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Japan PM Aso dissolves lower house, risks historic defeat

(Agencies)
Updated: 2009-07-21 13:41

TOKYO: Japanese Prime Minister Taro Aso dissolved parliament's lower house on Tuesday for an election on August 30 and vowed to restore voters' faith in his fractious ruling party, which polls show is in danger of a historic defeat.

A victory by the opposition Democratic Party of Japan would end more than 50 years of near-unbroken rule by the conservative Liberal Democratic Party and raise the chances of breaking a deadlock caused by a divided parliament that has stymied policy implementation as Japan struggles to emerge from recession.

Japan's Prime Minister Taro Aso answers a reporter's question at his official residence in Tokyo July 17, 2009. [Agencies]

It would also usher in a government pledging to pay more heed to consumers than companies, to wrest control of policy from bureaucrats to cut waste, and to adopt a diplomatic stance less subservient to close ally the United States.

"This is a major, revolutionary election to allow politicians to take the lead in Japanese government," Democratic Party leader Yukio Hatoyama told party members.

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"We should face it with a sense of historic mission."

Many investors in Japanese financial markets would welcome an end to the prolonged political stalemate, but some analysts worry that the Democrats' spending plans will inflate an already huge public debt and push up government bond prices.

"I think that for the short-term, hope that the Democrats taking power will cure the parliamentary paralysis and lead to smooth passage of bills and policies will outweigh any worries about uncertainty," said Noritsugu Hirakawa, a strategist at Okasan Securities.

"Over the longer term, there's questions about how the Democrats will fund all their social programs, and this may eventually weigh on the market."

A spate of opinion polls show the Democrats well ahead of Aso's LDP among voters, though close to 30 percent are still undecided.

PARTY CHAOS

Aso's announcement of his election plan last week -- one day after the LDP was trounced in a closely watched Tokyo assembly poll -- sparked chaos in the LDP, with critics trying to oust him from the top party post.

Party heavyweights blocked the move, but agreed Aso should appear at a meeting of LDP lawmakers to hear their complaints.

In remarks carried live on nationwide TV, Aso apologized for his failings and admitted that the party's internal chaos had contributed to recent local election losses.

"I am firmly resolved that we will sincerely accept the people's feelings, will and criticism and start afresh," he said, vowing to stay in his post until the economy recovered.

All cabinet members, including Finance Minister Kaoru Yosano, who some had earlier speculated might refuse, signed off on the election plan on Tuesday, Health Minister Yoichi Masuzoe said.

LDP lawmakers stifled their criticism of Aso as they turned their attention to the tough election fight ahead.

"At this point we have no choice but to be united before the election," upper house lawmaker Hiroshige Seko told reporters.

Aso, the 68-year-old grandson of a prime minister, took office last September and has seen voter support slide due to policy flip-flops, gaffes and scandals.

The Democrats have had their own troubles, with one leader forced to resign in May after a fundraising scandal ensnared a close aide and current party chief Hatoyama under fire after admitting some people listed as his political donors were dead.

Many voters are fed up with the LDP, but have only muted hopes for the Democrats.

"I think we need a change in government at least once. But I don't think there is a huge difference between the LDP and the Democratic Party," said 48-yearold businessman Tamio Harakawa.

The LDP has made clear that it will target Hatoyama's funding affair while attacking the Democrats, an amalgam of former LDP members, ex-socialists and younger conservatives, as weak on security policy and irresponsible on finances.

Yosano accused the opposition of being over-confident. "The Democrats seem to be already toasting with champagne and wine as if they were on the eve of a victory," he told reporters.

Aso was also scheduled to give a news conference later in the day. The prime minister may have in mind a news conference by the charismatic Junichiro Koizumi when he called an election in 2005.

Despite early predictions that the LDP would fare badly, Koizumi electrified voters and led the party to a huge victory.