Change the LDP, change Japan — now more than ever

David Pilling, the FT's Japan correspondent, indirectly responds to a point I made earlier this week when discussing Matsuoka's suicide in an op-ed entitled "No way back to old Japan" (subscription required).

As the title suggests, he argues that Matsuoka's suicide actually marks the death throes of the old political system:

The postwar system that is now morphing into something new depended on fast growth to survive: the LDP shovelled tax money from the cities to the countryside via huge public works programmes. It reaped dividends in the form of votes from over-represented rural constituencies and "political donations" through grateful interest groups. That system is no longer viable, for the simple reason that the money has run out. The public works budget has been savaged in the past decade. The system of paying for roads and dams with post office savings is being wound down. Indeed, the post office itself, the world's jangliest piggy bank, is being privatised.

Gerald Curtis, a Japan expert at Columbia university, says that Japan is undergoing the third great change in its modern history. The first was the Meiji Restoration, when leaders ditched feudalism. The second was the postwar construction of a machine to deliver rapid economic growth. Professor Curtis calls the third phase a "20-year decade", a glacial but valley-carving response to domestic economic crisis and globalisation. That adjustment has meant the slow breakdown of convoy capitalism, reflected in the unwinding of cross shareholdings. It also heralds the abandonment of egalitarian income distribution. In politics, it means the end of elections by money-stuffed envelopes and the rise of prime ministerial power and accountability.

Interestingly, he also argues that Abe's emphasis on education and constitution revision are signs of change, rather than examples of how Abe is interested in anything but midwifing the creation of a new political system.

I wish it were so. I wish the old system were transforming before our eyes, the Abe Cabinet being the swansong of the old era. But I think the evidence to support Pilling's argument is thin.

Undoubtedly the money is running out. There's no way around that. Politicians like the late Mr. Matsuoka have a smaller pot to fight over — but how will that affect the system? Will pork-barrel politicians decide to become reformers when faced with difficulties in earmarking funds for their constituencies? Will the incumbency advantage actually fail them as the amount of money they send home shrinks? On the contrary, won't politicians simply compete that much more fiercely to earn their share of the shrinking pie?

As for the rise of the prime minister in the policy making system, the new power of the Kantei can and has been overstated; as Mulgan argues, what's happened is that the prime minister is now the third leg of a triangular policy making system, forced to contend with the LDP's policy making organs and the bureaucracy (who still collude with one another).

The implication in Pilling's argument is that the new political system is going to emerge organically, without any individual or party actively shaping its creation. But I disagree. I don't see how Japan's political system will transform into a system in which policy is made in service of public and national interests without an LDP president willing to impose discipline on party ranks, cut PARC down to size, sharply limit interaction between bureaucrats and Diet backbenchers, and centralize campaign funding in the party. Each of these steps would require the willingness to overcome fierce opposition from the LDP. Is there anything Abe has done that would lead someone to think that he will be the man to create a new political system?

What is likely to happen that even as the old system loses its potency, it will limp along in the absence of someone stepping forward to propose a replacement. The problem is that Japan cannot wait forever to reform. Its demographic sword of Damocles (hat tip: GLOCOM), together with the inexorable rise of China and India, mean that failure to act now to "rationalize" its political system will doom Japan to irrelevancy.

Does Abe have nothing to worry about come July?

From the English-language blogosphere's resident Abe apologist comes another post arguing that all is well in Abe's beautiful Japan.

Hey, Ampontan, do you do this pro bono, or is there some kind of secret yarase blogger program run out of the Kantei? If the latter, is it too late to sign up?

I think, if the price was right, I could write posts with titles like "Let us all thank our Dear Leader for making Japan so beautiful," "Never stop being so gorgeous Japan," and "How did you get so gosh darn beautiful in the first place?"

Scratch that. I would rather ask pointed questions than make excuses, even if it doesn't pay nearly as well.

Seriously though, does Ampontan really think that this whole sordid Matsuoka affair is going to vanish overnight? This is unprecedented in the political history of modern Japan: a sitting cabinet minister committing suicide, as investigators began to uncover gross misuse of his ministry to favor political supporters. While it remains too soon to tell what impact it will have on July's elections, it is also too soon to wave it off by suggesting that Matsuoka's death will "close the book" on the seiji to kane issue of which he was emblematic.

