Hashimoto, Ex-Partners OK Deal for Japan Government

Unable to form a new coalition government, the Liberal Democratic Party on Thursday struck a loose alliance with two smaller parties that virtually ensures Ryutaro Hashimoto will continue as Japan’s prime minister. But how effectively he can implement his conservative, pro-business policies as head of a minority government remained unclear.

The LDP scored sharp gains in the Oct. 20 parliamentary elections, jumping from 211 seats to 239 seats in the lower house but falling short of a 251-seat majority.

Unless Hashimoto manages to cobble together a stable coalition from the splintered, bickering conservative opposition, he remains trapped in an unhappy political marriage with his longtime ideological foes, the Social Democrats.

Under the agreement signed Thursday, the Social Democrats and New Party Harbinger will not accept Cabinet positions in a second Hashimoto government.

But the two former coalition partners will cooperate with the LDP on specific policy issues, including plans to reform the Ministry of Finance.

The powerful ministry has been under fire for mismanaging the banking industry and failing to prevent other damaging financial scandals.

As punishment, the three parties agreed to introduce a bill next year that would strip the Finance Ministry of its responsibility for overseeing and inspecting banks and give those powers to a separate watchdog agency.

The agreement also calls for other administrative reforms endorsed by almost every party in the election campaign: reducing the number of government ministries and agencies; monitoring the behavior of Japan’s semiautonomous civil servants; strengthening the independence of the Central Bank; and funding nursing care for the elderly.

In a face-saving concession to Social Democratic leader Takako Doi, who dropped her fierce opposition to a consumption tax, a committee will be set up to review the planned April increase of the tax from 3% to 5%.

Political analyst Minoru Morita said the agreement’s vague provisions for political reform are “meaningless.”

He said Hashimoto had picked an easy target in attacking the weakened Finance Ministry in order to shield from any real reform the bureaucracies that secure the LDP’s core political and financial base, including the ministries of agriculture, health and construction.

But Morita said Thursday’s bargain would give Hashimoto a “100% assurance” of being elected prime minister when the parliament opens Thursday.

“The only question now is whether it will be decided on the first or the second ballot,” he said. “I think it will be the second.”

But even if Hashimoto retains his post, Tomoaki Iwai, a professor at Tokiwa University in Ibaraki prefecture, predicted of the prime minister, the LDP: “This agreement [with the others] will be effective for about three months. The LDP can get through the Nov. 7 election of the prime minister, so that’s fine. But whether they can get through an ordinary [parliament] session is another matter. The LDP has to do everything possible to get . . . defectors and the independents to join up.”

However unenviable Hashimoto’s position appears, though, his rivals are in vastly worse shape.

His archrival, the opposition New Frontier Party, has narrowly avoided a split but remains plagued by defections.

His ally of convenience, the Social Democratic Party, won 15 seats in the new parliament and is too exhausted and divided to put up much of a fight.

The Social Democrats’ position in the upper house is also eroding, with at least three of the party’s 29 lawmakers there reportedly preparing to defect to the new Democratic Party of Japan, NHK television reported Thursday.

Analysts saw Thursday’s agreement as a chance for Hashimoto to buy more time to woo defectors and independents. Besides the LDP’s 239 seats, Hashimoto appears likely to secure the support of five independents led by New Frontier Party defector Hajime Funada. Together with the 15 votes from the Social Democrats and the two seats of the New Party Harbinger, the LDP could then count on a working majority of 261 votes.

To control the key finance committee chairmanship and other vital legislative posts, the ruling party needs about 265 seats.

Analysts predicted the LDP will not run into serious opposition until budget season begins in January--and Hashimoto may shore up his position by then.

John Neuffer, author of the “Behind the Screen” newsletter on Japanese politics, said the election has not changed the status quo.

While the LDP must continue to adjust its policies to accommodate the Social Democrats, he said, the Socialists know they could not survive another election and thus cannot pick a fight with the LDP that could bring down the government.

“So basically, it’s the same power dynamic as in the previous government,” Neuffer said.