The Return of Japan's Shadow Shogun

The return of Japan’s “shadow shogun”, Ichiro Ozawa, from apparent political oblivion following his acquittal on 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 gaping fiscal problems.

It should be emphasized that Ozawa was, until his suspension, a member of Noda’s own party. Indeed he was president of the 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 and not Liberal Democratic Party leader Sadakazu Tanigaki was real 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, the 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 hardly needs saying that even before Ozawa re-returned to muddle the picture, raising taxes would be 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. Many of his followers in the Diet also oppose the tax rise and may vote against their own government on the 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 5 to 10 percent by 2015, with the proceeds going to shore up social security, which is suffering the usual problen of declining revenues and growing enrolments as the overall population of Japan ages. Moreover, at present roughly half of the national budget is now covered entirely by borrowing.

However, Noda has one political ace up his sleeve. He has the sole power, in a parliamentary form of government, to call a general election. He can use this as a carrot to win over members of the opposition Liberal Democratic Party to his side. He can tease Ozawa supporters with the threat since most of them, being political novices, are insecure in their seats and fear defeat in any election.

Unlike the Republican Party in America, the LDP is not adamantly and ideologically against raising taxes. Many on the LDP benches believe that such an action is necessary and overdue to bring order to Japan’s burgeoning public debt (the largest in the world in relation to GDP). However, like the Republican Party it is totally committed to obstructionism.

Practically from Day One, the leader of the party, Tanigaki, has maneuvered to force another general election. He even promised to block bills authorizing the sale of more government bonds (sort of like the debt-raising ceiling matter in Washington) without the immediate prospect of another election. He backed off only after the deadly earthquake made such pure political opportunism unseemly.

On the other hand, the governing party has nothing to gain from an election in which they would undoubtedly lose seats, Many members of the enormous class of freshmen legislators in the national Diet are newcomers who toppled longtime LDP members and are not very secure in their constituencies. Noda can keep them in line with the prospect of their forcible return to civilian life.

Ozawa has long been a millstone around the necks of the Democratic Party leaders, a kind of man one can’t live with and can’t live without. He is something of a tactical electoral genius who was almost singled-handedly responsible for the party’s historic win three years ago. A large number of government MPs are people he personally recruited and groomed to run for office.

At the same time, he exudes the stench of corrupt “money politics” if not actual corruption, and that isn’t likely to change following his recent acquittal. Noda and the party leaders would love to use his electoral skills while keeping him well hidden from public view. Unfortunately for them, Ozawa is not content to remain in the shadows, evidently convinced he still has one more shot at the top job.

Few believe he can really pull it off. “Ozawa will never become prime minister,” says longtime American political observer Gerald Curtis. Nevertheless, Ichiro Ozawa is perhaps the most influential Japanese politician of the past 20 years. It was he who engineered the vote of no confidence in 1993 that brought down the government of Prime Minister Kiichi Miyazawa, starting the slow political movement that saw the formation of a genuinely viable opposition party and its electoral success in 2009.

It is probably true that Ozawa will never achieve his life’s ambition to be prime minister, but whatever happens in the short term, he will be remembered long after the “one-year wonders” who actually did become prime minister in recent years are long forgotten.