By Bruce Klingner

Bruce Klingner is Senior Research Fellow for Northeast Asia at the Asian Studies Center of The Heritage Foundation.

Yasuo Fukuda, selected on September 26 by Japan’s ruling Liberal Democratic Party (LDP) to replace Shinzo Abe as prime minister, is an experienced, if uninspiring, consensus builder. While Fukuda’s principal opponent, Taro Aso—an outspoken hawk on foreign policy—would have risked alienating Japan’s neighbors and the opposition Democratic Party of Japan (DPJ), Fukuda will be more accommodating toward North Korea and China and will be willing to reach across the aisle to the DPJ.

Compared to his predecessor, Fukuda will be less inclined than Abe to press for removing legal restrictions to allow Japan to assume a larger regional security role, a major change in Japanese policy advocated by Washington, but this will not unduly impact the U.S.–Japan relationship.

To regain the trust of the electorate that punished the LDP in July’s upper house election, the new prime minister will have to focus on domestic economic issues. The length of Fukuda’s tenure will depend on his ability to balance conflicting LDP demands for pork barrel spending to appease alienated rural constituencies—once the party’s stronghold—and the need for prudent economic policy that will improve Japanese competitiveness without growing the deficit.

Abe’s Fall

Fukuda’s selection was necessitated by Shinzo Abe’s September 12 announcement of his intent to resign as prime minister “to take responsibility for causing political confusion,” a reference to the LDP’s humiliating loss of the upper house of parliament in July 29 elections. Though Abe’s announcement was not surprising, the timing was, coming just two days after his September 10 pledge to fight staunchly for renewal of anti-terrorist legislation critical to the U.S.–Japanese alliance.

The LDP suffered from the electorate’s anger over the government’s loss of 50 million pension records and a series of scandals that led to the resignations or suicides of several cabinet ministers. The scope of the LDP’s defeat in the July election, especially in its rural strongholds, reflected a deeper anguish over the disparate pain imposed by the economic reforms of Abe’s predecessor, Junichiro Koizumi. A disenfranchised countryside felt bypassed by the national economic upturn and punished the LDP for cutting public works projects and tax transfers to local governments.

A Course Correction, Not a Reversal

Though some expect drastic policy changes from the reputedly dovish Fukuda, he will likely maintain most of his conservative predecessor’s policies, with some adjustments. The most significant will be the reprioritization of Abe’s signature issue: pursuing the constitutional and legal revisions necessary for Japan’s self-defense forces to assume new missions and for Japan to play a larger security role regionally and internationally. Fukuda is a proponent of a strong U.S.–Japanese alliance, but he does not share Abe’s zeal for using Japan’s armed forces as a policy instrument or for forming a “broader Asia” partnership of democracies—Japan, India, the U.S., and Australia—to contain China.

While Fukuda’s foreign policy will not be as U.S.-focused as his predecessor’s, it would be a mistake to see this as a repudiation of the U.S.–Japan bilateral relationship. Fukuda has vowed to renew the Anti-Terrorism Special Measures Law which allows Japanese tankers to refuel Coalition naval forces in the Indian Ocean that support operations in Afghanistan. The United States sees the legislation as critical to continuing the global war on terrorism and a test of Tokyo’s relationship with Washington. But the prime minister is operating in a more restrictive domestic political paradigm brought about by his party’s loss in the upper house election.

Ichiro Ozawa, head of the DPJ, will not back down from his opposition to the refueling mission. Ozawa sees the legislative impasse as an opportunity to force the dissolution of the lower house for a new election, and an electoral win would enable his party to select the next prime minister. The LDP’s two-thirds majority in the lower house allows it to override a DPJ veto in the upper house, but this will be a last resort for Fukuda, who undoubtedly hopes to avoid confrontation on the issue. A lower house veto override is only possible after a 60-day delay, ensuring that there will be a gap in Japanese participation after the November 1 expiration of the current law.

