Transcript: CSIS Press Conference Call on Japan's Snap Election
October 19, 2017
SOFIE KODNER: Hi, everyone. Welcome to our press conference call ahead of the Japan election, which will take place in just a few days, on Sunday, October 22nd. We appreciate you taking the time to join us, and thank you to our AT&T operators for their assistance.
I’m Sofie, the media relations coordinator. And as a reminder, this call is being recorded, and a transcript will be available and disseminated later today.
Dr. Michael Green, our CSIS vice president for Asia and Japan Chair, is with us today by phone. And here with me at CSIS we have Nick Szechenyi, deputy director and senior fellow with the CSIS Japan Chair. Dr. Green will present his remarks, Nick will follow, and then we will open up to Q&A.
So, without further delay, I turn the conference over to Dr. Green.
MICHAEL J. GREEN: Thank you, Sofie.
Thank you for joining the call. Nick and I thought it would be a good idea to give people an opportunity to quiz us on this election. We probably have some people on the call who are experienced political reporters from Japan and some who are not, so we thought we’d open up with some broad comments about the background to this October 22nd election and what’s at stake in terms of Japanese policy and politics, and also what it will mean for U.S.-Japan relations and President Trump’s upcoming visit to Japan in early November.
The election was called by Prime Minister Abe because he was seeing internal LDP polling that was showing the LDP had a very good chance of keeping its supermajority – of losing few, if any seats. And he also saw an opportunity to do a preemptive strike and dissolve the Diet before Tokyo Governor Koike – Koike Yuriko – could form a party and challenge the LDP. And he could see clearly that the Democratic Party in Japan, the main challenger, was in disarray and internally divided.
So he called the election, and then, as many of you would know, was caught off-guard when Koike worked with Maehara Seiji to start to pull together a brand-new party where she didn’t have one and actually form a threat to the LDP. And that, of course, was her Kibo no To, the Party of Hope. The DP split, and the left wing of the party created the Constitutional Democratic Party under former Chief Cabinet Secretary Yukio Edano. But the formation of a – of a new party out of – out of scratch came as a surprise, a shock to the LDP, as did polling that showed the LDP was not as popular going into the election as their own internal polling had shown.
And I think the reason for that was that I worked for the Iwate Nippo covering local politics in Iwate, as did Nick, some decades ago. And the LDP polling is based on door-to-door surveys that are reliable when you ask who would you vote for if we had an election. But actually dissolving the Diet for convenience clearly struck the media and the public as too cynical, too almost arrogant, by the government. And that hurt their polling badly.
So suddenly there was a real sense of crisis. That has abated. And the polling and the obvious disarray of the opposition, the fact that RENGO, the main institutional supporter for the opposition parties, the labor-union confederation, is backing no party but only individuals. All of that has created a higher level of confidence in the LDP and their partners, Komeito, that, if polls are right, they could retain, between them and their coalition, two-thirds majority. And that would certainly keep Mr. Abe in place.
About 20 percent of voters remain undecided. That’s actually quite low compared to recent history in Japanese politics. And certainly, after the Brexit vote in the U.K. or the presidential election in the U.S. last year, the Japanese saying is “issun saki wa yami” – one step ahead is darkness – you can’t make any prediction with confidence anymore about elections. But it certainly seems that the coalition will stay in power and that they have a, I think, better than 50/50 chance of retaining two-thirds majority, which would add much greater stability.
In terms of the issues at stake, the prime minister and the government called the election based on the need to reconfirm the government’s position as the leading party and coalition that can defend Japan against the North Korean threat, to keep Abenomics and economic strategies moving forward, and to address the constitution and also consumption-tax increase.
But in a way, it was an election about nothing. It was mainly about the Abe government trying to lock in its position before it has to dissolve the Diet so that it can have a stable government, and with success get Prime Minister Abe reelected as president of the LDP in September and rule until after the Tokyo Olympics, until 2021.
But to the extent those policy – the issues I mentioned were those issues, the opposition, the new Party of Hope of Governor Koike, you know, has been struggling to define its difference. Of course, Koike was the national security adviser to Prime Minister Abe when he was prime minister the first time, in 2006 and ’07. And so they’ve been trying to distinguish themselves from the LDP, and have done so by taking a somewhat more populist position on some issues from the government; for example, supporting the U.S.-Japan alliance but calling for a revision of the status-of-forces agreement, SOFA, which is always convenient because, you know, from the U.S. perspective, the alliance only works if we have a good SOFA agreement. But the SOFA agreement is often unpopular in Japan.