I love Ampontan's alternative: pocketbook issues are what matter, so let's all stop paying attention to the massive corruption — and the government's alleged role in covering it up — and talk about how Japan's economy is growing again. No mention, of course, about the lingering doubts about the depth and breadth of the recovery (Ken Worsley's Japan Economy News blog has documented the bevy of mixed signals on the "longest sustained expansion" in the postwar period). This just doesn't hold water. And Ampontan doesn't even ask the obvious question of whether the Japanese people, the people who will, you know, be voting in July, are actually benefiting from The Longest Sustained Expansion in Postwar Japan. [Ed. - Laying it on a bit thick, aren't we?]

Arguably that's why the pensions scandal — which Ampontan also seems to dismiss — is important. When people are economically insecure, they tend to worry about reports that their source of income may be disrupted due to government incompetence. Is it really appropriate to doubt that the pensions scandal might be important in a country in which the percentage of over-65s in the population is set to rise sharply?

All of which goes to say that it's impossible to say at this point what issue will move this election. In Japan, more than in the US, all politics is local (to use a quote from American politics that it's even more appropriate for Japan than the quote used by Ampontan for the title of his post), making it difficult to tell which issues that seem important at the national level will filter down to the local level and affect voter behavior.

But that is no excuse for saying that all is well because the economy is growing: there are plenty of reasons for Japan's voters to "throw the bums out," even if it is unclear whether they will opt to do so (another topic of discussion entirely).

The Matsuoka saga is far from over

As fallout from Matsuoka's suicide continues to spread — with an executive at J-GREEN, the MAFF agency under investigation for dispensing contracts to companies supporting Matsuoka, following Matsuoka to the grave — the probability of the Matsuoka/seiji to kane issue looming large over the Upper House elections seems to rise by the day.

What was once a nuisance issue (remember how funny Matsuoka's claims about his drinking water were at the time), which the government could dismiss by pointing to instances of corruption within the DPJ, now increasingly appears to be symptomatic of Abe's government. Not only is Japan facing ghosts of LDP governments past, but it seems that those ghosts never left in the first place: they just found places to hide during the Koizumi interlude.

Are voters going to be forgiving of the government as stories like this emerge? Apparently on 24 May Matsuoka dined with Suzuki Muneo, who during the 1990s was Matsuoka's "twin" in the game of interfering with policy and intervening on behalf of corporations. Muneo (he is commonly referred to by his first name instead of his surname) ended up exiled from the LDP and convicted in a bribery case involving Yamarin, a logging company; Matsuoka was also implicated, but escaped legal proceedings and remained in the LDP and the Diet. Muneo, now back in the Lower House as a representative of his own New Party Daichi, has reported that Matsuoka told him that he wanted to apologize to the Japanese people for his wrongdoing, but he was forbidden from doing so by the government.

Chief Cabinet Secretary Shiozaki and LDP Secretary-General Nakagawa have both denied Muneo's claim.

If Muneo's claim is true — and given that the exiled Muneo's motives for exposing foul play by the government are far from pure, that's a big if — it throws another twist into this fiasco. Did Matsuoka sincerely desire to come clean and ask for forgiveness from the people? Truth be told, that is not altogether inconsistent with his behavior in the past. One reason why he was able to avoid prison, unlike Muneo, is that Matsuoka seemed to have an idea of when he went to far. He was capable of groveling if it meant avoiding punishment and preserving his career. As such, if the government actually muzzled him, his suicide could well have been an attempt to drag the government down with him.

That said, if that was the case, why would he leave eight suicide notes, reportedly none of which contain claims similar to Muneo's? Of course, the actual contents of the notes may never be fully reported to the public.

All of this means that there are enough unanswered questions — without even mentioning the details of the scandals in which Matsuoka was embroiled — to keep this matter festering for the next two months, no matter how hard the Abe Cabinet tries to stifle it.

This is a question for readers and my fellow bloggers: what do you think could bring down Abe — outside of disastrous election results? Could questions about the wisdom in selecting Matsuoka in the first place, which would cast serious doubts on Abe's political judgment, be enough to spark a movement within the LDP to show Abe the door before his leadership causes more damage? And, as an indicator of that movement, should we expect to see moves within the LDP to coalesce behind a successor sooner rather than later?

Whitewashing Matsuoka

Others bloggers have provided thorough reviews of the press response to Matsuoka Toshikatsu's suicide — see Adamu's post at Mutantfrog and Matt Dioguardi's at Liberal Japan — so I will not do so here.

Instead, I want to take issue with the Yomiuri Shimbun's editorial on Matsuoka's death (and by extension Abe's high praise for Matsuoka's skills as an agriculture policy specialist), specifically what it says about Matsuoka's role in agriculture policy.

Yomiuri comments:

High priority has been given to the promotion of the WTO and free trade agreements, and agriculture policies to reform domestic agriculture.

