Powerbroker Ozawa leaves Japan ruling party

July 2, 2012
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Ichiro Ozawa, a powerful member of Japan’s ruling Democratic Party of Japan/AFP

, TOKYO, Jul 2 – “Shadow Shogun” Ichiro Ozawa and his supporters on Monday stormed out of Japan’s ruling party in protest at a sales tax hike, in a move that reduces, but does not overturn the government’s majority.

The 50 lawmakers — 38 from the lower house and 12 from the upper chamber of parliament — submitted their resignations to Prime Minister Yoshihiko Noda’s Democratic Party of Japan (DPJ), one of them told reporters.

Kenji Yamaoka, a close ally of Ozawa and a leading defector, had earlier said as many as 52 lawmakers were leaving, but two later retracted their resignations.

“The best way is not to leave the party, but now we can’t help but take the alternative,” Ozawa told a lawmaker, according to the evening edition of the Asahi Shimbun.

Noda and senior DPJ officials will hold an executive meeting later in the day to discuss how to handle the split, party officials said.

The widely-trailed bolt is a blow to Noda, but is not big enough to deprive him of his majority in the lower house, which has the power to appoint prime ministers.

Many of the defectors were among the 57 DPJ lawmakers who voted last week against legislation to double consumption tax to help pay off Japan’s mountainous debt.

After months of furious horse-trading that brought the two largest opposition parties on board, the bills cleared a lower house ballot easily and passage through the upper house looks to be in little doubt.

Noda, who has staked his premiership on a tax rise widely believed to be a sensible way for Japan to begin plugging its fiscal hole, has warned he would deal with party dissidents “strictly, following party rules”.

However, the leadership had been seen soft-pedalling the rebellion, not wishing to upset the balance in a party that is strung together by loose alliances and often struggles to find any binding ideology.

“Things including what we are going to do will be explained by Mr. Ozawa at a news conference later,” Yamaoka told reporters after submitting the letters.

Ozawa, a former leader of the DPJ, had until Monday headed the largest faction within the party he is credited with leading to power in 2009.

He is widely expected to start making arrangements to form a new party, possibly this week, political sources said.

Over four decades, Ozawa has earned the nicknames “The Destroyer” and “Shadow Shogun” for his record of creating and wrecking political alliances and striking behind-the-scenes deals that advance his agenda.

His formidable war chest and wide-ranging connections have enabled him to build a significant powerbase in parliament, with a large number of lawmakers owing tribute because of his role in securing their seats.

The 70-year-old Ozawa, who led the DPJ from 2006 to early 2009 shortly before the party was swept to power, had been somewhat knocked off his axis by a political funding scandal that forced him from the front line.

He was cleared in April of charges of illegal use of political funds and has since mounted something of a comeback.

However, his power to wreak havoc is diminished, and although he wields influence in political circles, he is deeply unpopular with the public at large, for whom he stands as proxy for the big money politics that has so bedeviled Japanese governance for years.

Ozawa’s particular complaint this time has been Noda’s plans to double consumption tax from the current five percent by 2015.

Noda has warned that the future of the world’s third-largest economy rests on tackling its huge public debt, which at more than double GDP, is proportionately the world’s largest.

But opponents of the tax rise say any increase in household bills would derail Japan’s uncertain economic recovery.

Analysts say Ozawa’s move is unlikely to prove fatal to Noda in the short-term, but the party as a whole is in trouble.

“This is the same terminal condition the Liberal Democratic Party (LDP) experienced” when the party gave up power in 2009, said Koji Nakakita, professor of politics at Hitotsubashi University in Tokyo.

Nakakita said the DPJ may strip Noda of his premiership when it holds its leadership election in September in a desperate bid to regain public support before going to the voters.

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