Koizumi's stumbling blocks for 2004

Tomohiko Taniguchi (Editor at Large, Nikkei Business Publications)

In July there will be an election for the upper house. The question is whether it will be made to coincide with the election for the lower house. "Unlikely", said the one time Prime Minister hopeful Koichi Kato in December last year, "for there is absolutely no chance for the Liberal Democrats to win the general election this time around". How can he be so sure?

The current administration with the Komeito the sole coalition partner has greatly increased its dependence on the religious party. One of the tactics the Komeito willingly calls for to back its favoured candidates is a unique one. As a faith-based organisation, the Komeito consists of a vast number of members that are faithful followers of Soka-Gakkai, a quasi-Buddhist temple. Come election time, the Gakkai often requests that some of its members move their registered addresses to those districts where the candidates are weak. With votes added in this way the otherwise weak candidates could carry the district to win the elections. These literally "swing" votes are increasingly crucial not only for the religious party candidates but also for the LDP.

There must be a certain period of time, however, before one can go to a voting booth after having geographically moved. Hence, to have elections for both houses on the same day makes it impossible for the party to maximise the effectiveness of this tactic, and this indeed is widely thought of as the single most important reason why the current administration of Junichiro Koizumi cannot call for "double" elections.

So long as there is no general election, Koizumi can stay in power for a prolonged period, until October 2007 at the longest, but in practice at least for another year. What then could be stumbling blocks for him?

The situation in Iraq: A group of 30 JGDF troops left for Iraq on the 16th of January, making it Japan's first ever dispatch of ground troops to an overseas quasi-combat zone. The focus has already shifted, albeit tacitly, on to how many body bags will return home from Iraq in the months ahead. Koizumi must carefully monitor the pulse and temperature of the general public in anticipating this.

North Korea: Koizumi took five of those kidnapped by North Korea back home in October 2002, yet their family members have since been held captive in Pyongyang. Whether or not, and indeed how soon, they will come to Japan to join their parents (and a wife) remains important, in fact more so than the nuclear issue per se in the minds of the Japanese. As if to demonstrate his populist skill Koizumi has reportedly tried in vain to go to Pyongyang himself to bring the family members with him. There remains a chance for him to make another attempt to boost his poll ratings.

Highway construction and related issues: Haruho Fujii, the ousted head of the Japan Highway Public Corporation has so far remained silent. He could still be explosive however, as he said he would be ready to reveal the names of corrupt politicians and officials. Remember over the years he has supervised billion-dollar public works projects and must have known first hand who bribed whom and when.

The Japanese have lately found themselves essentially cheated by the Koizumi administration that aims to construct all the highway projects at any cost despite the pledge it previously made otherwise. The public may well be outraged vis-à-vis Koizumi, depending on how the construction projects proceed and what scandals Fujii may or may not reveal.

Surprisingly, the economy may no longer pose a challenge to Koizumi and his administration. Major banks have largely unloaded their non performing loans. The consumer price index has shown a sign, though scant, that deflation is coming to an end. These will remain so as long as the stock index is kept buoyed above 10,000.