Ozawa Lurks in Japan's Power Struggle

By Todd Crowell

TOKYO - The return of Japan’s “shadow shogun,” Ichiro Ozawa, from apparent political oblivion following his acquittal last Friday on charges that he conspired with former aides to make false financial statements on his personal political fund will test Prime Minister Yoshihiko Noda’s political – or more accurately, survival – skills to the limit.

Ozawa's acquittal allows him to officially return to the Democratic Party of Japan (DPJ), from which he was suspended in January after he was formally indicted, and to challenge Noda for the leadership of the party this September. If not directly confronting Noda for the leadership, then Ozawa could immeasurably complicate Noda’s efforts to help fix Japan's gaping fiscal problems. 

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It should be emphasized that Ozawa was, until his suspension, a member of Noda’s own party. Indeed he was president of the Democratic Party of Japan (DPJ) and would have been prime minister (and given his tenacity and political skill probably still prime minister). Instead he was forced to resign only four months before the historic 2009 election brought an opposition party to power for the first time since the end of World War II.

Yet Ozawa often seems, and in fact maneuvers, as if he, not Liberal Democratic Party leader Sadakazu Tanigaki, is really the leader of the of the opposition - an opposition within the governing party. Indeed, it is assumed he can call on the support of about 100 of the DPJ’s 292 members of the House of Representatives, where Noda’s party enjoys an overwhelming majority, at least on paper.

Noda is entirely focused on raising taxes, virtually to the exclusion of all other matters, including, for example, restarting of nuclear power plants idled following the March 11, 2011 earthquake and tsunami, or joining the Trans Pacific (trade) Partnership. It is assumed that should the tax bills be defeated in parliament, he will be forced to resign or possibly call a general election.

It hardy needs saying that even before Ozawa re-returned to muddle the picture, raising taxes was a delicate and not very popular thing to do. Shortly after Naoto Kan became the second DPJ premier, he proposed a similar tax increase and found his party losing control of the upper house of parliament. His administration never really recovered.

Ozawa opposes raising the consumption tax and many of his followers in the Diet also oppose the tax rise and may vote against their own government on this issue. For one thing, the party’s 2009 election manifesto opposed raising the national sales tax during the first administration. It is one of many planks that the Democratic Party has had to abandon once it achieved power.

In early April the government introduced bills to raise the national sales tax from five to ten percent by 2015, with the proceeds going to shore up social security, which is suffering the usual problem of declining revenues and growing enrollments as the overall population of Japan ages. Moreover, at present roughly half of the national budget is now covered entirely by borrowing.

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Todd Crowell covered Tiananmen as Chief of Correspondents for Asiaweek. He is compiling a Dictionary of the Modern Asian Language and comments on Asian affairs at Asia Cable (www.asiacable.blogspot.com).
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