Hatoyama's resignation and trust crisis faced by the DPJ-led ruling coalition in Japan will have wider impact

Japanese Prime Minister Yukio Hatoyama's abrupt resignation Wednesday has plunged Japan into a fresh political crisis.

Hatoyama's brief reign will likely result in political turbulence in the island nation, especially since the former PM had failed to deliver on many of his promised political and diplomatic policies.

After a resounding election victory over the ruling Liberal Democratic Party (LDP) in late August, Hatoyama's Democratic Party of Japan (DPJ)-led coalition government had launched a campaign to radically change Japan's domestic policy and diplomacy, thereby freeing it from the decades-long grip of the previous LDP governments.

However, during his eight-month rule, the Stanford-educated Hatoyama failed to resolve many problems, which he had promised to address during his election campaign.

Instead, the escalating contradictions within the DPJ and its coalition partners over a series of domestic and diplomatic issues increased the pressure on Hatoyama's government.

After it came to power in mid-September, the DPJ-led government proposed to break away from the country's long-controversial decision-making system built on a rigid bureaucratic set-up and promoted the establishment of a new policy-making mechanism.

But the high proportion of first-time DPJ lawmakers made consensus and unified policy making difficult, as they lacked the required political experience.

The lack of a clear coordination and communication mechanism with Japan's bureaucracy directly curtailed the DPJ-led government's policy-making efficiency and capability.

This, together with Hatoyama's failure to come up with effective ways to revive the economy in the context of the global economic slowdown, angered the Japanese public.

The downbeat economy added impetus to Hatoyama's resignation.

Japan's economy has failed to claw back even one and a half-year since the global financial crisis took root.

Despite a series of policy measures adopted by the Hatoyama government, the unemployment rate still remains high, and the potential jobless rate is also on the rise.

Compared with other developed nations where a large-scale tax reduction campaign was launched, Japanese enterprises faced heavy tax burden.

The DPJ's policy of giving labor unions a larger say increased enterprises' production cost.

As a result, a number of key Japanese enterprises transferred part of their business to other countries pursuing more development opportunities. This led to the outflow of domestic capital and choked local manufacturing.

In addition, an ageing population, which needed additional social security funding, also became a growing fiscal burden on the Hatoyama government.

The fact that current Japanese government debt is two times its gross domestic product means its long-running expansive financial policy cannot be continued.

During its election campaign, the DPJ promised voters subsidies for child-bearing, education and agriculture and vowed to promote a toll-free expressway policy.

However, failure to fulfill these promises led to public distrust of the DPJ.

Over the past months, Hatoyama's approval ratings slid to 20 percent from a record 70 percent.

A political funding scandal involving Hatoyama and other senior DPJ officials also tainted the DPJ's image as a clean political outfit.

This, together with the complicated political situation arising out of the upcoming elections to parliament's upper house and contradictions within the coalition government made the political landscape look bleak for the Hatoyama government.

Hatoyama's rapid fall from grace was also driven by the festering dispute over a US airbase on Okinawa island, an issue that strained ties with the United States, Tokyo's long-time ally.

Hatoyama had called for the US-Japanese relationship to evolve on an equal footing, which, together with his efforts to trumpet and push for a closer East Asian Community, alienated Washington.

Hatoyama promised to move the US base off Okinawa to ease the burden on locals who have long complained of aircraft noise, pollution and crime associated with a heavy American military presence since World War II.

However, after failing to find an alternative location for the base, the Japanese prime minister backtracked and decided to keep it on the island, enraging Okinawans and his pacifist coalition partners, the Social Democrats.

The left-leaning group quit Hatoyama's three-party coalition Sunday, weakening the government in parliament's upper house ahead of elections for the chamber expected on July 11, in which the DPJ expects to take a beating.

Global economic turbulence and political instability are not expected to reduce in the post-crisis era. This is particularly the case in East Asia.

As the largest economy in Asia, Japan's political stability and economic recovery will directly determine the larger economic, political and security environment across the whole region.

The author is a researcher with the China Institutes of Contemporary International Relations.

(China Daily 06/04/2010 page8)