Yesterday we saw that the critical moment has arrived for the key element of Prime Minister Koizumi’s reform program, as the bill to fully privatize Japan’s postal system and its savings and insurance programs is now being debated by the Upper House of the Diet.

This measure, one of the most ambitious governmental reform programs in modern times in any country, passed the Lower House by just five votes after 37 members of his own Liberal Democratic Party voted against him and another 14 abstained by walking out in protest before the vote.

Mr. Koizumi’s margin is much slimmer in the Upper House. That body has 242 members, of which 138 belong to the LDP and their coalition partners, the New Komeito Party, while 103 are members of opposition parties or are independents. If 18 members of the ruling coalition bolt, the bill will be defeated. Some commentators in the English-language media have noted that the prime minister could resubmit the bill to the Lower House for passage if it’s defeated in the Upper House vote. That’s technically true, but they should have read Article 59 of the Japanese Constitution first, which requires a two-thirds majority for the bill to be enacted when submitted a second time. That won’t happen.

The prime minister’s original bill was more ambitious, but negotiations with Diet members resulted in compromises to ease its passage. The revised legislation has been criticized because it watered down the reforms, but that isn’t the reason for the intense opposition the prime minister faces both inside or outside the party. Indeed, public policy is a negligible factor in this debate. What are the real reasons? There are three, and they all boil down to the same thing: political interest.

Zoku Giin

The first reason is the zoku giin. This phrase translates to “tribal MPs”, and refers to members of the Diet who represent the interests of industry sectors and the related Cabinet ministries. This informal system was established by former Prime Minister Kakuei Tanaka (second photo) with the best of intentions—to have Diet members develop a specialized knowledge in governmental issues.

In practice, however, the system backfired. The MPs developed such close ties with each ministry that they began working for the interests of their ministry rather than the interests of the nation or its people. This article appeared in the Japan Times about disgraced Diet member Muneo Suzuki a few years ago. It explains:

“It is true that Suzuki has strong influence (over the Foreigh Ministry),” the official said. “But he is the only person we can depend on to protect our interests, as most other politicians are not interested in diplomacy that does not bring them either money or votes.”

In December 2000, when then LDP policy chief Shizuka Kamei urged the government to reduce ODA spending by 30 percent, Suzuki expressed strong opposition, the official said. As a result, the ODA budget for fiscal 2001 was only cut by 3 percent from the previous year.

Suzuki was also instrumental in protecting the ministry from planned downsizing, in which its ODA division would have been hived off, in 1997 when then Prime Minister Ryutaro Hashimoto drew up a plan to reorganize the bureaucracy.

Motohisa Furukawa, a former Finance Ministry official and now a member of the Democratic Party of Japan, said bureaucrats use politicians by having them represent the ministry’s opinion and interests.

Rallies by local community representatives, industry groups and politicians to promote, for example, road construction projects are usually arranged by land ministry bureaucrats, he said.

“Bureaucrats use influential politicians to secure budgetary allocations for their own projects, which at times lead to ‘proxy wars’ among ministries,” he added.

Furukawa said that from the point of view of a bureaucrat, zoku-giin lawmakers have more power and influence than Cabinet ministers — as in the case of Suzuki — who was even dubbed the shadow foreign minister.

Suzuki, incidentally, spent 436 days in jail—the second-longest prison term ever served by an active Japanese legislator.

But the important part of the quoted section notes that bureaucrats defend the zoku giin because they defend their interests. Give them credit for stating it baldly. Ask most people what the interests of a governmental bureaucracy are, and they will say it is to serve the public. The Japanese bureaucracy, however, has perverted the system and uses Diet members to maintain their budgets and enhance their status.

One of the strongest and most vocal opponents of postal reform in the Lower House was Seiko Noda—a former Minister of Posts and Telecommunications (third photo). Other reform opponents in the Diet were employed in the Ministry itself, such as Kensei Hasegawa, or zoku giin who look out for the “interests” of the postal bureaucracy.

Incidentally, the Japanese media seldom, if ever, identify the bureaucratic affiliation of Japanese politicians, which means that information is usually not available to the average citizen.

For the record, Prime Minister Koizumi is “usually identified with the interests of the Finance Ministry”, as the saying goes.

Reform Opponents

The second reason is the other LDP opponents of the postal reform measures who don’t care a fig one way or another about the issue itself, but who are foes of Koizumi and his efforts to reform the Japanese political system.

To understand the ruling LDP, it is perhaps best to ignore the cute cartoon it uses for its campaign posters and consider it an alliance of mini-parties, called factions. These formal groups within the party have their own organization, leaders, and—more importantly—their own fund-raising networks. When the LDP forms a government after an election, it is actually forming an internal coalition. The presidency of the LDP, and therefore the office of prime minister, is rotated among each of the faction leaders or important faction members to maintain internal harmony. (This practice is called tarai mawashi, or “balancing a spinning washtub”.) Cabinet posts are allocated in the same way.

