Tuesday, July 28, 2009

The DPJ unveils its manifesto (part two)

This post continues the analysis of the DPJ's 2009 general election manifesto, which I began in this post.

Child care and education: The centerpiece of the DPJ's child care program is obviously its child allowance plan, amounting to 26,000 yen per month per child until the end of middle school. The party plans to provide half this amount during the 2010 fiscal year, and the total amount in subsequent fiscal years. It will further make public high schools free, subsidize attendance at private high schools, and make more scholarships available for students wanting to attend university.

It is hard to object to this portion of the DPJ's spending program, in that it could provide a welcome boost for younger parents and, who knows, might even have some salutary effect on the national birth rate. The question, of course, is, as with much of the DPJ agenda, whether the party will be able to cut enough elsewhere to pay for this program.

Pensions and health care: this portion of the party's manifesto is relatively unchanged from 2007. As before, the party wants to digitize pensions records, drastically shorten the period for pensions payments to be fully restored, and issue "pensions passbooks" that will enable pensioners to keep track of their own records. As for the structure of the pensions system, it wants to prevent the diversion of pensions funds (in other words, a "lock-box" for social security funds), and, more significantly, proposes to write a unified pensions system into law by 2013, based on an "earnings-related" pensions payment combined with a minimum pension drawn from consumption tax revenue that adjusts depending on the income-based pension.

On health care, the other major concern of many Japanese voters, the DPJ's central plank is aimed at the eldercare system introduced by the Fukuda government in 2008. As before, the DPJ wants to revert to the old system; as MTC summarized during last year's debate, the DPJ position is "all Japanese are equal, ergo, all Japanese should all have the same health insurance system." In this instance, the DPJ offers some promise of reform, but it is vague and lacks a specific shape and schedule: the party promises to move "gradually" towards a system that unifies employee health insurance and national insurance, which it hopes will eventually be concentrated in some sort of regional insurance system. The reality is that having been implemented, it may be impossible to undo the eldercare system without considerable disruption. The party also laments the state of medical care in parts of rural Japan, especially the shortage of doctors, and pledges to review the provision of "emergency care, obstetrics, infant care, surgery, and the like" in Japan's regions. In short, on health care the party doesn't offer much more than stopgap measures and a promise that one day that health care system will be overhauled.

Regionalization: Regionalization has been strongly emphasized by Hatoyama since he became party leader earlier this year and plans for decentralization are threaded throughout the party's manifesto. It is, after all, closely intertwined with the party's administrative reform plans. As the party notes in proposal no. 27, "Dismantling and reorganizing Kasumigaseki [metonym for the Japanese bureaucracy], and establishing regional sovereignty." The goal, the party writes, is to reverse the centralization that has prevailed since the Meiji Restoration, effectively undoing the work of Okubo Toshimichi, Aso Taro's great-great-grandfather and one of Ozawa Ichiro's heroes. Services should be provided by local governments and the relationship between the central government and local governments should be "equal and cooperative."

Central to the party's plan to decentralize the government is to change the system whereby money is dispensed from Tokyo to the prefectures. The DPJ will convene an "administrative renovation council" that will transfer power and funding for administrative works and projects to localities. More significantly, it proposes to end the conditional ("himotsuki") subsidy system that leads localities to request funds for public works projects that serve little purpose. (This system is the "H" in DPJ reformist Nagatsuma Akira's HAT-KZ acronym of the problems with the LDP system.) Instead the DPJ proposes to distribute funds to localities to use as they see fit, a plan which conceivably benefits the DPJ politically seeing as how it is vastly outnumbered by the LDP in local governments nationwide. Why not leave it to local governments to decide how to spend the money, instead of handing the money over to some local LDP baron to spend on project that benefits one of his backers and no one else? At the same time, however, the DPJ also promises to review the petitions from local governments to determine whether the locality requires the desired funds — although funds for education and social security will be preserved.

The DPJ also promises to abolish the central government's local offices around the country in the name of what the European Union calls subsidiarity — the principle that the "central authority should have a subsidiary function, performing only those tasks which cannot be performed effectively at a more immediate or local level" — but it appears that the DPJ's rhetoric about regional sovereignty is not matched by the substance of its proposals. There is considerable wisdom in those proposals, but not by any stretch of the imagination will a DPJ-led government transfer substantial power from the center to the periphery. The central government will still be providing considerable financial support to localities, even if the localities will have a bit more discretion over how funds are spent. But there is no talk of aggregating prefectures into states or other radical proposals floating around the political system for radical decentralization, this despite a request from Kanagawa Governor Matsuzawa Shigefumi, a former DPJ Diet member, to include a plan for a state system in the manifesto.

