Japan's Ruling Party Rues Prospect of Compromise

Downfall of long-dominant LDP portends period of instability

JAPAN'S ruling party is running scared in its campaign for July 18 elections.

The Liberal Democratic Party (LDP) faces the prospect of losing its majority in the lower house of parliament, because its popularity has plummeted in the wake of money and gangster scandals that drove at least 66 lawmakers to part company with the party in June.

The LDP could win enough seats in Sunday's vote, however, to remain Japan's largest party. Analysts estimate the LDP might get 210 to 230 of the 511 seats in the lower house, down from its once-comfortable 275 majority.

"They are paying the price for neglecting their ethics," says Raisuke Miyawaki, an expert on politics and Japan's gangsters.

What worries the LDP is that it might be forced into a coalition government with rival politicians whom it could often ignore in the past. When the party lost its majority in the weaker upper house of parliament after a 1989 election, it reluctantly worked with one or two small opposition parties to pass bills.

But sharing power in the lower house, which controls the national budget, could force the conservative LDP to give up much-coveted Cabinet posts to rival - and sometimes left-leaning - politicians and to share lucrative spending on pork-barrel projects.

That is something the LDP has never had to do in its 38 years in power. Many business leaders "think this is the beginning of the end" of Japan's established order, says Masaya Miyoshi, a director in Japan's Federation of Economic Organizations.

Big business had cut back heavily on its campaign "donations" to the LDP, hoping three small, new conservative parties can eventually combine to convert Japan's virtual one-party rule into an American-style two-party system. Two of them, the Japan New Party and the Harbinger New Party, have already agreed to join forces after the election.

Almost weekly for several months, the LDP has been tainted by reports of its corruption.

In early July, the ministers of finance and construction were caught soliciting money from the companies they regulate. After that, the mayor of the big northern city of Sendai was arrested for accepting bribes from construction firms.

Opposition Japanese politicians are stumping on a slogan of change, mainly a change in an electoral system that favors the LDP's strong rural base and forces candidates to collect large amounts of campaign money.

"All the opposition politicians talk about change, but they never say what kind of change," complains Yuki Nakano, a Tokyo shop owner.

The LDP has played to voters' fears of instability, citing the party's record of guiding Japan's postwar economic success. The leading LDP candidate to become the next prime minister, Michio Watanabe, has warned voters not to let Japanese politics become like it is in Italy or the United States.

`AFTER these elections, it will be like Italy, where there will be frequent change of governments," the daily Yomiuri newspaper quoted Mr. Watanabe as telling a rally. "The economy will be in disarray, there will be an increase in thieves and beggars, and there will be more armed robberies and rape."

Watanabe, a former deputy prime minister and foreign minister, also warned against accepting an American-style political system. "Japan is a safe country, with less crime and fewer drug addicts and AIDS patients [than in the US]," he said. "So is it right to say that Japanese politics are wrong?"

Some analysts do predict that political instability will persist after the election, forcing another vote within six months. Whatever mix of parties takes power, however, some sort of electoral reform seems certain, shifting Japan's political focus from rural farmers to urban consumers.

During his visit to Japan last week, President Clinton spent an evening with the new conservative opposition leaders who represent this likely urban shift. The Japanese media portrayed Clinton as a meddler in another country's politics, but the event seemed to spur the LDP to cut a trade deal.

US officials had hinted that they thought they might get a better deal from a new government. Prime Minister Kiichi Miyazawa, perhaps worried about the appearance that Clinton favored the opposition, hastily arranged a visible, informal dinner over sushi with the president on the night before he left Tokyo.

"Urban voters generally favor liberalizations of agriculture, market-opening trade measures, and the rationalization of the [complex] distribution sector," says Salamon Brothers economist Robert Feldman.

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