At stake is the future of a party that oversaw Japan's dramatic rise in the postwar period, but has come under withering criticism for its lack of governmental reform as well as its handling of the world's second-largest economy amid global financial meltdown. Opinion polls indicate the opposition Democratic Party of Japan has a good shot at winning Aug. 30 vote.
On Friday, Prime Minister Taro Aso, who has held office for less than a year, declared that the economy will achieve an annual growth rate of 2 percent by early 2011 and pledged to create 2 million new jobs. That pledge came despite a Bank of Japan forecast of a 3.4 percent contraction for this fiscal year.
Mr. Aso also vowed that household incomes would grow by about $10,000 a year over the next decade, and that Japan would lead the world in per capita income.
But he failed to explain specific plans for reaching these goals. Instead, he touted the LDP as the more reliable of the two parties.
Aso said he wanted to stress the LDP's "ability to take responsibility. Campaign promises must be backed up and consistent," he said. "That's what makes us different from other parties."
But Aso, whose two predecessors left office after very brief tenures, has struggled with low approval ratings amid policy flip-flops and a high-profile series of gaffes.
Now, many voters appear unwilling to give the LDP – heavily viewed as hidebound and more friendly to business than to individuals – yet another chance.
The LDP "have long failed to deal with protracted economic troubles. Japanese people don't even see Prime Minister Aso's seriousness," says Minoru Morita, an independent political analyst. "More people's lives have begun to crumble and many smaller businesses are on the verge of collapse. I can hear a collective groan coming from all over Japan."
That discontent is giving new life to the Democratic Party of Japan, which, despite its own struggle with a funding scandal that forced the resignation of former party leader Ichiro Ozawa, is polling far ahead of the LDP.
According to a Kyodo News survey conducted a week ago, 30.7 percent of those polled say they will vote for the DPJ, while 15.6 percent give the nod to the LDP. While 37.4 percent have not decided, 84.5 percent say they have a high or certain level or interest in the election.
Opposition hopes run high
Yukio Hatoyama, a Stanford University -educated engineer who has led the opposition DPJ since May, is banking heavily on disgruntled voter sentiment.
Mr. Hatoyama vows to end not only the long-running LDP government but bureaucratic rules and a two-decade-old economic slump.
If the DPJ wins, it is arguing that it will make the ruling party much more accountable, placing more responsibility in the hands of politicians, rather than bureaucrats. The party will place 100 or more Diet members in top government posts. In ministries, lawmakerswill take the lead in drafting, coordinating, and deciding policy – something bureaucrats do now.
"They have very ambitions plans, though I certainly believe it would be hard to implement them, says Masayasu Kitagawa, a former governor of Mie Prefecture who now leads the Research Institute of Manifesto at Waseda University in Tokyo. "This is unprecedented. This is not a change within the existing framework, but they say they will change the nation's system as a whole."
The DPJ is appealing to voters with promises to cut wasteful spending and boost household incomes. It is taking a more populist tack, dishing up plans to give more spending money to consumers by offering child allowances, making gas cheaper, and eliminating highway tolls.
"Taxes do not belong to bureaucrats and political insiders. We will restore control of taxpayers' money to the people," reads the DPJ platform. "The budget, realigned according to clear criteria, will help improve your livelihood and your life."
Sales tax pitch
The DPJ has promised not to raise the sales tax for the next four years. While the LDP concedes the sales tax has to be raised from 5 percent, it says it will not do so until after 2011 – and only if the economy recovers.
LDP members and critics have questioned how the DPJ will pay for these measures.
"Their drawback is they have few macroeconomic policies" in their platform, says Waseda's Mr. Kitagawa.
The problem, Mr. Morita argues, is "the DPJ has yet to recognize that the country is in economic crisis. They give little thought to economic recovery policy."
That fault lies in part with the media, which, unlike foreign media, have done little to highlight the seriousness of Japan's recession. Critics explain that by pointing to the media's dependence on government officials for their information.
Critics also point out government leaders' reaction when the collapse of Lehman Brothers triggered global financial meltdown last September.
The economic and fiscal policy minister at the time, Kaoru Yosano, now the nation's finance minister, called for a calm response, saying, "It will have a bee-sting effect on the Japanese economy."
Instead, the economy fell more steeply than those of other developed countries, shrinking at an annualized rate of 15.2 percent in the first quarter of this year, its sharpest decline on record.
The deepening recession has aggravated poverty problems, says Kenji Utsunomiya, leader of the Antipoverty Network, a Tokyo-based civic group. Poor people "used to be looked after by their family, community, and corporation. But now we have more nuclear families, more communities crumbling, and corporations shedding more workers. Then, we found the country's social security systems did not function at all."
Whether those most sharply affected by such problems can make their views known at the polls is in question. "Because more people are losing a place to live, they have no resident certificate, so, they can't vote," says the Tokyo-based lawyer. "Politics is supposed to shed light on such people."