Japan At Historic Point As Ruling Party Splits

IN 1991, Japan's ballooning stock market popped. In 1992, its sky-high property market fell to earth.

And now in 1993, Japan's giant Liberal Democratic Party (LDP) has taken a mighty tumble, losing its hold on government after 38 years in power.

The party split Friday in a no-confidence vote against Prime Minister Kiichi Miyazawa, who called for lower house elections on July 18, leaving himself and the nation in political limbo.

Japan's democracy, like its economy, faces fundamental structuring. Dominated by one party for decades, Japan's politics as well its role as a world leader are now up for grabs as the post-war order has been shattered by last week's events.

"We want to revitalize Japanese politics for the 21st century," says Tsutomu Hata, the LDP rebel who split the party and is leading the effort to form a new center-right party.

The sun has finally set on the LDP, say many analysts, its job finished as a conservative grouping of political factions put together in 1955 to help Japan fight the cold war and become an economic superpower.

With the cold war over, the economy faltering, and the public fed up with LDP corruption, the party has been paralyzed by internal power plays and a string of scandals that started in 1989. In the last two weeks, when the party finally admitted it would not seek reform of the electoral system before the end of the current parliamentary session on June 20, public opinion shifted markedly.

The no-confidence motion, introduced by six opposition parties, passed by a vote of 255 to 220. About 15 percent of LDP members defected by either voting for the measure or abstaining. The party's once-unbreakable majority in the lower house was effectively cut to a humbler 43 percent.

Its ranks could shrink further in coming days, as more defections are possible. The party's power has been ebbing ever since it lost a majority in the weaker upper house in 1989, because of political scandals, a new consumer tax, and a farmers' revolt.

In Friday's vote, Prime Minister Miyazawa was the most obvious target of criticism. But as a weak leader of a minor faction picked by party barons in 1991 to run the government, his real failing was in not being able to stand up to the back-room power of former prime ministers Yasuhiro Nakasone and Noburo Takeshita. Both men had to resign party posts amid the 1989 scandals.

Miyazawa's predecessor, Toshiki Kaifu, another weak, hand-picked prime minister, lost power in 1991 after pushing party leaders too strongly toward reform. Miyazawa is unlikely to stay as prime minister after the election. His term as party leader was to end in September anyway.

He "has betrayed the people by promising political reform and then refusing to allow parliament to debate the issue," roared Sadao Yamahana, leader of the opposition Social Democratic Party (SDP), in an unusually blunt speech. "The prime minister is a liar." Miyazawa responded: "I did not plan to lie."

Japan's search for a new political order will be made all too public to the world, as the election campaign will be under way during the summit of the Group of Seven industrialized nations in Tokyo July 7-9.

Miyazawa himself will be welcoming President Clinton and other leaders as a lame-duck (or "dead body," as the Japanese say), unable to do much about recent strong demands by the United States and Europe for Japan to resolve trade disputes. While Japan's powerful bureaucrats can make some concessions, the toughest decisions are often left to politicians.

"In the world after the cold war, Japan will be trusted and respected only when it has a healthy democracy," says Mr. Yamahana.

Political uncertainty will continue even after the election as Japan's various new and old minority parties try to piece together a coalition. Many Japanese do not regard the established opposition party as capable of governing.

Barring a full breakup, the LDP remains the largest party. The LDP will likely need to make alliances with other parties, as it has been forced to do off and on since 1989 in passing key legislation through the upper house.

"Japan may finally have a genuine multiparty system," says political commentator Minoru Morita.

Mr. Hata, the LDP rebel, plans to put up about 100 candidates under his new "Reform Forum 21" party, in the contest for the 511 lower house seats. The LDP hopes to field 132 candidates, while the SDP may put up 137. Other parties plan far fewer candidates. One measure of the LDP's prospects will be seen in elections this week in the race for 128 seats in the Tokyo municipal assembly.

Hata, and his fellow rebel Ichiro Ozawa, claim to be champions of election reform, but their images are tarnished by past membership in the formerly powerful LDP faction of Mr. Takeshita and Shin Kanemaru.

"Who were they just a few months ago? Nothing but loyal henchmen and hatchetmen working for Shin Kanemaru and Noburo Takeshita," stated a Mainichi newspaper editorial.

Mr. Kanemaru, once LDP kingpin, fell from grace last August after admitting that he took huge amounts of money from a trucking firm. His trial for tax evasion starts July 22, four days after the election.

Japan's business establishment, already suffering under a weak economy, is worried about the "political confusion." Japanese big business has been the main source of funds for the LDP, which is legendary for favoring producers over consumers in its governance.

The campaign is expected to focus on political reform, but the subject is so complex that the issue may not be easily resolved by the election. "This state of affairs is enough to perplex the most discerning voter," stated Mainichi. "Thus the parties and candidates who are to fight the upcoming election must make one point clear: whether to maintain the existing structure of seek an entirely new system."