MNI ANALYSIS: Japan Opposition's Troubles Give Abe Respite

-- Main Opposition Party's Top Two Leaders Resign This Week

By Max Sato

     TOKYO (MNI) - The leader of Japan's main opposition Democratic Party said

Thursday she was stepping down over fading support from voters and party

members, sharply reducing the chances that the opposition camp will be able to

take advantage of plunging approval ratings of the scandals-hit cabinet of Prime

Minister Shinzo Abe.

     "My job now is not to work on the new party leadership but to step down ...

so we make the party stronger," Renho, who was elected president of the once

dominant party last September, told a news conference.

     Her decision followed the resignation of party secretary-general Yoshihiko

Noda Tuesday following the party's defeat in Tokyo assembly elections earlier

this month. Without its top two leaders, the Democratic Party's ability to mount

effective opposition to the Abe government are particularly dim.

     Names mentioned in the press as possible candidates to succeed Renho, 49,

are not particularly encouraging, either. Seiji Maehara, 55, a former foreign

minister, represents conservative members in the party and served as party

leader from 2005 to 2006. Yukio Edano, also 55, a liberal

lawyer-turned-lawmaker, held various cabinet posts from 2010 to 2012, including

the chief cabinet secretary.

     Renho argued that while she was able to take the offensive in criticizing

the government, she failed to bring the party together as representative of

various public voices dissatisfied with the current government. Since losing

power to Abe's Liberal Democratic Party in late 2012, the Democratic Party has

failed to present any noteworthy policy proposals, while the LDP has embarked on

structural reforms, though at a slow pace.

     Renho has also come under fire from her supporters for disclosing her own

confidential family registration records in an effort to clear up the issue of

her nationality. This set a bad precedent for protecting individual privacy and

preventing racial discrimination from worsening in Japan, liberal critics

charged.

     Born in 1967 in Tokyo to a Taiwanese father and a Japanese mother, Renho

received Japanese citizenship in 1985 but had dual citizenship until last year.

Diet members must be Japanese but the Public Officers Election Act does not

prohibit people with dual citizenship from running for office.

     Initially, Renho (also known as Renho Murata) said she relinquished her

Taiwanese citizenship when she legally became Japanese in 1985 but it turned out

that the paperwork to give up her Taiwanese citizenship was not completed until

last year.

     Prime Minister Abe's critics have said he has been too arrogant in

policymaking at the national level -- resorting to rushed voting on

controversial bills -- on the back of the majority the governing coalition holds

in both chambers of parliament. But so far opposition forces in the Diet have

not been able to capitalize on the political scandals that surround Abe.

     Newspaper polls show public support for Abe's cabinet has continued to

slide over its handling of the scandals, casting doubt over his leadership ahead

of parliamentary elections expected next year.

     The ruling Liberal Democratic Party (LDP) suffered another setback on

Sunday when it lost a key mayoral election following a crushing defeat in Tokyo

metropolitan assembly elections earlier this month. On Sunday, Kazuko Kori, a

former Lower House lawmaker endorsed by opposition parties, won the mayoral

election in Sendai City, northern Japan, defeating the candidate backed by the

ruling Liberal Democratic Party.

     While that was not bad news for Renho, her Democratic Party had already

seen its seats in the Tokyo assembly dwindle in the July 2 election, in which

Abe's LDP also suffered its worst defeat in the capital.

     Tokyo Governor Yuriko Koike, a former LDP member of the national Diet who

in the past held defense and environment cabinet portfolios, led a landslide win

with her reformist agenda for the metropolitan government. The results may

affect voting in the next parliamentary election as the Komeito party, the LDP's

current junior partner at the national level, joined forces with Koike in the

Tokyo elections.

     At this point, Abe is unlikely to dissolve the Lower House and call a snap

election because the tide is running against him and the LDP.

