Japan's October surprise

This Sunday, the Liberal Democratic Party suffered a historic defeat in the general election — although Prime Minister Shigeru Ishiba has vowed to stay in power as long as he can.

The party's humiliating rout was presaged just three days before the election by reports of the LDP’s unbelievable decision to give ¥20 million to local branches led by candidates who were denied party endorsement due to their involvement in a slush funds scandal.

The political situation in Japan is now highly uncertain.

I have written that the rise of far-right movements in Europe and Donald Trump in the United States share basically the same roots. The center-left and center-right parties once dominant in Europe began to lose influence after the Cold War because globalization and the internet revolution made societies more unequal, polarized and difficult to govern.

Existing moderate forces could not solve problems such as the influx of immigration and widening wealth gap. The discontent and anger of those left behind — mainly working class citizens in industrial areas dissatisfied with increasing inequality and stagnating incomes — has translated into support for far-right forces on both sides of the Atlantic.

I wonder if there is a similar sense of inequality and dissatisfaction in Japan today. There is certainly a lot of anger at the country's stagnation during the so-called lost decades since the 1990s. Although the direct cause of the LDP's crushing defeat was a money scandal, the underlying factor is dissatisfaction with established political parties of the kind also seen in Western countries.

Nevertheless, disparity in Japanese society is relatively low and, fortunately, there are no mainstream far-right forces like those in the West.

Why, then, did the LDP suffer such a devastating setback? There is no doubt that direct responsibility lies with Ishiba and his administration. In particular, the ¥20 million payment was a disastrous misjudgment.

There are three other decisive causes. The first is the structural change within the LDP that followed the assassination of late former Prime Minister Shinzo Abe. The Abe faction was a major force in the party, with up to 100 Diet members, and its power was immense. Yet, the stronger it became, the greater the pushback from the opposition, and what we see now is a backlash and revenge against the faction's remnants.

The second reason is confusion in the former ruling party's decision-making process. Fault lines within the LDP have made it nearly impossible for it to reach a consensus on issues. There is no time to gather opinions and decisions have become haphazard. Under these circumstances, things like funding unendorsed candidates in the middle of an election can happen. Simply put, the payment could have been made after the vote, if only the party had thought about it collectively.

The third reason is the depletion of human resources. Since conservative parties merged in 1955 to form the LDP, the grouping has been a source of charismatic politicians, for better or for worse, with each generation fielding candidates of prime ministerial caliber.

However, in the 21st century, when voters are looking for new ideas and leaders, the LDP has become an old-fashioned group with many second- and third-generation hereditary Diet members. It is no longer able to attract the kind of political talent needed to tackle today's challenges.

If the LDP is unable to undergo structural change, its decision-making process collapses and its remaining pool of talent dries up, then Japan's domestic politics will inevitably remain unstable.

In that case, whether Ishiba continues in his post or is replaced by a new prime minister, or whether the coalition between the LDP and its junior partner Komeito is replaced by a new one, Japan's next administration is sure to be a weak one.

Next summer will be the Upper House election. No matter who the prime minister is, it will not be easy for the LDP to win the next vote in such an uncertain environment. If the party loses voters' confidence again, this could lead to a situation in which the prime minister is replaced every year, just like the nightmare that followed the end of the first Abe administration in 2007.

Even with all this chaos, one thing that is unlikely to change significantly is Japan's foreign policy.

This is because the current confusion was not caused by a diplomatic issue. Also, as long as the LDP-led administration continues, there is little chance of the Indo-Pacific policy established by Abe changing. And finally, even if a government led by the opposition Constitutional Democratic Party of Japan were to gain power, there would be no reason to significantly alter Tokyo's foreign policy.

After all, even Ishiba — vocal about his own views on international affairs — did not and could not change course. No matter how chaotic domestic politics may become, Japan’s outward-facing stance will remain stable. This is good news and a source of hope for the country, which has entered a period of historic political transformation.