National disasters of this kind either provide an opportunity for governments to exercise strong leadership or they cruelly expose the lack of leadership ability. If Kan is correct in saying that this is the biggest disaster facing the nation since WWII, then restoring the nation to growth may become the biggest challenge that any Japanese government has faced since the end of the war.
It is certainly the end of ‘politics as usual.’
The LDP has switched from conflict to cooperation mode — a truce has been called between the LDP and DPJ — it’s all hands to the wheel. For Diet members, that means passing the necessary legislation to fund disaster relief and reconstruction assistance, including legislation to secure the necessary funds. Something approximating a government of national unity seems to be emerging. Of course, there will be haggling over how much is to be spent, and how the funds are to be raised — whether by issuing government bonds, including special reconstruction bonds or special revival national bonds, or by raising taxes including the consumption tax, or both. Politics is not altogether absent from these discussions.
For the DPJ, the question is whether or to what extent it relinquishes key planks in its manifesto such as the child allowance and income subsidies to farmers, and redirects these funds to disaster reconstruction. A suggestion has come from some LDP members that the government should abolish its child-allowance program in entirety, describing it as a ‘pork barrel’ measure. LDP President Tanigaki Sadakazu has called for a Tohoku Revival New Deal policy.
The necessary expenditures to fund Japan’s revival and reconstruction will inevitably exacerbate its fiscal debt problem. This was a disaster Japan could not afford to have. Not only will the debt expand, but government revenue will also fall owing to the projected decline in funds raised from income and corporate taxes. Local governments in the severely affected areas will be particularly squeezed and will be looking to the national government to bail them out.
More is known about the damage to Japan’s fishing industry than to its agricultural industry, despite headlines saying ‘Agriculture industry takes a massive hit.’
The Nihon Nōgyō Shinbun tells us:
- Personnel, rice fields, farmland, greenhouses and agricultural machines have been severely damaged.
- Rice distribution has been greatly disrupted because rice storage houses have been affected by the tsunami, and also because of gasoline shortages. This has led to the hoarding of rice in the Kanto region. However, the MAFF asserts that there will not be a shortage of rice, because supply was greater than demand in the past year, and the government holds a reserve stock of rice.
- Feed-mills were damaged in various parts of the Tohoku region, leading to a halt in the manufacturing and shipment of feed for livestock. The extent of the damage is not yet fully known. Nor is the date when they will be able to start operating again.
- Milk factories in areas affected by the disaster have not been able to operate because of the damage done and water stoppage. They are also affected by the halt in feed manufacturing and shipping.
The disaster may present an opportunity to move some small-scale, part-time farmers who are of advanced age out of agriculture in the affected areas by providing them with livelihood assistance, such as income compensation as a social measure.
The government’s program of agricultural revitalisation, which it was due to announce in June, will switch to an agricultural reconstruction policy — restoring supply lines, processing factories and distribution networks, rebuilding farmland and irrigation systems, and reconstructing vinyl houses for horticulture.
The reconstruction program may ultimately turn out to be a pork-barreller’s dream, with political conflict over who gets what and how much. Local members in particular will be focussed on their electorates and what bounty there is to be had.
All non-essential policies unrelated to the disaster will be put on the backburner, such as trade policy. The earthquake and tsunami will inevitably affect ‘the Heisei opening of the nation’ that Prime Minister Naoto Kan had been promoting. It is likely that the government will postpone its judgment on the pros and cons of entering the TPP negotiations, which it planned to finalise in June.
The man charged with the role of coordinating the government’s response on this issue, Tatsuo Hirano, Deputy Minister of the Cabinet Office, did not hide his agitation at the first meeting of the TPP-related task force, which was held immediately after the earthquake on the afternoon of the 11 March. He said, ‘I’m still upset. I’m very anxious, but I want to advance this now …’
‘Opening-of-the-country forums,’ which the Kan government had been using to explain the TPP to the nation, were cancelled in Osaka on 12 March and in Sapporo on 13 March. They will be put on hold for the foreseeable future.
Aurelia George Mulgan is Professor of Politics at the University of New South Wales, Australian Defence Force Academy.
Will this terrible series of disasters revive all the fears about “food security”, or instead encourage Japanese people as well as policymakers to boost food imports – long term (especially if radiation is found in local products, even at minuscule levels) as well as short term?
If the US and others are still on track to conclude TPP negotiations by the end of this year, if Japan delays a decision about joining them from mid-year to say August or Sept, will it be too late anyway?
Luke, my answer to your first question is ‘both’. There will be increased concern about domestic food supply in the short term (more details are being released all the time about the damage to the agricultural sector), although underlying that will be a more general concern about Japan’s food security. The issue of food security will also be used by the domestic farm lobby to strengthen its campaign against agricultural market opening – as it has always been, but now with renewed salience.
On your second point – the TPP negotiations wait for no man – the United States has its own timetable on this, and as you know, have set the November APEC meeting in Hawaii as some kind of informal deadline for the conclusion of the negotiations. In the short term, the best that can be hoped for with respect to domestic Japanese trade policy is that the TPP issue is used to promote a free trade agenda in which EPAs with various countries may progress – such as with South Korea, with the EU, with Australia, and with Canada. Japan will probably back off from the TPP itself, putting it in the too-hard, too-risky, too-pie-in-the-sky basket. Moreover, trade policy as a whole, as I said in my posting, will be put in the non-urgent category by a government almost overwhelmed by serious, immediate problems of crisis management, followed by a myriad of decisions that have to be taken on reconstruction and how to fund it.