Tokyo Notes

Noisy Mr. Silent

The People’s New Party continues to exert disproportionate influence over the DPJ.

The premature announcement this week of plans to scale back privatization reforms of the postal sector gave another impression of chaos in Prime Minister Yukio Hatoyama’s administration.

If the changes announced by postal reform minister Shizuka Kamei were enough to draw gasps, the later indication that the cabinet had yet to actually agree to all these changes despite their official unveiling once again cast doubt on the government’s ability to act with sufficient coordination.

Kamei announced that the government would maintain a veto-holding stake of more than a third in the main company to emerge from the latest plan, finally putting a brake on the privatization process launched by his nemesis, former Prime Minister Junichiro Koizumi.

While this was expected, Kamei’s plan to double the upper limits on individual deposits and insurance coverage immediately drew fire, not just from the opposition and the media, but from within the cabinet itself.

If one of the main reasons for privatizing the postal sector in the first place was to stop a perceived crowding out of the private sector, allowing the account holders to double the amount of savings they hold in the institution to 20 million yen does not just reverse this process–it actually represents a huge swing back in the other direction.

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Pursuing this line in its editorial on the matter, one of the main dailies the Asahi Shimbun pointed out that while the greater profits to be had by increasing these limits might help compensate for the bleak prospects for mail service profitability, the larger deposits would end up being used to buy more government bonds rather than going to the private sector.

Meanwhile the more conservative Yomiuri Shimbun poured scorn on the ruling Democratic Party of Japan by reminding readers that back in 2005, the DPJ had actually called for the deposit limit to be halved to 5 million yen.
But when cabinet members such as national strategy minister Yoshito Sengoku also cast doubt on the plans, indicating there had been a lack of discussion by the cabinet, another blow was dealt to the credibility of the current administration.

That Kamei should be at the centre of all the fuss should come as no surprise. A former stalwart of the Liberal Democratic Party, Kamei took on Koizumi for the leadership of that party in 2003 and lost. When Koizumi called a snap election over privatizing the postal sector, Kamei and a group of ‘postal rebels’ left the party and formed their own party opposing the reforms called the People’s New Party. It could equally have been named the Authentic LDP, with its ‘small c’ conservatism and Keynesian-tinged economic ideas that contrasted with the neo-liberal market fundamentalism of Koizumi.

While Kamei’s first name suggests a ‘fragrant silence’ in Japanese, the man himself is never short of a word to say. In fact since the DPJ-led government was formed in September he’s been noisy on loan payment moratoriums, stimulus measures, the Futenma airstrip relocation issue, foreign voting rights and the Bank of Japan’s efforts to curb deflation. All this despite the fact the junior coalition party he leads has only three members in the lower house.

But it’s in the upper house where his party’s five members played a critical role in helping the DPJ block legislation before the party’s sweeping general election victory last year. Should the DPJ secure a majority in the upper house in this summer’s election, the need to accommodate Kamei and his party would essentially disappear, putting an end to the exaggerated political sway the People’s New Party currently enjoys.

No wonder then that Kamei is continuing to make some noise to strengthen the identity of his party for those elections in the hope that he can carve out a similar pivotal coalition role rather than be exiled to the political wilderness.