Friday, August 28, 2009

Japan media predicts ruling LDP faces rout

       Japan's opposition Democratic Party looks set for a landslide victory in an election on Sunday, polls show, ending over five decades of almost unbroken rule by the conservative Liberal Democratic Party (LDP).
       Yukio Hatoyama's Democrats have promised to focus spending on households, cut waste and wrest control of policy from the hands of bureaucrats,a shift from the business-friendly LDP.
       Japanese media predict the Democratic Party of Japan (DPJ) will win,ending a deadlock in parliament where the party and its allies control the less powerful upper chamber.
       Financial markets would generally welcome the prospect of smoother policy-making as Japan tries to revive its economy and deal with the challenges of an ageing, shrinking population. But some analysts worry the DPJ's ambitious spending plans could inflate already sky-high public debt and push up long-term interest rates.
       If the DPJ win a two-thirds majority in the 480-seat lower house, they could enact laws rejected by the upper chamber. That is unlikely to be necessary soon, but would be key if the LDP and its partner win an upper house poll in the middle of next year. Even if the Democrats win a majority, they would need help from the small leftist Social Democratic Party and conservative People's New Party to pass bills smoothly. But a bigger Democratic majority means they would have to pay less attention to their allies, making policy formation easier.
       Too big a win, however, could make managing the party harder.
       A victorious Democratic government would quickly focus on keeping voter support ahead of the 2010 upper house poll, probably by keeping pledges to boost household incomes.
       But the government could be distracted if opponents zero in on a scandal in which Mr Hatoyama's aide reported donations from people who turned out to be dead.
       If the Democratic Party falls short of a majority, it could still take power by forming a coalition with two smaller allies. That would mean it would need to listen more to the Social Democrats and the People's New Party, and the coalition could could have trouble agreeing on policies, especially in the areas of security and diplomacy, where differences are most acute. If the Democrats stumble in the final days and the margin of victory on either side is very small, the LDP and Democrats would each try to woo defectors or small parties to form a coalition.
       The LDP has sought to lure back conservative voters with charges that the Democrats are spendthrift, weak on security and unpatriotic.
       Forecasts for a landslide opposition victory could also prompt some riskaverse voters to opt for the LDP,although analysts said there were few signs that this was occurring.
       A fuzzy outcome would delay the formation of a new government,although parliament must meet to elect a prime minister within 30 days.
       Policy implementation would be difficult, since lawmakers might not necessarily vie for power along clear policy lines. Opinion polls suggest this is unlikely and if the LDP and its junior partner stay in power, they will almost certainly lose the two-thirds majority that has enabled them to enact laws rejected by the opposition-controlled upper chamber.
       The policy stalemate would worsen,at least until the 2010 upper house poll. If the deadlock dragged on, the idea of a "grand coalition" among ruling and opposition blocs could be revived as a way to break the deadlock.
       One of Prime Minister Taro Aso's predecessors, Yasuo Fukuda, tried to form such a coalition with then-DPJ leader Ichiro Ozawa, but Mr Ozawa's party reject the notion.

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