So saying I agree with the alliance but we need to renegotiate the SOFA, the status-of-forces agreement, is one way to criticize the government without attacking the alliance. That was similar to the position the DPJ took in 2009 when they were trying to challenge the LDP.
The Party of Hope has also contested the consumption-tax increase, which is somewhat unpopular, and nuclear power, which is somewhat unpopular, so has taken positions that are held by the government, seen as necessary for security or economic growth, but difficult and unpopular and without a national consensus. And the Kibo no To, the Party of Hope, has tried to distinguish itself.
If the – if the Abe government loses, if there are significant losses – and in many ways the media, combined with the politicians, will try to define what is that line that’s considered a loss, even if the government maintains its majority. And if the line is 30 to 40 seats, which seems like an unlikely number of seats for the LDP to lose, but if that’s it and that’s the general sense in the media and among the politicians. And if the seats fall, the LDP falls that far, and Prime Minister Abe is forced out, probably for another LDP politician – I mean, Mr. Ishiba who – a former defense minister, or Kishida, the former foreign minister, or maybe Noda Seiko, currently the interior minister. If one of them comes forward, the impact will be significant.
I think from the U.S.-Japan perspective, while none of these politicians has a dramatically different view from Prime Minister Abe on the security relationship, North Korea, China or the economy, there would nevertheless be concerns about how stable the Japanese government would be, and memories of the DPJ years, but also the LDP years before that, when you had a different prime minister every year and it was extremely difficult to make progress on defense issues, on trade issues. And confidence in Japan sagged in the U.S. Congress and in public opinion polls.
There would be some concerns about three issues that are important to institutional investors, Wall Street, the Treasury Department, outside observers, and stakeholders in Japan’s economic growth. And the issues that would be shaken, even if the opposition party didn’t come to power, would be, number one, what would happen to Governor Kuroda of the Bank of Japan? What’s what a lot of institutional investors, financial investors would wonder about. What would happen to interest rate policy? What would happen to Abenomics? That could have a major effect.
Second issue people would question is what will happen to energy prices in Japan if nuclear power – if the government loses, would nuclear power be an even bigger trouble in Japan? And that would raise questions about the attractiveness of Japan for foreign direct investment, for manufacturing, for economic growth. And number three, the consumption tax. Would the consumption tax raise, even with the government’s proposal to spend half of it on social welfare, would it become too hard to do? So those are three questions people would have on specific economic policies if the election forced the prime minister to resign.
But the much more likely scenario is that the LDP and Komeito hold on to a strong majority. And I would say it looks now like, better than 50/50, they keep a super majority. I think that will be reflected in the market. There would be some confidence. But the polls show that although the LDP and Komeito will do well, the prime minister’s personal popularity is still in the high 30s, low 40s. And he may be under pressure, even with a win, to reshuffle the Cabinet, to bring in some younger and newer voices to satisfy those in the party who might feel that they should begin positioning for a change from Mr. Abe. So he may reshuffle the Cabinet to bring some of those people in.
So I think you may find, even with a victory, a more pluralistic coalition government in Japan, with more voices. Perhaps, I would argue, a somewhat more moderate stance on China, while retaining a continued hard line North Korea, probably continuation of the Abenomics line. It would lead, I think, to a better summit meeting when President Trump goes, because Prime Minister Abe would, with a victory, be facing the president in a very strong position, likely to stay in power, you know, until 2001 (sic).
And the Trump trip will be difficult. On the security side, the president’s likely to emphasize the theme you heard from Secretary Tillerson yesterday at CSIS, the idea of a free Indo-Pacific, highlighting India and Japan and Australia. Very reminiscent of Prime Minister Abe’s diamond strategy, of linking the U.S., Japan, Australia and India. And so in terms of security policy, on broad, maritime, democratic solidarity, very strong alignment between Trump and Abe, and on North Korea as well.
On the economic side, much more difficult, of course. The Aso-Pence meeting this week was constructive, but yielded no conclusions on some key issues. The U.S. is out of TPP under Donald Trump, claims it wants a bilateral FTA. It’s not clear whether there’s any movement towards that, given how overwhelming NAFTA and KORUS renegotiations are for the U.S. side.