Accordingly, the remainder of the section on regionalization is rounded out with proposals to revitalize regional economies that hinge on decisions made at the national level. This section includes the DPJ's plan to scrap the gasoline tax surcharge (and eventually turn automotive taxes into a climate change tax), its plan to make national expressways free of charge, and the party's plan for 1.4 trillion yen in direct income supports for farmers to encourage, the manifesto notes, "scale, quality, environmental protection, and switching crops from the staple crop rice." As Jun Okumura has previously argued, this plan has perhaps been unfairly criticized — and it might be the most politically palatable plan to manage the transition from small-scale farming to corporate farming as small farmers retire and pass on. Finally, this section includes a proposal on the postal system, the "opaque management" of which the party argues has had a deleterious effect on regional economies. Accordingly, the DPJ proposes to "review" — that word again — the privatization process to ensure equality of service across Japan. It also promises to pass a bill freezing the sale of shares in the postal successor companies as soon as possible.

It is not quite clear how far the DPJ intends to go in reversing the Koizumi government's postal privatization plan. It seems to me that postal reform is another area in which a full-out retreat would be worse for the country and more time consuming for a DPJ government than a cursory review that examines how to ensure more service in rural areas without reverting to the pre-reform status quo. On the other hand, if the People's New Party is a member of a coalition government, the DPJ would undoubtedly be pressured to give more than a cursory review.

Employment and the economy: This section lacks the unifying theme that the DPJ attempted to introduce in other sections. Instead there is a grab bag of proposals, some of which are clearly intended to poach traditional LDP supporters (i.e., small- and medium-sized enterprises). There is a corporate tax for SMEs, from 18% to 11% and "SME charter" that will include provisions related to "the development of the next generation's human resources," the "maintenance of a fair market environment," and "the harmonization of SME financing." The DPJ promises support to SMEs to enable the smooth implementation of the DPJ's mooted minimum wage hike. It will pass a law to prevent the "bullying" of SMEs by large companies. It will revive the special credit guarantee program for SMEs. And so on and so forth. This portion on SMEs may be one of the most dismaying in the manifesto if only because it is so nakedly populist and opportunistic, little more than pandering to SMEs for their votes without suggesting how a DPJ government might create an environment in which SMEs can survive without a raft of measures from the government.

After dealing with the SMEs, the manifesto then proposes raising the minimum wage to a national minimum of 800 yen/hour, with an eye to raising the national average to 1000 yen/hour.

The last portion of this section concerns the environment and energy. As reported elsewhere, the DPJ has pledged to cut carbon dioxide emissions by 25% by 2025 — and to do so will introduce a cap and trade system, and possibly a "climate change tax" on top of it. Beyond these proposals, there are the usual plans to promote the development and use of green energy for the sake of both energy independence and emissions reductions.

Without question this section is the most disappointing in the manifesto. Nothing about structural reform whatsoever. Nothing about opening the Japanese economy to more foreign investment, more foreign visitors, and yes, perhaps more foreign workers. And no indication that the DPJ will be taking power in the midst of a recession if it wins next month. Based on the manifesto, it appears that the DPJ is unaware that one of the major tasks facing the Japanese government is to manage the transition from life as a manufacturing-centered economy exporting goods to American consumers to an economy that will have to take more from the world and become increasingly centered on providing services of one form or another. In other words, at least on this front, the DPJ seems to be hoping that the economy will simply sort itself out one way or another. This won't do. (I know from conversations with DPJ Diet members that they are aware that this is the party's blindspot — but they have done little to fix it.)

Consumer rights and human rights: This section is, along with the foreign policy section (see below) the shortest in the manifesto and it offers exactly what the section header suggests. The DPJ will strengthen consumer protection services and provide greater transparency regarding products, strengthen the disaster relief system (the theme of this section seems to be safety rather than rights per se), and create an external bureau of the cabinet office to deal with human rights violations (no, no more specification than that).

Foreign policy: Despite being the focus of considerable discussion in the weeks leading up to the release of the manifesto, the foreign policy section is remarkable mostly for its innocuousness. In part this is simply because the agenda has changed. In the DPJ's 2007 upper house election manifesto, for example, foreign policy proposal number one called for the withdrawal of the JSDF from Iraq, which has since been effected. The result is a vague proposal for "building a close, equal US-Japan alliance relationship," in which Japan plays a positive role. Interestingly, it includes a call for an FTA with the US that includes both trade and investment liberalization, although it may simply be the case that, given the obstacles in both countries facing a US-Japan FTA, including this promise costs the DPJ nothing and wins the party some esteem in the US. As noted in the press, the DPJ has also softened the language regarding the Status of Forces Agreement and the realignment of US Forces in Japan. In other words, these are boxes that can be checked simply be holding meetings with the US without necessarily delivering radical change. Given that the 2007 manifesto basically lambasted the LDP for ignoring the public in its bilateral realignment plans, this minimal pledge is a major change.

