July 25, 2011 How Kan Will Step Down: Naoto Kan’s Resignation and New Developments in Japanese Politics Kiyoaki Aburaki An Extraordinary Situation The vague resignation announcement of Prime Minister Naoto Kan on June 2—in which he signaled his intention to step down but offered no timeline—was unlikely a surprise for many in Japan and the United States. The announcement was simply part of a natural progression created by Kan’s weak political position within the ruling Democratic Party of Japan (DPJ) and the recent criticism of his mismanagement of the government’s response to the 3/11 disasters. What is surprising, however, is how tenaciously he has been holding on to his position since that announcement. Kan is probably the first Japanese prime minister to announce his resignation but then reject strident calls for him to step down. In this respect, Kan is extraordinary. Japan as a whole, however, is experiencing a much more extraordinary situation. Japan has suffered terribly because of the triple disasters: the earthquake and tsunami, which struck with a severity seen once every thousand years, and the nuclear accident unlike any ever experienced. On top of the physical destruction, Japan is also facing a summer plagued by the risk of power shortages. The risk is so dire that many, including corporations, have taken substantial steps to alleviate the situation. Toyota, for example, has shifted weekly holidays at manufacturing plants from weekends to Thursdays and Fridays to reduce electricity demand on weekdays. The Fukushima accident has created a strong desire in the Japanese public to decrease Japan’s reliance on nuclear power, but unfortunately, Japan seems to have no effective alternatives. Many CEOs will seriously consider shifting domestic production overseas if concerns about power shortages remain. The triple disasters presented multiple challenges that command the government’s attention, but political paralysis is hindering the response. Kan’s Lost Mandate Common sense would indicate that the clear and pressing need for reconstruction from the disasters should provide a solid basis for collaboration between the ruling and opposition parties for mapping out and implementing recovery plans. The reality is quite different. The DPJ and opposition Liberal Democratic Party (LDP) only seem capable of criticizing each other and are incapable of having constructive discussions or producing results. Prime Minister Kan said on June 2 that he would resign as soon as a certain level of progress was made in Japan’s recovery. His statement is proof that he is relevant to only a limited number of tasks, which are immediate in nature. Everyone in the Diet, except perhaps for Kan himself, interpreted this statement as such. This apparent promise allowed Kan to survive a no-confidence vote that day, but caused him and his government to completely lose the political mandate necessary for achieving recovery and restoration. Kan’s stance since then, however, would suggest he does not agree with this pessimistic analysis. The prime minister’s apparent thinking differs substantially from that of the majority of the Japanese public. The public does not expect Kan to play a large role in Japan’s recovery. A recent poll conducted by Yomiuri shows that 72 percent of respondents think Kan should resign by the end of August. 1 The Reconstruction Design Council, an advisory panel established by the Kan government, produced a report in June with recommendations. The report did not offer concrete plans for recovery, but this is of no consequence for Kan, who himself admitted his tasks do not include achieving restoration. Even though Kan is trying to set the course for recovery and future growth by, for 1 “72% want Kan out by end of Aug,” Yomiuri Shimbun, July 5, 2011, http://www.yomiuri.co.jp/dy/national/T110704004666.htm. example, proposing integrated reforms of the social security and tax systems, polls suggest most Japanese people believe this is not Kan’s job. In late June, the prime minister spelled out three conditions for his resignation, which included the passage of the second supplementary budget and a bill authorizing the sale of special government bonds. The third condition is controversial: the enactment of the renewable energy bill. The bill automatically forces electric utility companies to purchase all electricity generated by renewable energy sources. This will certainly result in higher energy costs and would affect the public’s daily life and damage Japan’s industrial competitiveness. The only winners from this bill are renewable energy generators, and their gains would come at high cost to the public and industry. The bill could also stifle innovation in clean technology because renewable energy generators would end up facing little competitive pressure. More fundamentally, the renewable energy bill assumes the current structure of the electricity industry will remain unchanged, when in reality Japan needs to configure a new industrial structure using lessons learned