But there are also three very tough issues that Aso and Pence tackled, or tried to tackle – auto parts access in Japan, beef markets, and drug pricing – and they didn’t reach a resolution. And those are the kinds of issues that, if unresolved, could lead President Trump to tweet or criticize the Abe government on economics. But certainly, if the government in Japan comes out of the election stable with confidence in the long term, it will be much better-positioned to deal with those kinds of issues and to emphasize the positive themes.
If the election goes badly, it will clearly complicate – if the election goes badly for the government, it will clearly complicate things for the Trump visit. But I would emphasize that, despite the differences on energy policy or consumption taxes, Koike, Maehara, Ishiba, Kishida, there’s not a pronounced difference in what the agenda would be for the U.S.-Japan alliance.
Let me turn it over to Nick, who’s following this very closely and also worked in local political reporting, and then we’ll open it up to questions. Nick?
NICHOLAS SZECHENYI: Yeah. Thank you, Dr. Green. And thank you all for joining.
I would just briefly reemphasize some of the themes that you heard. I think if the ruling coalition prevails, number one, it means stability in Japanese politics; and, number two, continuity in the policy trajectory for Japan. And that will naturally sustain momentum not only for President Trump’s trip, but for the bilateral agenda between the U.S. and Japan going forward.
In terms of what – should Abe prevail, in terms of what might happen domestically, I would just note briefly that looking at recent public opinion polls it’s quite clear that the voters in Japan are still very much concerned about economic issues. And while there is quite a buzz about constitutional reform, I think in this second term Prime Minister Abe has recognized the importance of continually engaging the public on his strategy for economic revival. And so I think we would see the economic agenda retain its prominence, because without sustainable growth and economic power the broader strategic framework that Prime Minister Abe’s trying to implement for Japan is – becomes much more difficult.
So I just wanted to add those two brief nuggets to what Dr. Green outlined.
MR. GREEN: Thanks. And, yeah, we’re happy to take questions now on the visit of President Trump, on the scenarios for the election, on the Iwate politics, because Nick and I are experts on Iwate if nothing else. So we’re open for questions.
OPERATOR: Thank you very much.
(Gives queuing instructions.)
And our first question comes from Nico Pandi with Jiji Press. Please go ahead.
Q: Good morning. Thanks so much for doing this.
I wanted to go back briefly to comments Dr. Green made about potential reshuffle of the Cabinet. Specifically, do you see any possible changes for the positions of foreign and defense minister, considering how recently they both were appointed? Would Abe do that, or do you think they are – they are safe? Or, if they are at risk, who might – who might be put in those spots? Thanks.
MR. GREEN: That’s a good question, and I think the answer is those two jobs are not likely to change. You know, the defense minister is a veteran who’s been in the job for a long time. He replaced a rising star, Ms. Inada Tomomi, who stumbled on a number of political issues and is now in the wilderness. I don’t think her career is over, but she definitely is taking a timeout from a prominent Cabinet role. And given that the prime minister emphasized continuity on North Korean policy, I don’t see how he changes the defense minister.
And the foreign minister, Kono Taro, a good Georgetown grad, a good friend of mine, is young and interesting and people follow him on Twitter and they like him. So he’s doing well and I don’t see that changing.
If there are changes, it would be more on the economic portfolio. Also, Taro has been deputy prime minister and finance minister for some time. It’s possible that ‒ that’s a very powerful post, it’s two very powerful posts. It’s possible they split them up, for example, where Aso stays as deputy prime minister, critically to manage the Aso-Pence dialogue, but they bring in a new finance minister who would have a key role in winning support for the consumption tax. And there are some senior political figures, you know, Mr. Motegi and others, who are kind of waiting their turn.
It kind of depends on how the prime minister and the government and the LDP actually see the results of the election, read the mood. And I don’t know if there will be a Cabinet reshuffle. I don’t think you can predict it, but I think it is one possibility. But not defense and foreign affairs. That’s a good question. I think those are areas where the government is trying to emphasize continuity.
OPERATOR: Thank you.
(Gives queuing instructions.)
All right. Allowing a few moments here, I’m showing no additional questions in the queue. Please continue.
And presenters, do you have any closing comments today?
MS. KODNER: OK. Yes, thank you all for joining us.
Nick or Michael, please let us know if you have any closing comments.
Once again, we will be sending a transcript of the remarks shortly after. Please feel free to reach out to me with any questions you may have. My email is firstname.lastname@example.org. Thank you very much again, and we’ll be in touch.
Thank you, Michael and Nick.
MR. GREEN: Thank you all.
MR. SZECHENYI: Thanks.