The manifesto's position on Asia policy, while not a departure from previous DPJ documents, suggests that the recent trend in Japan's Asia policy will continue: more EPAs and FTAs in the region, more cooperation with South Korea and China, and more regional multilateralism across the board, with very little in terms of specifics (APEC versus EAS, security multilateralism?, US in or on the sidelines, etc.). The rhetoric that has characterized earlier DPJ discussions of East Asia has been pared back; cooperation in East Asia is treated matter-of-factly than before. Its position on North Korea is indistinguishable from the mainstream LDP position: the DPJ condemns recent North Korean actions and will refuse to recognize North Korea as a nuclear power, will cooperate with the five parties to check North Korea's missile and WMD programs, will support maritime cargo inspections, and believes that it's imperative to bring the abductees home. (No word on how it intends to achieve the latter.) Regarding international roles for the JSDF, the DPJ says it will contribute to peacekeeping operations in a manner consistent with democratic rule, and it will "execute appropriate measures" for dealing with piracy, appropriate presumably meaning whatever compromise the DPJ can wrest from its likely coalition partners. Finally, it wants to take a lead in the process of reviewing the NPT and aspires to de-nuclearize Northeast Asia, proposals that should presumably be looked upon somewhat favorably by the Obama administration.

Constitution revision: Constitution revision does not get a section of its own, but is appended after the list of fifty-five policy proposals. Perhaps this is appropriate, because not surprisingly the DPJ does not actually have a proposal for constitution revision. Instead, it calls for a public discussion of what form the constitution should take and suggests that the DPJ's major principles are "popular sovereignty," "respect for fundamental human rights," and "pacifism" — whatever those mean. The DPJ is sending a clear statement by barring off constitution revision in its manifesto: the DPJ will have nothing to do with it so long as it is busy with more important matters.

And so concludes my review of the DPJ's 2009 general election manifesto. I think I've made clear that I certainly don't agree with all of it, that there are portions of it that are overly vague, crassly populist, inappropriately backwards looking, and so on. However, I do think that the DPJ plan is a step in the right direction, especially given the attention the party pays to administrative reform. That, not the various spending programs, is the heart and soul of this manifesto. Perhaps it is best to think of the spending programs as sweeteners to keep the public supportive while the party sets about the hard task of changing how Japan is governed. That's not to say that the DPJ isn't sincere in its support for its various programs, but rather that programs like its farm subsidies or child allowances have little to do with transforming Japanese governance and much to do with ensuring that the DPJ gets enough time to building a more Westminster-like system.

And I certainly think that Curzon at Coming Anarchy has it exactly wrong — or, if not wrong, then he misses the point. Yes, the DPJ will not be delivering drastic change on foreign policy, but then again, neither will the LDP if it wins. Regardless of who governs Japan, Japan's domestic circumstances and the shifting balance of power in the region mean that Japan is becoming a regional middle power whether by design or by default. The DPJ's humble proposals are not too great a departure from the position of Fukuda Yasuo, which I rather admired. But if we step back from the proposals in the section entitled "foreign policy" and look at the manifesto holistically, one could argue that this manifesto is entirely about Japan's position in the world, in that a confident, active Japanese foreign policy is simply unsustainable until the government makes significant progress at tackling the problems at home that plague the Japanese people, problems that grew ever worse while the LDP was busy "redefining" the alliance and building a beautiful country. If the DPJ lacks a clearly articulated foreign policy, blame the LDP for leaving it with such a burdensome domestic agenda that it has little choice but to preserve the status quo.

Perhaps I'm a DPJ apologist. But I would prefer to think of it as hoping for the best, without ignoring the party's shortcomings. Simply put, Japan needs change. Just look at how the LDP is campaigning. It still has no manifesto of its own. Its leaders' attacks revolve entirely around questioning whether the DPJ can deliver on its supposedly pie-in-the-sky promises. Its case for reelection is entirely negative — "Those guys will make Japan worse" — because it seems that even the LDP's leaders know that they don't have a positive case to make for their party. One party is offering a mostly articulated agenda and shows that it clearly appreciates how Japan has been misgoverned up until this point. The other party is offering...? It's entirely possible that the DPJ will fail. The obstacles are surely great enough. But I would rather identify how the DPJ might be able to succeed instead of throwing my hands in the air and declaring that Japan is doomed to bad government forever.

If that makes me an apologist, so be it.


Noah said...

Accordingly, the remainder of the section on regionalization is rounded out with proposals to revitalize regional economies that hinge on decisions made at the national level. This section includes the DPJ's plan to scrap the gasoline tax surcharge (and eventually turn automotive taxes into a climate change tax), its plan to make national expressways free of charge,

This under-the-radar proposal is much bigger that anyone thinks. Lower (highway) transport costs cause urbanization in developing economies, but in advanced economies promote regionalization and decentralization (e.g. the U.S. after the 70s).

Actually, this is a result of the "economic geography" theory of Krugman, Fujita, and Venables (for which the latter two were unfairly denied the Nobel!). When I was working in Japan, I edited a JETRO-written book in which Fujita Masahisa explained this effect. Hopefully, the fact that the DPJ is seeking to lower transport costs means that Dr. Fujita is advising them now, or at least that they're reading his stuff.

Noah said...

Follow-up on my last comment:

For the nerds among you, here is a link to the theory I was talking about.