Challenges Ahead For Japan's New Ruling Party

By: CNN
By: CNN

TOKYO, Japan -- Now comes the hard part. Handed a sweeping mandate for change, the Democratic Party of Japan (DPJ) begins the formidable task of delivering on a laundry list of promises intended to lift the country after its worst recession since World War II.

Voters -- skeptical, pessimistic and impatient -- are unlikely to give the party, which has never held office, much time to make good.

Japan is witnessing historic highs in unemployment and experiencing ramifications like homelessness for the first time.

Dissatisfied with the way Prime Minister Taro Aso was handling the crisis, the electorate booted from power his Liberal Democratic Party (LDP), which has governed the country for nearly half a century.

The election commission has yet to certify Sunday's election results officially. But according to the parties, the DPJ won 3-to-1 over the LDP. VideoWatch more about the political upheaval »

The DPJ's 308 seats in the lower house of the parliament, compared with the LDP's 119, is almost the exact opposite of their standing before Sunday's vote.

An assortment of other parties snagged the rest of the seats in the 480-seat lower house.

Elections for the upper house will be held next year.

Bruised politically, Aso officially stepped down as head of his party on Monday. VideoWatch report on why voters are looking for change »

Poised to become the next prime minister is DPJ leader Yukio Hatoyama. He was restrained in his first public comments since the vote.

"I hope this victory will be for the people of Japan," he said Sunday.

Hatoyama is setting up a transition team, but is not expected to announce his Cabinet until he officially takes office through a special parliamentary session in the next two weeks.

The DPJ leader has been touting a Barack Obama-style message of change. He has pledged to raise the minimum wage and discourage hiring through agencies or on temporary contracts.

Hatoyama's party has adopted a salvation plan based on "trickle up economics." It wants to put money in the hands of families, in hopes that they will spend it in Japan and stimulate the world's second-largest economy.

Though Japan officially rebounded from its recession in mid-August, Japanese households have yet to feel secure about a lasting economic recovery.

In its election manifesto, the DPJ said it will pay about $3,000 per child to each family every year -- to encourage women to have babies and reverse the country's rapidly aging and shrinking population.

It will also pay about $1,000 a month to each unemployed Japanese as he looks for a job.

But the question is, where will the money come from. Japan's budget deficit is enormous. Its national debt is almost two times its gross domestic product.

The DPJ says the money is there, tied up in the corruption and bureaucracy of decades-long LDP rule.

"The money which should go to the consumers and the farmers and small-scale business owners was stopped by the bureaucrats," said DPJ lawmaker Yukihasa Fujita.

"The budget went to the hands of industry and the bureaucrats. Therefore, the money didn't go to the consumers. Therefore, the economy has not been able to lift up."

On the foreign policy front, Hatoyama has strongly criticized what he perceived as Aso's pro-United States stance.

He said he will halt Japan's refueling missions in the Indian Ocean in support of U.S.-led coalition warships in and around Afghanistan.

But analysts say Hatoyama is unlikely to risk alienation abroad while he focuses on fixing what ails Japan domestically.

"We are confident that the strong U.S.-Japan alliance and the close partnership between our two countries will continue to flourish under the leadership of the next government in Tokyo," the White House said in a statement Sunday.

On Monday, Japan's stock market surged on news of the DPJ win, but closed with shares falling slightly -- reflecting the ambiguity that Japan feels about the coming days.


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