Thursday 13 November 2014

Politics in Japan: Snapping to attention

Nguồn tin: nguontinviet.com


THE prime minister, Shinzo Abe, says he has not yet decided whether or not to dissolve the Diet’s lower house and call a snap general election. But why should he even think of doing so? The most popular Japanese prime minister in recent memory, he has a mandate for reform and the coalition led by his Liberal Democratic Party has a powerful majority. With the lower-house term running till late 2016, he does not need to go to the polls. Yet rumours are rife that Mr Abe will call an election for December.


His advisers say that a decision could come as early as next week, soon after the release on November 17th of GDP figures for the third quarter. One motivation for a snap poll might be that Mr Abe’s still high popularity is starting to slide. But the chief one could be to gain public backing to postpone a planned rise in the unpopular consumption (value-added) tax, from 8% to 10%, next October. A first rise, from 5% to 8% in April, knocked the economy sideways, mocking Mr Abe’s promises to end deflation at long last and restore growth to Japan’s stuttering economy.


Formally, Mr Abe does not need an election in order to postpone the tax rise; the decision is his alone to make. Despite this, and the evidence suggesting the economy might not readily stand a second tax rise, postponing it would be tricky. The LDP would need to pass new legislation. The Democratic Party of Japan (DPJ)—which enacted legislation for the rise when it was in power in 2012, in a noble bid to control Japan’s ballooning public debt—would lambast the government for retreating. Big business and senior bureaucrats also oppose postponing a tax rise that the whole establishment came together to back.


Most concerned of all would be the Bank of Japan. On October 31st it launched a surprise expansion of its radical monetary easing when it looked like it would miss its inflation target of 2% by next year. The central-bank governor, Haruhiko Kuroda, was formerly at the Ministry of Finance, where raising the tax to bring the country’s finances back onto the path of rectitude is a quasi-religious tenet; and he may have calculated that his monetary easing gave Mr Abe the leeway to raise the tax. An ally of Mr Kuroda’s said that if Mr Abe delayed, he would lose credibility over dealing with a gross national debt that stands at over 240% of GDP.


The opposition’s deep disarray also provides an opportunity for the ruling coalition. It might even hope to hold on to its big haul in 2012 of 325 out of 480 seats. For all that they enjoyed the government’s embarrassments over scandals afflicting some members of the cabinet in recent weeks, lawmakers in the DPJ and other opposition parties are ill-prepared for a sudden election.


But what of Mr Abe’s professed determination to improve the labour market and open up closed sectors of the economy? The energies needed for a snap election might divert attention from such structural reforms. For a man with a mandate to seek a fresh one would certainly be novel. It might re-energise the reform agenda. The risk is that some plans to boost growth in the long run, promised but already overdue, remain in the starting blocks.





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