Japanese election closely watched in Kingdom

TPP agreement, nuclear energy, East China Sea dispute on voters' minds

Today, Japanese voters are set to choose their new government. Its policies will have an impact regionally and globally, as the new Japanese government will define Tokyo's stance on important issues.

Tokyo faces challenges including deflation, conflict over nuclear energy policy and Japan's stance on international security issues.

Japanese voters will have a choice between the two contending parties, the ruling Democratic Party of Japan (DPJ) under the leadership of Prime Minister Yoshihiko Noda, which won a landslide victory three years ago, and the Liberal Democratic Party (LDP) under former prime minister Shinzo Abe.

Though the DPJ is the ruling party, its chances of winning the general election again this time are uncertain. Noda is the third DPJ premier since 2009, leading to questions over the party's ability to fix the domestic economic problems and strengthen Japan's stance in the world.

Noda has tried to implement reforms. He embraces a consumption-tax increase and has pledged to promote the Japanese agricultural sector. But the reforms are apparently too slow for voters. The LDP is likely to stage a comeback with a party platform to beef up military spending in response to a rise of nationalism in Japan, thanks to the dispute between China and Japan over islands in East China Sea.

While the rise of China has tested US leadership in the region over the past few years, many Japanese voters want to see the new leader offer a more forceful response to the international challenges.

Economically, the LDP's economic platform may resonate better with voters as the party promises more drastic change. Abe vows to pump out more yen and lower the interest rate to fix the deflation problem.

These policies would certainly have implications for Thailand, which has long-standing economic relations with Japan.

First of all, Japan has long been the biggest foreign investor in Thailand. Japanese companies have played a pivotal role in elevating the Thai industrial and manufacturing sector over the past four decades. Although foreign investment in Thailand has become more diverse in recent years, the health of the Japanese economy has always affected the level of investment in Thailand. The Thai business sector would like to see a Japanese economic recovery. Nonetheless, the policy to excessively print yen would certainly have an impact on the value of the baht and other regional currencies.

In addition, the new Japanese government is likely to make a decision on how to proceed with the Trans Pacific Partnership (TPP) Agreement and Asia's Regional Economic Comprehensive Partnership regional trade talks. The DJP has called for Japan to negotiate on the TPP, while the LDP has been vague on the issue. Politicians from smaller parties have voiced their disagreement with the TPP during the election campaign, a factor that will have to be taken into consideration by the new government.

Nuclear energy will also be a major issue for the new government after the disaster at TEPCO's Fukushima Daiichi nuclear power plant. Japan is considered a regional leader in clean energy, and the country's direction on energy policy will certainly be watched by others.

Japan once enjoyed glory days, but recently it has been replaced by China as the world's second-largest economy. South Korean companies have also overtaken Japanese brands as the leading electronics innovators.

Japanese voters thus would love to see a new leader who can pull Japan out of deflation and make the country more competitive in the globalised economy. However, the Japanese leadership has been challenged by the fact that Japan has had 18 prime ministers in the last 25 years.

Thailand would certainly like to see Japan strong again. First of all, the Japanese economy is one that countries like Thailand are comfortable with, compared to the rise of a powerful China, which has also been perceived as posing a threat to regional security.

In a regional context, Japan has been a strong supporter of Asean integration. Former Finance Minister Kiichi Miyazawa played an instrumental role in laying down the foundation for Asean financial integration with his Miyazawa Plan and the Chiang Mai Initiative, designed to help Asian countries recover from the economic crisis in 1997 and overcome regional shocks in the future.

The region thus does hope for a new Japanese government that can move the country forward and subsequently contribute to peace and stability in the region.

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Article source: http://www.thethailandlinks.com/2012/12/16/japanese-election-closely-watched-in-kingdom/