Prime Minister Abe appointed Mr. Matsuoka, a former MAFF bureaucrat, as minister of agriculture because of his command of the details of agricultural issues. He judged that if Matsuoka was the minister, he could stifle domestic opposition so to maintain progress on liberalization.

Moreover, in the agreement to commence negotiations on economic partnership agreement (EPA) with Australia, he valued the agriculture minister's abilities.

In the age of globalization, what should Japanese agriculture do? His death comes at a critical moment.

The implication in this passage is that Matsuoka's presence at the head of MAFF made a critical difference for the adaptation of Japanese agriculture to globalization, that he was a great free trader struggling against the forces of protection in Japanese agriculture.

Anyone with a passing familiarity with Matsuoka's activities as a norin zoku member would know that he has, if anything, been the leader of the forces arrayed against liberalization of agriculture. Aurelia George Mulgan describes incident after incident of Matsuoka — prior to his service as minister of agriculture — traveling abroad to harry WTO officials and trade representatives from other WTO members, trying to impress upon them the uniqueness of Japanese agriculture as grounds for protecting it. Defenders of Matsuoka might point to his efforts to promote Japanese agricultural exports, efforts that drew the support of former Prime Minister Koizumi — but promoting exports did not make Matsuoka a free trader, they made him a mercantilist of the basest sort, because he was hardly enthusiastic about the prospect of more liberal food imports. If he supported trade agreements, it was because they presented an opportunity for the government to redistribute funds to farmers — his supporters — who would purportedly be harmed by trade agreements. It is telling that one of Matsuoka's major activities during the 1990s was participation in the LDP's committee concerned with Uruguay Round countermeasures.

Matsuoka was similarly opportunistic as an environmentalist, which he came to realize was another way to direct funds to rural Japan; he could argue that support for farmers was critical to keeping Japan "green."

If Matsuoka was an expert on the details of agriculture policy, it was because he spent so much time trying to figure out ways to direct more money to rural constituencies, resulting in more money for his campaign chest.

None of this is secret. It was all laid bare in Aurelia George Mulgan's Power and Pork, which in some way reads like a record of the charges against Matsuoka from the span of his career.

Grief over a tragic death is no excuse for whitewashing Matsuoka's past as protectionist Japanese agriculture's best friend in Nagatacho.

"An indispensable man of talent for agriculture administration"

Prime Minister Abe has given an official response to the suicide of MAFF Minister Matsuoka Toshikatsu — what Sankei Shimbun has dubbed a "shock" to Japan's political world. While all parties and players are shocked by the news, however, the uniform response seems to be that Matsuoka's suicide, coming on the heels of revelations about widespread government mismanagement of pension payments.

Facing another crisis of confidence in his government, Abe addressed the news, noting, "Naturally as prime minister I feel responsible for actions taken by ministers in my cabinet." He also said that there will be no investigation of either allegations about the misuse of political funds that Matsuoka claimed to have used to pay utilities in a rent-free office at the Diet Members' Office Building or allegations about funds received from companies that received contracts from MAFF.

I suppose that that was to be expected, but at the same time, this issue should not be swept under the rug. Japan needs to confront how its politicians make policy, corruption and all. While it would be inappropriate now to make Matsuoka the face of corruption, the record of his wrongdoing remains — and he is far from the only politician to indulge in the acts that he allegedly performed. The challenge for the DPJ and other opposition parties in the two months before the Upper House elections will be to find a way to emphasize the need for comprehensive political reform, especially as far as political funds are concerned, without being seen as attacking the late agriculture minister personally.

Meanwhile, as Asahi (and every other newspaper) reports, pressure within the LDP for a cabinet reshuffle, already strong before this incident, has grown inexorably. The likelihood of Abe's nominating a new cabinet in the month between the end of the Diet session and the Upper House elections seems high. Will it make a difference? If events continue to unfold for the government as they have the past week, probably not. While Abe may survive the elections intact — barring a DPJ landslide — his authority as prime minister seems to have taken a critical blow, from which it may prove difficult to recover.

Matsuoka Toshikatsu, RIP

Beleaguered Agriculture Minister Matsuoka Toshikatsu was found dead by his own hand this afternoon.

I am somewhat hesitant to comment on the political ramifications, seeing as how this is a grim end to a sordid affair (and career); but it demands some response. Obviously I mean no disrespect to those grieving. This is a terrible end, and it should not be celebrated.

