainly will lose some of the seats that it won in 2001 and that will be up for election again next year. At the same time, however, it is extremely uncertain how far the DPJ will be able to make gains. Generally speaking, the DPJ has not been able to build up support among the public, so it will be very difficult for the party to score any landslide victory, for example, winning in all of the single-seat constituencies. DPJ President Ichiro Ozawa has been making efforts to weaken the LDP’s base, and he has been successful to an extent. But when the LDP pulls together and fights hard in an election, as in yesterday’s by-elections, this is not a very effective tactic. Thus, if the situation does not change in next year’s House of Councillors election, even if the LDP loses some seats, there is little possibility of it being overtaken by the DPJ and losing the reins of government. However, although losing its majority in the House of Councillors would certainly not be a very good thing for the LDP, it would not mean that it would lose the ability to control the government. Even if a bill were rejected in the House of Councillors, the LDP, together with the New Komeito, has a majority of more than two-thirds in the lower house, so it could still become law after being passed a second time in the lower house [Article 59 of the Constitution].

Another possible scenario is that Prime Minister Abe will call an early general election. For example, there is a possibility that elections for the House of Councillors and the House of Representatives might be held simultaneously next year. The LDP scored a landslide victory in the 2005 general election, so it will be difficult for it to increase its seats any further. Everyone expects that it would most probably not hold an election in which it was likely to lose seats. From Prime Minister Abe’s standpoint, however, there are two merits in having an early election. First, by hinting at the possibility of a general election, he would be able to tighten his grip within the LDP. Earlier on I explained that he had been unable to gain a clear mandate in the LDP presidential election. If he could make an appeal in a general election and win, even if the LDP were to lose some seats, his administration would have been approved by the voters, so he would be able to settle this problem. Second, by holding simultaneous elections for the House of Councillors and the House of Representatives, the LDP would be able to use the strength of its lower house members for the sake of its upper house members, and if things went well, there is quite a possibility that the LDP would be able to maintain majorities in both the House of Councillors and the House of Representatives. Although at present the LDP is much stronger than the DPJ, there is no guarantee that this situation will continue in the future. Therefore, it is necessary to be aware that the possibility of an early general election does exist.
The most desirable scenario for Prime Minister Abe, of course, is as follows. That is, he reiterates again and again that the House of Councillors election is going to be tough and that the LDP will suffer a defeat. And to avoid this possibility, he says, he is thinking of dissolving the House of Representatives. If, by doing so, he could throw the DPJ into disarray and increase the unity within the LDP, then that would be a very good outcome indeed. That would be the best scenario for Abe: holding a House of Councillors election in these circumstances without dissolving the House of Representatives and winning the upper house poll. I think the management policy of the Abe administration during its first year will be to earn policy points through such political bargaining and little by little to consolidate the administration.

QUESTIONS AND ANSWERS

Q: Before Abe came to power, there was a lot of talk suggesting that it might be a very short-lived prime ministership. What do you think about that as a proposition? And has anything happened in the first few weeks of Abe’s prime ministership, including his diplomatic initiatives and yesterday’s elections, that would lead you or others to perhaps change that opinion?
A: I don’t think the situation has changed at all. It is only the possibility of the administration being short-lived that is being pointed out. If some confusing situation had emerged just as the administration was being formed, then that would definitely have happened. My intention in my talk today was to speak about the reasons why the administration might be short-lived in the first part and to explain the things that Prime Minister Abe could do to avoid it being short-lived and to prolong his administration in the latter part.

Q: You didn’t say anything about the effect of the North Korean nuclear test on yesterday’s elections or the possible effect on next July’s election for the upper house. Does that mean you don’t see any effect? And could we have your opinion about how far the calls for Japan going nuclear will go?
A: Regarding this problem, I think that the Japanese people have a strangely low level of interest. Exit polls in yesterday’s by-elections showed that only LDP supporters took this problem into account when voting. Since LDP supporters would vote for the LDP anyway, this problem did not influence the results of the elections very much. Of course, I realize that the level of interest could change depending on developments in the situation.
Regarding Japan’s nuclear armament, there is a possibility of a debate taking place, but I think that it will be a debate among a limited number of people; it will not spread to the general public. Also, in many cases the people who are saying that there should be a debate about Japan’s going nuclear have the opinion that Japan should not possess nuclear weapons, so I don’t think there will be much of a debate.

Q: I have two questions. First, what do you think of the position of the Education Rebuilding Council within the organization of the current Abe cabinet? And second, will be economic reforms of Prime Minister Abe follow the Koizumi line? Will one or two success stories emerge in the near future?
A: Regarding the selection of the members of the Education Rebuilding Council, everyone was surprised that many people were chosen who have different opinions from Abe. However, this is a manifestation of Abe’s desire to tackle the systemic aspect of educational reform rather than the ideological aspect. As to what will become of the council, I think the point lies in what the composition of the secretariat will be and what controls it will have. At present a tough battle is no doubt taking place between the Abe side and the Education Ministry side. We don’t yet know how things will turn out, but we are watching closely to see what the secretariat setup will be and who will have real power.
Regarding economic policy, I think that basically the Abe administration will carry on the course of the Koizumi administration. However, many parts of that administration’s economic policy were actually rather unclear, in that an extremely large part of the Koizumi administration’s economic policy really consisted of administrative reform. Although the Koizumi administration’s policy was to draw out the vitality of the private sector by spreading the idea of small government, the Abe administration has not yet formulated any policies for managing the economy in a positive sense. There is the high target of 4 percent growth, but I think the Abe administration really is going to have a tough time from now on finding the means to realize this goal.

