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Japan: Conservatives Win Big

December 16th, 2012
in econ_news, syndication

Econintersect:  Former Prime Minister Shinzo Abe will be returning to the top position in the Japanese government after his party, the conservative Liberal abe-japanSMALLDemocratic Party (LDP) won nearly 300 seats in the lower house.  A 2/3 majority in the House of Representatives (320 votes) is needed to over-ride votes in the  upper house of  The Diet, the House of Councillors, which is fragmented among many parties.  Before the election results were counted the centrist New Komeito (NK) party and LDP had confirmed they would form a coalition government if their combined votes exceded the 320 super majority.  NK  captured about 30 seats.  A third party could also support the coalition; the newly formed right of center Japan Restoration Party captured 46 seats.

Pictured is the once and future Japanese Prime Minister Shinzo Abe.

Follow up:

The previous ruling party, the left of center Democratic Party of Japan (DPJ), led by outgoing Prime Minister Yoshihiko Noda, collected only about 65 seats.  This was a far cry from the super majority the party captured by itself in the 2009 national elections. Many party leaders failed to hold onto their seats in The Diet.

The DPJ suffered from a slow response to and recovery from the March 2011 mega quake and tsunami that devastated northeast Japan and created a nuclear contamination area in that part of the country with the meltdown of the nuclear reactors there.  Japan's critical export trade total has been declining in 2012 and just days before the election it was announced that Japan was officially back in recession.

The recent economic and natural disaster turmoil in Japan has led to the formation of a number of splinter parties and a new ear for Japan may be dawning where most governments will be coalitions.  That creates the possibility of even more instability in the Japanese government than has been experienced in recent history:  There have been six previous governments formed since 2006.

A number of changes are expected in Japan's governing strategy moving forward:

  • A tougher stance on disputed territorial matters (see GEI News);
  • Return to a pro-nuclear policy which was abandoned after the Fukushima disaster;
  • Implementation of a very easy monetary policy to reverse the strong appreciation of the yen;
  • Big fiscal spending increases (stimulus) aimed at persistent deflation, and again, at the strong yen.

According to an article by NBC News, Japanese voters are confused.  There wrere a total of eleven political parties with candidates in the current election.  Most of these were splinter parties from the two major parties and were formed within the past year.  In such a situation it does not seem that the new government has very good longevity prospects.  But it is hard to envision how much more instability could occur than has been experienced over the past five years.

Click on graphic for larger image.

JapanPrimeMinisters-scince-2000

 

Even when voters think they know what they are voting for their allegence can be fickle; if they are voting when confused they may stay in support of their vote for a much shorter period of time than has been the case traditionally.  And "traditionally" the country has recently seen the average duration of each government to be less than a year (since 2006).

Editorial note: Econintersect finds the terminology in Japanese politics quite unusual:

  • The conservative party is named the Liberal Democratic Party (LDP);
  • Monetary easing is associated with the "conservative" LDP;
  • Strong fiscal stimulus is supported by the "conservative" LDP.

Based on U.S. and European politics the actions supported and the party label seem to be reversed from the western terminology.  But there is the possibility that western politicians have the wrong labels and don't know what they are doing.  Econintersect would have difficult time arguing with that retort.

John Lounsbury

Sources:









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