The crushing victory by Japan’s Liberal Democratic Party in the weekend’s elections has signalled that Japanese voters are worried, disillusioned and impatient for change. With Japan’s economy still in the doldrums, China’s influence growing and the country still reeling from the Fukushima nuclear disaster, many Japanese want a return to when the country was an economic powerhouse and its regional and domestic security was assured.
Although ignominiously defeated just three years ago, the recycled former prime minister Shinzo Abe has led the LDP back to power on a platform of getting the economy moving, standing up to China and re-starting the country’s nuclear power program. Despite around 80 per cent of Japanese voters wanting to see a phase-out of nuclear power following the March 2011 earthquake, tsunami and Fukushima nuclear disaster, Abe’s pro-nuclear LDP sees nuclear power as central to the economy’s revival.
Japanese voters threw out the governing Democratic Party following a series of failed promises, including failed tax policies, and an inability to kick-start the economy. With around 56 seats left in the Japanese parliament, the Democratic Party is now only just ahead of the radical right Restoration Party’s 52. The LDP, by comparison, with it slong-standing coalition partner New Komeito, looks to have secured around 300 seats.
The first move for the new LDP government will be to try to stimulate the economy ahead of next July’s 2013 upper house elections. On this, the new government should get the support of the Upper House, in which it currently has a minority. Should any of the LDP’s proposals not meet with immediate Upper House approval, by now commanding more than two-thirds of the lower house, it has the power to re-submit rejected legislation, hence putting pressure on the disparate Upper House parties.
The first move by the new LDP government is expected to be to increase public spending on capital works and to follow the US policy on ‘quantitative easing’ by printing more money. This will lower the value of the Yen and increase Japan’s export competitiveness. Japan will also take a more robust approach over the Senkaku Islands, which China also claims, and seek to strengthen defence ties with the US.
Australia won’t be disappointed to see Japan attracting China’s strategic attention away from the South China Sea and the Pacific. Having noted that, China is quite capable, as they say, of walking and chewing gum at the same time.
If the LDP can activate its economic stimulus plans, it will be well placed to strengthen its position in the Upper House in the July elections. This would allow the LDP to push through its more controversial plan to invest again in the nuclear industry.
From Australia’s perspective, if the LDP can implement its intended programs, along with slightly cheaper Japanese imports, there is potential for stronger Australian resource exports to Japan including. Eventually, and perhaps re-starting debate at home, these exports could include uranium.