During the past week, Prime Minister Abe Shinzo and his cabinet have been presenting and defending key Abenomics initiatives before a special session
English: Margaret Thatcher, former UK PM. Français : Margaret Thatcher 日本語: 「鉄の女」サッチャー英首相 Nederlands: Margaret Thatcher Svenska: Margaret Thatcher som oppositionsledare 1975 Русский: Маргарет Тэтчер, бывшая премьер-министр Великобритании (Photo credit: Wikipedia)
of the Japanese Diet. Watching the live NHK broadcasts, one has to admire the British parliamentary system's direct Q & A format, where opposition politicians can grill the prime minister et al directly with repeated follow up questions, and demand answers, for 15 minutes or longer.
Since Abe's Liberal Democratic Party/New Komeito (LDP/NK) coalition victory in the July upper house election, the situation of "divided government"—with opposition parties controlling one Diet chamber and blocking most reform–which prevailed for most of past six years, has been resolved. As in the British system, the government is now virtually assured of passing any legislative proposals it presents.
The trouble for Abe is not the opposition parties, but members of his own coalition: with dissident members of his own party, and sometimes with cabinet ministers. Ironically, the landslide LDP victory brought in a host of new LDP Dietmen beholden to special interest constituencies and opposed to reform. Cabinet ministers will represent the bureaucratic interests of their ministries.
About the cabinet, a critical point was explained to me yesterday by Professor Yashiro Naohiro, one of Japan's most authoritative voices on labor policies, and a key player in Koizumi-era key deregulation efforts, particularly "Special Zones for Structural Reform" (see my interview with Yashiro last year). I visited Yashiro in his academic office in Sangenjiaya to ask about labor issues and Abe's "national strategic zones" initiative.
Explained Yashiro, as in the British system, the Japanese prime minister is just one minister among others within a cabinet. Policy proposals must be supported unanimously by all cabinet members. Thus, a cabinet member, by dissenting, can prevent a proposal opposed by the ministry he represents from being adopted by the cabinet.
Margaret Thatcher, pursuing her reform agenda against bureaucratic opposition, did not hesitate to fire dissenting ministers, replacing them with supporters, remarked Yashiro. Abe is more polite.
We are seeing these elements of Japanese political economy playing out now.
Abe's government is planning to push through some key legislation of the "third arrow" growth strategy during the current special Diet session that ends on December 6. On November 1 Abe is schedule to present to the full Diet lower house bill to enhance business competitiveness, including tax incentives to promote investment and sector restructuring. The new draft laws—generally favored also by the opposition Democratic Party of Japan (DPJ)–could be approved by mid-month.
Abe's second major "growth strategy" push this Diet session is to establish next year geographically-limited "national strategic zones" within which to pursue "bold deregulation." Draft legislation will be presented to the in early November.
PM Abe has been heading a committee hammering out draft legislation for the "zones." The committee includes only four minister level members—PM Abe, the chief cabinet secretary, Suga Yoshihide, the minister for internal affairs, Shindo Yoshitaka, and the minister for economic and fiscal policy, Amari Akira, as well as "knowledgeable persons" from the private sector
The absence of ministers from the various ministries in either of these groups gives the impression that Abe is determined not to allow bureaucratic interests to derail reform. Professor Yashiro points out that central ministry officials will always be involved in substantive deliberations, and their opposition will be enough to block progress. This has happened in the case of labor rule reform.
The zones have been conceived as places for relaxing or eliminating Japan's regulatory restrictions in the areas of medical care, employment, agriculture, education, construction, and residential property use. While many politicians dream of reviving rural areas, it appears that the four or five zones are likely to be established first in Tokyo, Osaka, Nagoya, and Fukuoka.
One of the main targets of the zones is international investors and companies. Abe clearly believes that Japan needs to attract more foreign investment and corporate operations to Japan's major cities. The zones are intended to remove restrictions and regulations that are believed to have discouraged such investments and operations.
Thus, in the outlines reforms within the zones we see allowing foreign doctors to practice (but only on foreigners) and to use drugs not currently approved in Japan. Likewise, foreign teachers can be employed and foreign educational institutions will be allowed to use public facilities (classrooms, etc.) within the zones, providing schooling for foreign staff.