On Thursday, Asian stocks slid on news that China may cut overcapacity in the steel and cement industries and strengthen controls of stock and bond sales. They didn’t care a lick about mounting evidence that Japan, a far bigger economy than China’s, is going to experience historic change in Sunday’s election.
Think about it. Markets are all excited about something Chinese officials may do. They are indifferent about a Japanese power shift that will alter the dynamics in the second biggest economy. It says a lot about how much work the opposition Democratic Party of Japan, should it win, will need to do to restore Japan’s global influence.
Japan’s contest may be falling in the woods; its economy is far from out of them.
The steady slide off investors’ radar screens has been evident for some time. Yet, if you are wondering why the world has tuned out Japan, look no further than the use of cartoons in this election cycle. They are a reminder of the juvenile policies of the ruling Liberal Democratic Party—and why Japan is losing ground.
Sparring game: Workers at Ogawa Studios, a mask-making firm, pose as Japan’s main opposition Democratic Party leader Yukio Hatoyama (L) and Japanese Prime Minister Taro Aso of the Liberal Democratic Party. KimHyung-hoon / Mint
The LDP, trailing in the polls, on 25 August released new cartoon attack ads portraying the opposition as weak on trade and terrorism. An earlier cartoon showed a young opposition leader Yukio Hatoyama preparing bowls of ramen noodles.
Are you kidding? Japan is sliding back into deflation, public debt is almost twice the size of the economy and the population is ageing rapidly, while the birth rate is among the lowest in the developed world. And what does the LDP offer as a vision? Noodle cartoons. Add bizarre scare tactics to the list. Exhibit A: Finance minister Kaoru Yosano’s comment this week that a big opposition win risked one-party despotism. This, from a guy whose party has ruled Japan for all but 10 months since 1955. Somehow, Yosano kept his face straight while saying the word, while reporters avoided laughing.
It’s high time Japan had some new leadership. Taro Aso really should watch his back as the public slams the door on his hapless 11 months as prime minister.
The hollow cartoon dynamic has Aso written all over it. He played up his love of manga comic books to woo voters. They saw him as a regular guy, not unlike how Americans voted George W. Bush into the White House on the belief he would make a better drinking partner than the other guy.
Aso championed the construction of a manga museum to help boost the economy. The government also thought sending teenage schoolgirls in mini-skirts around the globe would drum up interest in Japan. The effort to capitalize on Japan’s all-things-cute craze quickly became a punch line.
Almost a year into Aso’s tenure, Japan finds itself worse off. In fact, the list of prime ministers during the 2000s is a who’s who of weak leaders. None of Aso’s predecessors—Yasuo Fukuda, Shinzo Abe, Junichiro Koizumi or Yoshiro Mori—did enough to put Japan on a healthier trajectory.
That’s not to say the spin campaign isn’t in high gear, and it even has a role for pop group SMAP. Lest you think I’m referring to a foot fungus or some other infection, the five members of SMAP are Japan’s biggest celebrities. On 26 August, they urged voters to support incumbent politicians in a front page advertisement of a national newspaper. Let that be another reason not to buy their inane music.
If Hatoyama, the prime minister to be, understands how much influence Japan has lost both in Asia and globally, he’s not letting on. The lack of interest in the 30 August contest should be a sobering reminder of how much work lies ahead.
I’m always amazed when visiting London, New York or Singapore how little interest there is in Japan. Mention China, Indonesia or South Korea and audiences are at full attention. Shift to Japan and the BlackBerrys come out. Folks see it as a cue to talk among themselves or take a bathroom break. Once the conversation shifts to India or Thailand, they listen again.
Economic reports these days routinely focus on ex-Japan Asia. It’s partly a recognition of the future. People are already looking ahead to a time when the Chinese and Indian economies eclipse Japan. There’s an unmistakable wake-me-up-when-it’s-over dynamic at play.
Too many times since the early 1990s, investors have bought into hype about a Japanese recovery only to be disappointed. With the exception of Koizumi’s 2001-06 tenure, LDP leaders failed to convince foreign investors that change was afoot. Even he proved to be a letdown, talking a good game of change, but engineering little. He rehabilitated the LDP, paving the way for eight more years of unsteady leadership.
No one can say whether the opposition will do any better than the LDP. They can’t do much worse than a party that fiddles with noodle cartoons while the economy burns.
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