Q: You didn’t talk at all about the New Komeito in your prognosis for the upper house election. Do you think that the New Komeito’s influence under Abe’s government is stronger than under Koizumi’s government? Do you think that the New Komeito will change its policies under the new leadership of Akihiro Ota, who is more fundamentalist Soka Gakkai than his predecessor? How do you see the New Komeito in the next one or two years?
A: The New Komeito was quite strong during the Koizumi administration, and that strength will not change, although it’s hard to see the party become any stronger than this. Regarding the relationship between the New Komeito and the LDP, I wrote critically in one newspaper that the New Komeito is not voicing what it should be saying, and I got a tremendously strong response from people connected with the party. And I think that what I suggested is now happening. I said that the New Komeito should state its demands to the LDP more openly and that there was too much behind-the-scenes bargaining. And now Ota has started taking just this approach. He is putting forward some major demands. But I don’t think he expects all the demands to be met. What is important is that the New Komeito is now making its demands clear. And I feel that this is the intention of the Soka Gakkai as well. The New Komeito thought that Abe did not understand this situation within the party and for the past few weeks has been very worried. But then they realized that Abe does understand the situation, so now I think they are rather relieved.

Q: If I picked up your words correctly, you said something about the need for the Abe administration to rebalance diplomacy and defense. I suppose you aim at regaining credibility in Asia. Is that what you mean? And do you think that in the future course of events, we could see some more support from the LDP, the administration, or the people for a more peaceful solution in North Korea, such as new economic reforms and help from Japan?
A: I think this is a very important question, but it is difficult to give a clear answer. I believe that the Japanese government naturally should have a framework for a peaceful solution in the future, but I am not sure whether the administration, including the prime minister himself, does have a clear one. Many Japanese politicians are still bound by the thinking of the Cold War era. I sense that there are an extremely large number of politicians who have the ability to imagine the containment of an unfriendly opposite number like North Korea but lack the proactive ability to imagine a regime change. Of course, there are many experts who do think in this way, but the understanding of politicians and also of the general public to promote this in a democratic and stable manner is lacking. Although I pointed out that this matter is a problem, unfortunately I am not able to give a clear reply as to what is going to happen.

Q: How do you see the future of Japan-US relations? Will they get stronger under Abe? And following North Korea’s nuclear test, how will this effect Japan’s relations with its Asian neighbors?
A: The reality is that, for example, cooperation between Japan and the United States is necessary in order to resolve the North Korean nuclear problem. Therefore, given this security aspect, there is a certain logic in Japan’s getting closer to the United States. Then the problem emerges of cooperation with China and other Asian countries. However, it is very difficult to get the general public to understand this necessity, and so far Abe has not explained this situation. For example, in his book titled Utsukushii kuni e [Toward a Beautiful Country], Abe emphasizes the strengthening of Japan-US relations. But actually this is a contrary reply to the fact that many people have their doubts. It shows the difficulty of Abe’s position. We must watch closely to see whether Abe will be prepared to accept some degree of unpopularity and promote this kind of international cooperation.

Q: Should we expect that under the Abe administration military expenditures will go up in the face of the new threats or not? And in the face of the North Korean threat, do you think that the Abe administration will move in the direction of upgrading the Self-Defense Forces into a full-fledged army?
A: I think that the Abe administration will go ahead and pass a bill to raise the status of the Defense Agency to the Defense Ministry. But with regard to upgrading the equipment of the Self-Defense Forces and increasing the budget, there is actually a strong possibility of a lack of understanding here. The extremely severe fiscal situation in which expenditure cuts will definitely have to be made across the board has an impact on the defense problem, too. I think that the persons concerned are going to have a tough time working out how to upgrade equipment while reducing the defense budget at the same time.

Q: This is a follow-up question. If the Defense Agency becomes a ministry, won’t procurement become more easy? And won’t it become easier than it is today for foreign companies to make sales?
A: I think that this problem has two difficult aspects. Even if the agency becomes a ministry, the bureaucratic procedures will change, but actually they won’t change that much. That is one point. The other point is that at present defense procurement is embroiled in a corruption scandal. Since the power of procurement-related officials is very weak, it might well be better to think of the change as a restraining factor. Therefore, as a general argument, it might be possible to think in that way, but I expect that in the current conditions it certainly would not be easy. Rather, the expensive part of Japan’s defense spending is personnel expenses, so there will be a trade-off between how far ground troop strength can be maintained and how far equipment can be purchased. That will be the problem that has to be resolved.


(END)

* Given on October 23, 2006, at the Foreign Press Center/Japan. This paper is reserved for internal use; any reproduction or quotation is forbidden without prior permission from the FPCJ. 　
©FPCJ 2006