Japan goes to the polls

Japan's forthcoming snap general election on September 11th is being persuasively billed as the most important since the end …

Japan's forthcoming snap general election on September 11th is being persuasively billed as the most important since the end of the second World War by commentators there.

Called last Monday by prime minister Junichiro Koizumi after the parliamentary defeat of his proposal to privatise Japan's huge post office system, the election bids fair to break up and regroup its party system along more ideological lines - or at least to begin such a process of fundamental change.

Mr Koizumi has been in power since the April 2001 election, having been re-elected in November 2003. He has had a distinctive political style as a dominant leader rather than the normal prime ministerial role as a temporary broker of consensus between the Liberal Democrats' clientelist factions attached to particular ministries. Similarly, his determination to privatise the post office goes back to his time as minister of posts and telecommunications in the early 1990s, notwithstanding the long delay in bringing the issue to a head.

The Japanese post office system commands some €2,530 billion in savings. This has been the great source of funding for pork barrel infrastructural projects shoring up the Liberal Democrat Party's electoral appeal in poor and disadvantaged regions. Mr Koizumi lost this week's vote when 37 LDP members of parliament revolted against his privatisation bill. He has expelled them and gone to the country in a daring and risky venture which puts the issue directly to the electorate. Japanese politics may be forced to regroup as a result along more ideological lines, between market liberals and those who support continued social protection through existing or adapted mechanisms. There is no certainty about who will win this contest or how long it will take, although Mr Koizumi is admired for his daring.

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Such a political realignment would boost economic reform and restructuring - and may be hastened by definite signs of economic recovery in Japan after a decade or more of stagnancy. This is largely driven by growing trade with China. It presents Mr Koizumi with an acute political dilemma later this month as to whether to pay another visit to the Yasukuni shrine in Tokyo commemorating Japan's war dead. Such a visit would inflame relations with Beijing and could upset the election campaign.

Suddenly Japan's politics become more interesting as a result of these events. The scale of potential change flowing from a Koizumi victory or defeat will probably define them for a long time to come. This includes the foreign policy arena, since the opposition Democrats have pledged to withdraw Japanese troops from Iraq.