Political, Economic Reforms – the Japanese Lesson

A Kadir Jasin

REFORMING politics, as the Japanese experience shows, isn’t easy. The Japanese started theirs in the 1990’s and only now it’s beginning to show results. Reforming the economy is even harder.

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The Peoples’ Declaration (Deklarasi Rakyat) and the emerging opposition consensus have agreed that reform is one of the key elements in their struggle.

Part 37 of the Peoples’ Declaration states: “We call upon all Malaysians, irrespective of race, religion, political affiliation, creed or parties, young and old to join us in saving Malaysia from the Government headed by Dato’ Sri Najib Tun Razak, to pave the way for much needed democratic and institutional reforms, and to restore the important principle of the separation of powers among the executive, legislature and judiciary which will ensure the independence, credibility, professionalism and integrity of our national institutions.”

In Japan’s case, the reform greatly affected the fortunes of political parties, especially the ruling Liberal Democratic Party (LDP). It weakened the party in the initial stages but provided it with a glimmer of hope for long-term stability.

There is an uncanny similarity between LDP and Umno. The former came into being in 1955 through a series of mergers of post-WW2 parties and immediately gained power. Umno too was formed after the war – in 1946 – and in 1955 monopolised the results of the Malayan Legislative Council election.

The LDP stayed in power until it lost control of the lower house of the Diet (Parliament) in 1993 amidst of internal squabbles over reforms.

The Diet comprises the lower and upper houses, both on which are elected by the people.

In 1991 I visited LDP’s headquarters in Tokyo to talk to Tsutomu Hata who was tasked with reforming the party and wrote a report for my then newspaper New Straits Times.

(Last week, at the invitation of Gaimu-sho, the Japanese Foreign Ministry, I visited Japan as a social media journalist and had the opportunity of revisiting the Japanese economic and political scenes, among other things.)

The party reforms were to be carried out in the context of the overall political and electoral reforms. Immediately he became unpopular with the party’s warlords and interest groups affiliated to them.

Then, the LPD politics was about personal power, legacy and patronage. Many MPs were third generation aristocrats and they used their position to make money by dispensing patronage. They were individually powerful but party structure was weak and rudderless. Cash was king.

It was widely known that many LDP warlords were affiliated or linked to the Japanese underworld, the Yakuza, and Prime Ministers did not last more than three years on average due to infighting.

We now see in Umno a similar trend – warlords, patronage and money politics. More recently the party has edged towards autocracy and is backed by organised intimidation in the form of the Red Shirts.

The Price of Reforms

The 1994 political reform in Japan made election more universal, the party structure more dominant and the cost for aspiring politicians to join the fray lower. But it costs the taxpayers more.

The year before the LDP lost the lower house election partly due to squabbles over the reforms. There were considerable opposition by the warlords and the interest groups affiliated to them like the construction business, farmers and municipal workers.

Several reform-minded LDP leaders like Hata, Morihiro Hosokawa and Ichirō Ozawa left to form the Japan Renewal Party. They joined minor parties to form a coalition government at the end of 1993 with Hosokawa as Prime Minister.

The LDP lost the 1993 lower house election due largely to internal squabbles and the economic hardship brought about by the ending of the so-called miracle economy as well as an insider trading and corruption scandals that forced many prominent politicians to resign a few years earlier.

Unprepared to govern, the opposition soon found itself in crisis. On 28 April 1994, Hosokawa resigned and Hata became prime minister. However, when a coalition partner, Japan Socialist Party defected, Hata lost the majority in the Diet. Rather than facing a vote of no confidence, he resign in June, after ruling for mere nine weeks, allowing the LDP-led coalition to claw back to power.

The LDP remained in power until 2009 through a series of wobbly coalitions and amidst continuing internal squabbles. In the meantime the economic situation worsened and Japan suffered the longest deflation ever in the history of a developed economy.

In the 2009 election, the LDP was roundly defeated – easily the worst defeat of a sitting government in modern Japanese history, and also the first real transfer of political power in the post-war era.

But once again the fractured oppositions fumbled and the weak LDP successfully made a comeback in the December 2012 general election. It won a landslide victory.

According to a New York Times report of Dec 16, 2014 the voters gave power back to the conservative party in a chaotic election crowded with new parties making sweeping promises, from abolishing nuclear power after the Fukushima accident to creating an American-style federal system. The LDP and its coalition partners prevailed with their less radical vision of reviving the recession-bound economy and standing up to China.

The popular nationalist Prime Minister, Shinzo Abe (corrected), has been promising the Japanese people that he would extricate the economy from the two-decade deflation and put it back on the growth path.

Given the weak economy the recovery options are limited. Abe is banking largely on a successful monetary policy. The Bank of Japan (BoJ) had been tasked with raising the inflation rate by two per cent annually, which it had so failed to achieve.

The Japanese people are not spending because they have no confidence in the recovery plan. They would rather keep the money in the bank and not earning any interest.

A Lesson for Malaysia

Japan’s political and economic experience is a useful lesson for Malaysia. The parallel between their ruling parties – the LDP – and Umno is uncanny. What LDP has been forging with its rivals for decades in order to cling on to power, Umno is trying out with PAS.

But our opposition parties have yet to rise sufficiently strongly to change Barisan Nasional’s hegemony. They are showing signs of wanting to put up a stronger challenge at the time when Umno appears to be sidestepping its traditional allies and favouring PAS instead.

If the oppositions are serious about gaining power and reforming the country as was set out in the Deklarasi Rakyat, they must first unite and take on the BN in a straight fight in the coming general election and lay out a credible reform programmes.

The reforms must not only address the electoral system but equally important is to restore and strengthen state institutions like the police, Attorney General’s Chamber, Malaysian Anti-Corruption Commission, the Public Account Committee and Bank Negara, which have all been severely compromised following the multibillion ringgit 1MDB scandal and to revive the flailing economy.

Wallahuaklam.