from the 3/11 disasters. The 10 regional electricity networks need to be more mutually integrated to serve as effective backup systems for each other. Intraregional networks should also be transformed to multiple or multilayer systems to the same end. Furthermore, the new electricity system should be configured to accommodate renewable energy penetration. Smart grid technologies and micro grids can possibly provide sustainable incentives for investments in renewable energy. The restructuring of Japan’s electricity network must be done in a competitive environment and funded with private investment, not taxpayer money. The restructuring is also necessary to effectively promote innovation in clean technology. In this sense, Japan needs strategic, comprehensive, and cool-headed discussions regarding the future of Japan’s electricity industry, which will lead to optimal structures of generation, transmission, and distribution of electricity. Since this is not Kan’s agenda, the outgoing prime minister should not leave an undesirable footprint. Another No-Confidence Vote It is a long-standing custom within the Diet that only one no-confidence vote is permitted per session. Members of the LDP, however, threaten to submit another vote of no-confidence. Though this unconventional action could be justified by the extraordinary behavior of Prime Minister Kan, it contains two important risks. First, if a no-confidence vote is adopted, Kan, who politically will be brought to bay, might dissolve the Diet and focus the ensuing general election on the issue of nuclear power. This is a worst-case scenario for Japan. An intelligent debate about nuclear energy can only take place after a detailed and rational analysis of the disaster at the Fukushima Daiichi nuclear power plant. Politicizing the nuclear energy issue without a reasonable discussion of Japan’s options for energy production would not help the public make informed choices and could also have a negative impact globally. Another risk is that the Japanese public, especially victims of the disasters, would be completely dumbfounded by the political discord. Public confidence in Japanese politics will be seriously damaged if the political struggle caused by a second no-confidence vote is viewed simply as a power game. Even today, many in Japan have already been stunned by the actions of Nagatachō or Japanese politicians. For example, a resident in Iwate prefecture said politicians couldn’t think about the stricken area because “they live only in the Diet.” 2 Moreover, the newly appointed reconstruction minister resigned in early July after serving for just one week because of several gaffes. A further loss of the public confidence is not important for Kan, but would be very dangerous for future leaders of Japan who need to win public support in order to achieve the recovery and restoration of Japan. Expected Political Dysfunction Many in the DPJ are trying to put a period on the Kan government. However, the party members, especially its senior leaders, are cautious about putting a new government into place. Secretary General Katsuya Okada of the DPJ, for example, said the party would have its presidential race in the first half of August, but it has yet to show any direct actions that would make this schedule a reality. Yoshito Sengoku, the powerful deputy chief cabinet secretary, publicly implied that he demanded Kan’s early resignation but did not take any apparent political steps to meet this demand. Their discretion probably stems partly from their belief in Kan’s vague promise to step down and partly from their understanding of their responsibility as the governing party. The latter sentiment is apparent in a recent comment made by Finance Minister 3 Yoshihiko Noda when he said, “As a member of [the] Kan government, I cannot talk about [the] next government.” 2 “Fukko no Medo, Itsu” [When will we have a prospect of recovery], Asahi Shimbun, June 3, 2011, p. 38. 3 “Posuto-Kan no Gunzo” [A crowd aiming at “Post-Kan”], Sankei Shimbun, July 18, 2011, p. 5, http://sankei.jp.msn.com/politics/ Their caution, however, will not prove beneficial for Japan, especially for victims of Tohoku, because political disorder is getting worse the longer Kan stays in power. Even today, more politicians are becoming increasingly anxious about Kan’s true intentions. This unease is caused by the unveiling of additional agendas by Kan and his apparent determination to make them reality. For example, on July 12 when Kan declared a vision for Japan’s future without nuclear energy, other party leaders and cabinet ministers apparently showed their disagreement with him. Secretary General Okada said, “The prime minister’s policy contained absolutely nothing that has been discussed within the party.”4 Minister for Economy, Trade, and Industry Banri Kaieda recently said in the Diet that the he shares Kan’s view on nuclear power only to the extent of lighter than a “feather.”5 Usually, this level of cabinet disunity would lead to a prime minister’s resignation.