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Center for Strategic and International Studies Press Center for Strategic and International Studies Press Conference Call Subject: Japan Election Experts: Michael J. Green, Senior Vice President for Asia, CSIS; Japan Chair, CSIS Nicholas Szechenyi, Deputy Director and Senior Fellow, Japan Chair, CSIS Moderator: Sofie Kodner, Media Relations Coordinator, CSIS Time: 11:30 a.m. EDT Date: Thursday, October 19, 2017 Transcript By Superior Transcriptions LLC www.superiortranscriptions.com SOFIE KODNER: Hi, everyone. Welcome to our press conference call ahead of the Japan election, which will take place in just a few days, on Sunday, October 22nd. We appreciate you taking the time to join us, and thank you to our AT&T operators for their assistance. I’m Sofie, the media relations coordinator. And as a reminder, this call is being recorded, and a transcript will be available and disseminated later today. Dr. Michael Green, our CSIS vice president for Asia and Japan Chair, is with us today by phone. And here with me at CSIS we have Nick Szechenyi, deputy director and senior fellow with the CSIS Japan Chair. Dr. Green will present his remarks, Nick will follow, and then we will open up to Q&A. So, without further delay, I turn the conference over to Dr. Green. MICHAEL J. GREEN: Thank you, Sofie. Thank you for joining the call. Nick and I thought it would be a good idea to give people an opportunity to quiz us on this election. We probably have some people on the call who are experienced political reporters from Japan and some who are not, so we thought we’d open up with some broad comments about the background to this October 22nd election and what’s at stake in terms of Japanese policy and politics, and also what it will mean for U.S.-Japan relations and President Trump’s upcoming visit to Japan in early November. The election was called by Prime Minister Abe because he was seeing internal LDP polling that was showing the LDP had a very good chance of keeping its supermajority – of losing few, if any seats. And he also saw an opportunity to do a preemptive strike and dissolve the Diet before Tokyo Governor Koike – Koike Yuriko – could form a party and challenge the LDP. And he could see clearly that the Democratic Party in Japan, the main challenger, was in disarray and internally divided. So he called the election, and then, as many of you would know, was caught off-guard when Koike worked with Maehara Seiji to start to pull together a brand-new party where she didn’t have one and actually form a threat to the LDP. And that, of course, was her Kibo no To, the Party of Hope. The DP split, and the left wing of the party created the Constitutional Democratic Party under former Chief Cabinet Secretary Yukio Edano. But the formation of a – of a new party out of – out of scratch came as a surprise, a shock to the LDP, as did polling that showed the LDP was not as popular going into the election as their own internal polling had shown. And I think the reason for that was that I worked for the Iwate Nippo covering local politics in Iwate, as did Nick, some decades ago. And the LDP polling is based on door-to-door surveys that are reliable when you ask who would you vote for if we had an election. But actually dissolving the Diet for convenience clearly struck the media and the public as too cynical, too almost arrogant, by the government. And that hurt their polling badly. So suddenly there was a real sense of crisis. That has abated. And the polling and the obvious disarray of the opposition, the fact that RENGO, the main institutional supporter for the opposition parties, the labor-union confederation, is backing no party but only individuals. All of that has created a higher level of confidence in the LDP and their partners, Komeito, that, if polls are right, they could retain, between them and their coalition, two-thirds majority. And that would certainly keep Mr. Abe in place. About 20 percent of voters remain undecided. That’s actually quite low compared to recent history in Japanese politics. And certainly, after the Brexit vote in the U.K. or the presidential election in the U.S. last year, the Japanese saying is “issun saki wa yami” – one step ahead is darkness – you can’t make any prediction with confidence anymore about elections. But it certainly seems that the coalition will stay in power and that they have a, I think, better than 50/50 chance of retaining two- thirds majority, which would add much greater stability. In terms of the issues at stake, the prime minister and the government called the election based on the need to reconfirm the government’s position as the leading party and coalition that can defend Japan against the North Korean threat, to keep Abenomics and economic strategies moving forward, and to address the constitution and also consumption-tax increase. But in a way, it was an election about nothing. It was mainly about the Abe government trying to lock in its position before it has to dissolve the Diet so that it can have a stable government, and with success get Prime Minister Abe reelected as president of the LDP in September and rule until after the Tokyo Olympics, until 2021. But to the extent those policy – the issues I mentioned were those issues, the opposition, the new Party of Hope of Governor Koike, you know, has been struggling to define its difference. Of course, Koike was the national security adviser to Prime Minister Abe when he was prime minister the first time, in 2006 and ’07. And so they’ve been trying to distinguish themselves from the LDP, and have done so by taking a somewhat more populist position on some issues from the government; for example, supporting the U.S.-Japan alliance but calling for a revision of the status-of-forces agreement, SOFA, which is always convenient because, you know, from the U.S. perspective, the alliance only works if we have a good SOFA agreement. But the SOFA agreement is often unpopular in Japan. So saying I agree with the alliance but we need to renegotiate the SOFA, the status-of-forces agreement, is one way to criticize the government without attacking the alliance. That was similar to the position the DPJ took in 2009 when they were trying to challenge the LDP. The Party of Hope has also contested the consumption-tax increase, which is somewhat unpopular, and nuclear power, which is somewhat unpopular, so has taken positions that are held by the government, seen as necessary for security or economic growth, but difficult and unpopular and without a national consensus. And the Kibo no To, the Party of Hope, has tried to distinguish itself. If the – if the Abe government loses, if there are significant losses – and in many ways the media, combined with the politicians, will try to define what is that line that’s considered a loss, even if the government maintains its majority. And if the line is 30 to 40 seats, which seems like an unlikely number of seats for the LDP to lose, but if that’s it and that’s the general sense in the media and among the politicians. And if the seats fall, the LDP falls that far, and Prime Minister Abe is forced out, probably for another LDP politician – I mean, Mr. Ishiba who – a former defense minister, or Kishida, the former foreign minister, or maybe Noda Seiko, currently the interior minister. If one of them comes forward, the impact will be significant. I think from the U.S.-Japan perspective, while none of these politicians has a dramatically different view from Prime Minister Abe on the security relationship, North Korea, China or the economy, there would nevertheless be concerns about how stable the Japanese government would be, and memories of the DPJ years, but also the LDP years before that, when you had a different prime minister every year and it was extremely difficult to make progress on defense issues, on trade issues. And confidence in Japan sagged in the U.S. Congress and in public opinion polls. There would be some concerns about three issues that are important to institutional investors, Wall Street, the Treasury Department, outside observers, and stakeholders in Japan’s economic growth. And the issues that would be shaken, even if the opposition party didn’t come to power, would be, number one, what would happen to Governor Kuroda of the Bank of Japan? What’s what a lot of institutional investors, financial investors would wonder about. What would happen to interest rate policy? What would happen to Abenomics? That could have a major effect. Second issue people would question is what will happen to energy prices in Japan if nuclear power – if the government loses, would nuclear power be an even bigger trouble in Japan? And that would raise questions about the attractiveness of Japan for foreign direct investment, for manufacturing, for economic growth. And number three, the consumption tax. Would the consumption tax raise, even with the government’s proposal to spend half of it on social welfare, would it become too hard to do? So those are three questions people would have on specific economic policies if the election forced the prime minister to resign. But the much more likely scenario is that the LDP and Komeito hold on to a strong majority.
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