Nevertheless, as the campaign for the 2007 Upper House elections ramp up, Matsuoka's suicide may have dramatic ratifications for the outcome of the election. Consider that just before his death, newspapers reported that the Abe Cabinet's popularity had suffered a drastic decline (Mainichi reported 32% support versus 44% opposed; Nikkei reported 41% support versus 49% opposed, with a 12% drop in support). It is difficult to see how Matsuoka's suicide will stanch the government's hemorrhaging of support. If anything, Matsuoka, by his death, may have raised the "money and politics" issue to greater prominence in debates leading up to the election. It is certainly hard to see the election being contested on constitution revision after this, no matter how much Abe insists that it should be.

The unknown factor is whether there will be a sympathy vote, and if so, will it be big enough to turn the tide in the LDP's favor. Obviously it is much too early to tell. But this election will be closely contested, and every little twist in the coming days could have an impact come July.

In any case, Matsuoka ought not to pass on without leaving his mark on Japan. With luck, the full extent of his gross misuse of his office since his first election in 1990 will see the light in the coming days and weeks — spurring the Japanese people to demand an end to, once and for all, the LDP-controlled policy making system that has enabled Diet members to direct public funds to private ends and to place private interests before the public interest. Now that would be a fitting tribute to a man who lived on a steady diet of pork-barrel spending and borderline bribery.

Does anyone really think that a political system headed by a cabinet in which one minister commits suicide to avoid facing questioning over his alleged corruption, two others resign due to corruption charges, and a third stonewalls when criticized for calling women "machines for making babies (with the prime minister defending each in turn) is healthy? (But as Shisaku rightly points out, it is not the suicide that makes Japan's political system problematic, seeing as how it's the first suicide of a cabinet minister in the postwar era.)

UPDATE: I should add that I actually had a grudging respect for Matsuoka. Unlike many of his peers in the Diet — who either inherited their seats from their fathers or glided effortlessly from Tokyo University to elite, generalist positions in the bureaucracy to the Diet — Matsuoka was a self-made politician. After failing to earn admission to the National Defense Academy, he went to Tottori University, where he studied forestry, after which he began work as a specialist at the Ministry of Agriculture and Forestry. Being a specialist and not a generalist, there was a limit to how high he could rise in the ministry.

When he quit the ministry to enter politics, he had to struggle to acquire the three "bans" necessary for a Japanese politician: the jiban (local support base), kanban (name recognition), and kaban (money). Elected in 1990 under the old medium-sized electoral district system, he ran without LDP endorsement against four LDP incumbents in a five-seat district.

In short, whatever limits he encountered, Matsuoka strived to overcome them. The shame is that once he acquired power, power became an end in itself. (All of this is discussed in Aurelia George Mulgan's excellent — and timely — Power and Pork, discussed in this post.)

Book of the week

As the regular session of the Diet winds down — and with the government's priority legislation passed — it seems that the matter of Agriculture Minister Matsuoka Toshikatsu has returned to the forefront of the national political agenda.

In light of that, this week's book of the week is Aurelia George Mulgan's study of Matsuoka, Power and Pork. (I should also note that the Far Eastern Economic Review's June issue will include a review of this book by yours truly.)

In this book, George Mulgan narrates, in lavish detail, Matsuoka's career from his time as a specialist in the Ministry of Agriculture through his political career from his first election to the Lower House in 1990
to the time when he joined the Abe Cabinet, just prior to the publication of this book. The picture that emerges is that for all the talk about how Japanese politics changed when the LDP briefly lost power in 1993, the rules of the game remain depressingly familiar. Despite the Koizumi interlude, when it looked as if maybe, just maybe, Japan might be on the brink of a new era, under Abe it seems that Nagatacho is back to business as usual. With Matsuoka stonewalling his critics under the protection of the prime minister, the Japanese political system seems as inadequate to the challenges it faces as ever before. (For a summary of the Matsuoka saga, check out this recent post at Trans-Pacific Radio.)

Of course, each week seems to bring new news of Matsuoka's wrongdoing, and more criticism. On Saturday, at a general meeting of the Gifu branch of the LDP, Kaneko Kazuyoshi, chairman of the Lower House Budget Committee, suggested that Matsuoka should resign after the Diet session ends and further suggested that a cabinet reshuffle may be in order. This is in light of revelations this week that Matsuoka received donations from construction companies that received contracts from the Japan Green Resources Agency ('J-GREEN') of the Ministry of Agriculture, Forestry, and Fisheries. Readers of George Mulgan's book will find that this is entirely consistent with the span of Matsuoka's career. Matsuoka has excelled at securing public funds for corporations, which subsequently direct donations to his political support groups.

