Power to change hands in Japan elections

The coming elections in Japan scheduled on 30th August promise to change altogether the economic and political landscape of the country and yet setting it on a varied future course.Poll surveys conducted by the Yomiuri Shimbun,Japan’s largest selling newspaper indicate 41 percent vote for the Democratic Party of Japan against 24 percent for the Liberal Democratic Party that has heitherto continuously governed the country since 1955 interrupted only by a spell of 10 months.


Liberal Democratic party currently led by Prime Minister Tara Aso is not viewed favourably by the voter particularly because of his long-term approaches in matters intended to allievate the plight of the people and also since during his party’s last years Japan suffered a prolonged economic stagnation running two decades followed by current recession.This has had a telling effect on the demographics and economic attitude of the Japanese population that turned thrifty and resorted to high saving attitude. Resultantly private savings soared extraordinarily while government debit to fund the spendings mounted alarmingly.As another adverse effect people started postponing marriages and restricting the size of families and now the country is beset with the problem of an ageing and shrinking population with bulk of population in the old age group of past 65 years and fewer people in the younger age group upto 15 years of age.This makes the prospect of economic recovery even more bleak .The world’s second largest economy of Japan therefore finds itself in dire straits.Japan’s utter dependence on other countries for economic performance obliges it to make huge contribution to the International Monetary Fund and dole out huge amounts in the shape of financial stimulus at International and domestic levels.
Tara Aso’s manifesto centres round proactively upholding the global financial and economic order as, according to him, Japan is heavily dependant on other countries for supply of food,resources and energy as well as for markets.He thus talks of a long-term approach “to find social security and low birth rate”after the economic situation improves.Such far off measures to be implemented in distant future do not carry conviction with the people who seem to be yearning for bold and short term innovative solutions.


Hatoyama leading the opposition party Democartic Party of Japan on the other hand pledges for lower corporate and gasoline taxes, raise child support and tuition aid as well as eliminate highway tolls. This spending may push up bond yields and the Yen.Barclays PIC and Morgan Stanley also subscribe to the concept of increased consumer spending “sustainably bolstering economic growth” that apparently inspires voters as reflected in poll surveys. The prospects of Democratic Party of Japan wining the elections have already created positive effects in the economy.
While DPJ stress on increasing welfare outlays may win over older voters who account for a fifth of population the voters are disenchanted by cabinet scandals and divisions within the Aso’s party that have already led to five straight defeats in local elections.

Updated : Thursday, 27 Aug 2009, 15:25 [IST]