Mr. Koizumi was elected with the votes of rank-and-file LDP members (the first time they were allowed to vote) not only because he promised governmental reform, but also because he promised LDP reform. His goal was to eliminate the factional system in Japanese politics. True to his word, he has, for the most part, ignored faction membership when selecting his Cabinet, awarding key positions to people he trusted instead of members of rival factions. Here’s more from the Japan Times article:

…(the) political system…obliges the Cabinet to seek the approval of the ruling parties for all government-sponsored bills before they are submitted to the Diet.

Government-proposed bills must be screened by the LDP’s so-called “zoku-giin” lawmakers, who represent the interests of particular industry sectors and related ministries, and are often revised in closed sessions of policy panels from the LDP and the ruling alliance, leaving little room for further changes by the time they appear before the Diet for deliberations.

…Irritated by a time-consuming system that has put the brakes on his reform initiatives, Prime Minister Junichiro Koizumi instructed an LDP body last year to abolish the practice and unify the party’s policymaking functions with those of the Cabinet.

This is one of the primary reasons that Mr. Koizumi had huge public approval ratings after his selection—no one is more ready to see this system end than the Japanese public. And that means that no one is more willing to topple Mr.Koizumi than the politicians who have benefited the most from the faction system in the past.

The old guard didn’t want Koizumi to begin with, and only put up with him because his personal popularity revived the party’s flagging fortunes. That particular honeymoon was very brief, however, lasting for just a few days until the new prime minister ignored factional considerations when selecting his first Cabinet.

It will come as no surprise that the other LDP group most opposed to the Koizumi reforms are those affiliated with the faction of former Prime Minister Ryutaro Hashimoto (fourth photo). His faction has the most Diet members of any in the LDP and is the successor to the granddaddy Boss Tweed of postwar Japanese politics, Kakuei Tanaka. This faction is considered to be the most conservative from the perspective of party politics and the party’s ties to the bureaucracy. In fact, when Hashimoto served as prime minister, his own reform proposals were unsuccessful because he was unwilling to confront the opposition from the entrenched special interests.

One of the primary opponents to the postal privatization reform legislation in the Upper House is Mikio Aoki—the head of the Hashimoto faction in that body.

Of the 138 LDP members of the Upper House, only 17 are not affiliated with a faction.

Again, the Japanese media seldom mention a politician’s factional membership in their news reports, unless the story concerns the factions themselves.

Opposition Parties

In Western countries, it is not unusual for party members to cross the aisle on specific issues and vote with the opposition when they are in accord with legislation (or it benefits their interests). This almost never happens in Japan. Perhaps it is due to the age-old Japanese tradition of acting in a group instead of acting as an individual, but the opposition parties take the term literally. They oppose, and do little more. In Great Britain, opposition parties form a shadow Cabinet, but that seems to be beyond the ability of the Japanese opposition parties.

That’s why these parties will continue to vote en bloc against the privatization bill, even though there are surely a few members who privately would like to see it pass.

The primary opposition party at present is the Democratic Party of Japan, which has done little to cover themselves in glory during the current debate. Rather than conduct negotiations to rework the privatization legislation in the Diet to incorporate their own ideas, they just walked out of the deliberations. One of their biggest complaints during the Lower House debate was that the government failed to use the proper procedures when contracting the printing of leaflets to publicize the merits of privatization.

Mr. Koizumi has often been criticized for his attitude toward the opposition parties during policy debates in the Diet, and this is a valid criticism—he can be abrupt, flippant, and dismissive. Considering the personalities and tactics of the opposition parties, however, it’s not difficult to sympathize with his attitude.

I listened to part of the radio broadcast of the formal questioning of the prime minister and his Cabinet this week in the Upper House about the privatization measures. Every one of the opposition party members came across like a teenager over-emoting in a senior class dramatization of Mr. Smith Goes to Washington. The content of their questions wasn’t much better. One of the questioners was upset that the privatization of Japan Post’s life insurance system would jeopardize a 10-minute physical exercise program broadcast for the past 70 years on NHK radio at 6:30 a.m.

Showdown

The current Upper House session will end on August 13th, and the fate of Koizumi’s postal reform bill—and perhaps the fate of his government and political and bureaucratic reform in Japan in the foreseeable future—will be determined by then. A vote could come as early as Friday, the 5th.

The prime minister is using a carrot and stick approach. The carrot is that he will increase the number of Upper House members in his Cabinet from two to three if the legislation passes. The stick is that he will dissolve the Lower House if the measure fails, which could well lead to the defeat of the LDP in the ensuing election, as well as the breakup of the LDP itself. In a sense, the prime minister is playing a sophisticated game of chicken to see who blinks first. He is counting on the instinct of most politicians to avoid political suicide.

The only problem is that in Japan, suicide is sometimes seen as an honorable option.

This analyst from Morgan Stanley thinks the measures will pass. Perhaps he is right, but he is overlooking one salient point. If only 18 members of the LDP cross the aisle to vote against Mr. Koizumi, the bill will be defeated. One diehard opponent of the legislation is LDP member Shizuka Kamei (fifth photo).

Kamei’s faction in the Upper House has 18 members.