In short, putting Matsuoka at the head of MAFF is about as good an example of putting the fox in charge of the chicken coop as one can find.

Of course he should be forced to resign. But that's a matter of course. Political reform, starting with measures to require detailed reporting of all donations and expenditures by political support groups and measures to curtail interaction between bureaucrats and Diet members, is needed to deprive Japan's Matsuokas of opportunities to pervert the system to private ends.

Will the newly buoyant prime minister add political reform to his agenda, starting with the sacking of Matsuoka? With Abe, and Nakamura Shoichi, Abe's id, defending Matsuoka, not bloody likely.

George Bush helping Matsuoka?

George Bush, speaking to the National Cattlemen's Beef Association, issued a challenge to Japan (and others):

Today, more than 100 countries have fully or partially opened their markets to U.S. beef. The objective of this administration, however, is to make sure that they're better than partially opened, they're fully opened, including the countries like Japan and Korea. We're also working to open up markets that have still got a ban on our imports. In other words, this is an important part of our foreign policy. When I'm talking to leaders and they've got an issue with American beef, it's on the agenda. I say, if you want to get the attention of the American people in a positive way, you open up your markets to U.S. beef. People understand that when it comes to being treated fairly in the world marketplace.

This might be just the thing to revive Japanese Minister of Agriculture, Forestry, and Fisheries (MAFF) Matsuoka Toshikatsu's sagging political fortunes, giving him the opportunity to pose as the defender of Japanese consumers from disease-ridden American beef (a role he has relished playing since the beginning of his political career).

Of course, it may well be too late for Matsuoka to save himself. Mainichi reports that Kamiwaki Hiroshi, a graduate professor of law at Kobe Gakuin University and head of a citizen's group called Political Funds Ombudsman, is preparing charges against Matsuoka for five years' worth of false reporting by his support group, The Matsuoka Toshikatsu New Century Politics and Economics Association. Kamiwaki said: "As is expected, the agriculture minister has not satisfied his obligation to provide an explanation; this illegal issue must not be neglected. Efforts to solve this case in the Diet have stalled, so I think that he must be indicted and the facts made clear in a courtroom." It is encouraging to see an NGO act independently to hold the government accountable. Stories like this suggest that there may be hope for Japan yet.

The question is whether Abe's stalwart defense (not to mention appointment to the cabinet) of a senior LDP politician with a long history of political activities of dubious legality will have consequences for the LDP in next month's local elections or July's Upper House elections. I would like to think it will, but then the Japanese public seems to have high tolerance for corrupt dealings by the LDP.

Seen and heard at the Diet

I was in attendance at today's session of the Upper House's Budget Committee, where it was my boss's turn to question the government.

I managed to see a line of questioning derived entirely from my own research posed to Prime Minister Abe and Defense Minister Kyuma, which was satisfying -- although the acoustics of the chamber (and lousy mics) made it difficult to hear the replies.

Meanwhile, having sat in that room, I can understand why one often sees members in attendance asleep in the background; between the marathon length of the meetings and the excessive heating in the committee room, it's amazing that anyone can stay awake. (And let's not forget the prime minister's anti-charisma.)

One thing I've noted in watching Diet deliberations is how sensitive the Japanese political establishment is to (critical) commentary on Japan from abroad. In a short span of time today, both the recent NY Times editorial on the comfort women resolution, discussed in this post, and the recent Newsweek cover article on Abe's unpopularity were cited by questioners. This was not the first time that I've heard Diet members draw on Western coverage of Japan. (If anyone knows of a "political psychologist" who has studied Japan's national "neuroses" -- surely a rich topic -- please let me know.)

International criticism shows no sign of letting up. The latest publication is The Economist, which in the current issue has both a leader and an article about Abe's problems in the wake of his comments on the comfort women resolution. (Adamu beat me to writing about this article.) Abe remains in trouble, but he's also been fortunate in his enemies; despite weeks of opposition questioning in the budget committees of the Lower and Upper House, the opposition parties seem to have done little to hasten the pace of the decline in Abe's popularity . The Abe Cabinet has remained particularly defiant on the issue of Agriculture, Forestry, and Fisheries (AFF) Minister Matsuoka Toshikatsu's unusually large budget projections for "light, heat, and water" for an office at the Diet which had no utilities costs, with Minister Matsuoka still refusing to account for the irregularity (with no apparent pressure from the prime minister or other senior officials).

Matsuoka, for his part, is the subject of a recent book by Australian scholar Aurelia George Mulgan, called Power and Pork, which I am in the process of reading -- and which I plan to review.