Balancing the ballot

Abe's vote gamble is a welcome sign of reform zeal

Shinzo Abe has stirred up an issue that most Japanese politicians like to sweep under the carpet: electoral reform. The prime minister's drive to trim the outsized influence of rural voters is a refreshing sign of his zeal for reform. More so because such a move could hurt his own party's performance in future polls.

Abe announced on June 26 that he wants to set up a commission of independent experts to rethink a system that currently over-represents voters in sparsely populated rural constituencies, the traditional bastions of support for Abe's Liberal Democratic Party.

Politicians have been under pressure to change the system for some time. In last December's elections, a single vote cast in Japan's least crowded constituency counted 2.43 times more than a vote in the most populated district . A Japanese court wants that ratio reduced below 2. But were token appeasement of the judiciary Abe's only goal, then he had already achieved it with the June 24 passage of a bill that reduces the representation of five thinly populated prefectures.

To be sure, just setting up a commission doesn't guarantee a vastly improved electoral system. But the proposal "does show leadership, and should improve confidence in reform momentum," notes Morgan Stanley MUFG economist Robert Feldman.

Abe has so far relied on fiscal and monetary easing to end Japan's entrenched deflation. For the first time in seven months, consumer prices excluding fresh food didn't fall in May. But they didn't rise either. For Abe to fulfil his campaign pledge of two per cent inflation in two years, employment and wages must climb higher. That doesn't happen easily in Japan, partly because companies keep surplus workers during downturns, reducing the need for rapid job creation when the economy improves. Together with more competitive service and energy industries, making the labour market more flexible will require legislation - even if it means upsetting vested interests.

The LDP is widely expected to take control of the Japan's upper house on July 21 vote, giving it greater latitude to make tough decisions. The leadership Abe is bringing to electoral reform will raise investors' expectations of similar bold action in the economic sphere. Anything less will disappoint.