RACE FOR NEW PM IS ON, WITH ASO MAKING STRONG

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 002503 SIPDIS E.O. 12958: DECL: 09/11/2018 TAGS: PGOV PINR ECON JA SUBJECT: RACE FOR NEW PM IS ON, WITH ASO MAKING STRONG SHOWING TOKYO 00002503 001.2 OF 002 Classified By: CDA James P. Zumwalt per 1.4 (b/d) Summary -------------- ¶1. (C) The race for the next LDP President -- and Prime Minister of Japan -- has begun, and polling of LDP Diet members and party prefectural chapters shows that party Secretary General Taro Aso is in a strong position. The five candidates' focus has so far been almost completely on economic and pocketbook issues. Once the next Prime Minister is in place -- likely around September 24 -- the conventional wisdom is that the Diet will be dissolved in early October and a general election will be on or around November 9. The focus here too will be on economic issues, and the opposition DPJ is preparing to campaign as the party that will improve people's livelihoods. In the near term, passage of the supplemental budget and legislation extending Japan's contribution to OEF is unlikely. End Summary. The LDP Election... -------------- ¶2. (C) The campaign for the new leader of the ruling Liberal Democratic Party (LDP) -- and next Prime Minister -- kicked off September 10 and will run for 12 days. On September 22, the LDP's 386 Diet members will vote and the 141 prefectural chapter votes -- three for each of Japan's 47 prefectures -- will be tabulated. Whomever of the five candidates receives a majority will be declared the winner and President of the LDP. In case no candidate is the clear victor, there will be a run-off between the top two candidates, with only LDP Diet members voting. The next LDP President will be installed as Prime Minister during a special session of the Diet, likely to take place on September 24. ¶3. (C) Five prominent LDP leaders have thrown their hats in the ring: party Secretary General Taro Aso; Economic and Fiscal Policy Minister Kaoru Yosano; former Defense Minister Yuriko Koike; former Policy Research Council Chair Nobuteru Ishihara; and former Defense Minister Shigeru Ishiba. So far, the focus of the candidates' stump speeches and media appearances has been their respective economic policies, with Aso on the side of increased public spending to re-invigorate the economy, Koike advocating a continuation of former Prime Minister Junichiro Koizumi's structural reform agenda, and Yosano pressing arguing for fiscal discipline, including floating a consumption tax increase to cover increased pension costs. There has been very little discussion so far of national security issues, save for familiar references to the importance of the relationship with the United States. ¶4. (C) A Yomiuri Shimbun poll of the LDP's 386 Diet members indicates that Aso has the support of a majority of them, at 197 votes. Yosano follows with 34 votes, Koike has 29 and Ishiba and Ishihara are tied at 24 votes. Some 78 Diet members remain undecided. (Other newspapers' polling shows similar results.) Among the reasons for supporting Aso, a little over 40 percent of those backing him cited his "policy approach." Other reasons given were that he would be a "good face of the LDP" for the next general election and that he has a "likable personality." Notably, factional loyalties are not a major factor in this race, with most faction leaders advising their members to "vote their conscience." As a result, the votes of the largest Machimura faction are going to several candidates rather than faction member Koike. ¶5. (C) With Aso faring strongly in the Diet members' vote, the candidates will turn their attention to the 141 prefectural chapter votes, an LDP watcher in the media told Embassy Tokyo, and the candidates will spend the next several days on nationwide speaking tours. Significantly, polling of the prefectural chapters shows Aso also faring well among this voting bloc. ...Followed by a General Election? -------------- ¶6. (C) The conventional wisdom here is that the next Prime Minister will deliver his (or her) policy speech at the Diet in late September, spend a couple of days in Diet deliberations and then dissolve the Diet in early October TOKYO 00002503 002.2 OF 002 (October 2 or 3 are likely). During a number of conversations with Charge September 10, ruling coalition and opposition leaders posited that the general election will likely be set for November 9. Opposition Democratic Party of Japan (DPJ) acting President Naoto Kan said that, should the election be set, his party's focus would be on economic and livelihood issues, such as pensions, health care and bureaucratic waste and mismanagement. In a separate conversation, DPJ Secretary General Yukio Hatoyama acknowledged to Charge that, while the LDP has succeeded in dominating the media in the wake of PM Fukuda's resignation announcement, the DPJ "should not panic" and will instead stick to its focus on reform and improving people's lives. ¶7. (C) Many press analyses and election scenarios paint a gloomy picture for the LDP, with some suggesting that the party could lose 100 seats and its Lower House majority. While many of these scenarios are overly dramatized, senior LDP politician Taro Nakayama told Charge September 10 that the outlook for the party in his home district of Kansai is indeed "grim." Many voters there are concerned about the state of the economy, and the task the LDP will face will be to convince them that it is capable of addressing people's concerns, Nakayama said. He thought many of the "Koizumi Children," those freshmen Diet members elected in the LDP landslide in September 2005, would not be re-elected. OEF, Supplemental Budget Difficult in Near Term -------------- -- ¶8. (C) Ruling coalition partner Komeito's senior advisor, Diet member Takenori Kanzaki, told Charge September 10 that, in the event the Diet is dissolved in early October, it will be difficult in the near term to pass the supplemental budget and legislation to extend Japan's refueling contribution to Operation Enduring Freedom (OEF). Perhaps the supplemental budget could be passed later in year or in tandem with the budget early next year, Kanzaki suggested. As for the OEF legislation, while the Komeito had opposed extending it for "election reasons," after the election "there is no reason for us to oppose it," he said. ZUMWALT