Japanese landslide may not lead to earthquake

The sweeping victory of the Democratic Party of Japan over the Liberal Democratic Party has stunned the world.

The election of Yukio Hatoyama’s party ends 54 years of nearly LDP uninterrupted rule.

Although the victory had long been predicted by pollsters, it was the thumping mandate for reform that surprised observers.

The DPJ has increased its seats from 112 to 308 in the 480-seat lower house, coupled with its dominance of the Diet’s Upper Chamber, now can forge ahead with its new agenda unencumbered with parliamentary obstacles.

A change of government in Japan in itself is healthy sign and an expression of democratic will that it has hitherto been reluctant to realise. The LDP has shuffled through an ineffective cadre Prime Ministers, yet none were able to satisfy the public’s demand for change.

Yet, the LDP has been competent in its administration of the nation’s economy – overseeing its transformation from a war-battered, defeated people to the most developed country in the world. This success partly hinged on the “iron triangle” the close relationship between the LDP, the banks, and big-business representatives.

Japan was badly hit by the 1997 Asian Financial Crisis, and its economy has been in the Doldrums since. The inability of the establishment to find any alternative beyond the old institutions sapped national confidence from the LDP on an unprecedented level.

So now, will we see a “revolution” as the new Prime Minister suggests? It is important to note that Hatoyama is himself the grandson of a former LDP prime minister, and is a product of the old conservative institutions.

Quite how revolutionary the new administration will be is unclear. The DPJ seems to advocate a more Asia-centric foreign policy, although still wishes to retain the US as the bedrock of its defence.

There are confusing messages on dealing with public debt – which currently stands at 170% of GDP. The DPJ promised to remove some education fees, and providing a minimal guaranteed income for farmers, but has denounced media expenditures on the 2009 Budget "wasteful spending." Including the cancelling of a ¥11.7 billion Media Centre.

Japan’s economy urgently needs reform. Specifically, its public and business sectors require genuine transparency and accountability.

Currently, unless the new government develops a much needed ambitious new vision of Japan, the DPJ is in danger of finding itself as a LDP Mark II.