Reaching Out to Japan’s Neighbors

Fukuda will continue Abe’s efforts to repair Japan’s relations with its neighbors, which were strained by former Prime Minister Junichiro Koizumi’s visits to the controversial Yasukuni Shrine. Fukuda has vowed not to make an official visit to the shrine, which other Asian nations say honors past Japanese militarism. A majority of the Japanese public saw Koizumi’s visits as problematic and will likely welcome Fukuda’s restraint.

More problematic, however, will be Fukuda’s vow to show greater flexibility in his administration’s approach to North Korea. Abe’s firm stance on the abductee issue was derided by the academic intelligentsia as marginalizing Tokyo’s role in the Six-Party Talks on North Korea’s nuclear program. But Abe’s position reflected the will of the populace, which consistently identifies resolving the kidnappings as Japan’s foremost foreign policy objective.

Although Fukuda will probably not announce any change in policy on the abductee issue, he may be more willing to accept less from North Korea than Abe. This could be a step toward the normalization of diplomatic relations with Pyongyang. Whether the Japanese electorate will accept it is another question. Barring a major spontaneous shift in the public mood, the Fukuda administration may have to undertake a significant public relations effort to convince the public that the Six-Party Agreement’s provisions on the abductions are sufficient.

Mixed Signals

The Fukuda administration faces conflicting objectives in the realm of economic policy. LDP leaders will press for pump-priming initiatives to alleviate the impact that Koizumi’s economic reforms have had on rural constituencies. Panicking party leaders have called for increased funding in an effort to regain voter support before the 2009 lower house election. Fukuda, however, has advocated cutting back on public work projects and continuing economic reform. But many economists are now worried that the siren song of increased government spending will prove hard to resist.

Fukuda’s intentions remain unclear; he has come down on both sides in recent statements. This month, Fukuda tempered his stance on reform, saying that the government must “carefully address problems arising from reforms” to alleviate their negative impacts. Efforts to expand spending, however, will face opposition from the finance ministry and international investors, who favor fiscal restraint at a time when the public debt remains high. In any case, he will have to operate within a narrow set of constraints and thus could find it difficult make big transfers to the rural regions.

Conclusion

Slow and steady will characterize Fukuda’s administration, with quiet consensus building substituting for what would have been a more confrontational approach by Taro Aso. Fukuda’s selection reflects a reassertion of control by LDP faction chiefs, who saw the new prime minister as a greater break from the unpopular sAbe than Aso and see the need to rebuild public trust. The appointment—the second selection of a prime minister based on only the popular mandate of the 2005 lower house election—has raised perceptions of a return to backroom politics, generating some support for Ozawa’s call for a snap lower house election. Whether Fukuda acquiesces remains to be seen, but he has shown some preliminary interest.

Lest Fukuda follow the path of Abe, he must be seen as making rapid progress in fixing the government’s loss of pension records and in improving conditions in rural constituencies. To broaden support, the prime minister is likely to compromise on the gains his predecessors made in asserting a new regional security role for Japan. Abe’s departure less than a year after assuming office—and the chance that Fukuda may fair no better—raises concern that Japan will return to the pattern of ineffectual prime ministers serving brief terms that prevailed through much of the 1990s. A revolving-door leadership would have serious consequences: political gridlock, delays in necessary but painful economic reforms, and marginalization in international relations. It also would raise questions in Washington over Japan’s role as an ally.

America’s most pressing priority in the current political turmoil is to secure renewal of the anti-terrorism legislation. However, U.S. policymakers should be careful about using the legislation as a measure of the countries’ overall relationship. Context is important, and the political scene in Japan has changed dramatically since the July elections. Because the opposition DPJ intends to use this legislation to induce a political confrontation with the LDP, Washington runs the risk of needlessly straining the broader relationship with Tokyo. Should that happen, the U.S. could wind up undermining its long-term objective of having Japan assume a larger security role in northeast Asia as a bulwark against the military threats of North Korean and China.

Fukuda’s quiet professionalism will be severely tested early and often. He must overcome perceptions that he is simply a caretaker prime minister beholden to LDP factional leaders. If he cannot reverse the LDP’s flagging public approval soon, the Japanese ship of state may see another captain forced to walk the plank.

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