     When the next Lower House election takes place, before mid-December 2018,

the LDP may lose some seats but the ruling coalition is unlikely to lose a

majority unless a popular and powerful figure like Tokyo Governor Koike decides

to enter national politics and field joint candidates with opposition parties,

forming an anti-LDP grand coalition.

     Koike is busy reforming the Tokyo metropolitan government and the main

opposition Democratic Party is not very popular among voters because of internal

divisions between former conservative LDP lawmakers and more liberal members who

represent labor unions.

     During the three years when it was in power at the national level until

losing to the LDP in late 2013, the Democratic Party failed to implement

growth-oriented structural reforms, instead placing too much focus on cutting

"wasteful" spending. It also alienated bureaucrats by making controversial

political decisions and mishandled some political issues, including how to

reduce the large presence of U.S. forces on the southern island of Okinawa, the

site of fierce battles in the closing days of World War II.

     The Democratic Party imploded amid political infighting and the ill-fated

decision by the then prime minister Yoshihiko Noda to dissolve the Lower House

and call a snap election in late 2012, in which the party suffered a severe loss

and allowed the LDP and its leader Abe to return to power.

     Until recently Abe was seen leading the LDP to another easy victory in the

next Lower House election that must be called by mid-December next year but it

is now uncertain whether Abe will ride out the continuing slump in public

support and be reelected for an unprecedented third term as party chief, and

thus prime minister, in September next year.

     Opposition parties have charged that Abe showed favoritism to a close

friend over plans to open a veterinary faculty in a special deregulation zone as

part of the government's growth strategy. The friend, Kotaro Kake, runs Kake

Educational Institution (Kake Gakuen) which operates universities, high schools

and vocational schools.

     The Education Ministry has confirmed that there was a memo written by

Cabinet Office officials that urged the Education Ministry to handle the

application by Kake Gakuen because it was the intention of the Prime Minister's

Office. The ministry initially denied the existence of such an official

document.

     An expert witnesses who was a senior Education Ministry official testified

in parliament this week that he was under the impression that the order came

from the prime minister but other former and current government official

testified there was no evidence to support his claim.

     Opposition lawmakers have questioned why the government approved in January

a plan to open a veterinary school for the first time in 52 years when it is

believed that Japan had a sufficient number of veterinarians. Abe has repeatedly

denied that his friendship with Kake was a factor in the government's choice of

Kake Gakuen for the deregulation project.

     In the latest development, a group affiliated with the Japan Veterinary

Medical Association alleged last week that Regional Vitalization Minister Kozo

Yamamoto, who is in charge of special deregulation zones, told its executives

last November that the government had already decided to allow Kake Gakuen to

open a new veterinary department.

     Yamamoto, who sees himself as an economic policy specialist, supports Abe's

reflationary policy mix. He was a staunch critic of the Bank of Japan before the

central bank adopted an explicit 2% inflation target and embarked on aggressive

easing in 2013.

     Separately, Defense Minister Tomomi Inada, who shares Abe's nationalistic

views, also faces calls to resign over press reports of her involvement in a

ministry cover-up of daily activity logs on peacekeeping operations in South

Sudan.

     She's known for gaffes. Just days before the July 2 Tokyo assembly election

she blundered in asking for voters' support for an LDP candidate on behalf of

the Defense Ministry, suggesting civil servants were publicly supporting a

particular political candidate.

     So far the scandals that Abe is trying to defuse have not confirmed his

direct involvement. Top LDP officials may choose another leader next year if

they are certain that such a move would lead the party to another win in Lower

House elections. It will be a difficult decision for them and a lot can happen

between now and the middle of next year.

     All Abe can hope for is a steady rise in Japanese share prices and a stable

foreign exchange rate around the current level of Y110 to the dollar, a lifeline

for his administration as deregulation and investment in growth areas take time

to have an impact on the average voter's economic well-being.

     A sharply weaker yen beyond Y120 would push up import costs and hurt

households and small businesses while a stronger yen beyond Y100 would also be a

problem for exporter profits, although export volumes are little affected by

exchange rates.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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