Kan and Ozawa Spar Over Japan Economy, Scandals in Democratic Party Debate
Kan and Ozawa Spar Over Japan Economy, Scandals
Tomohiro Ohsumi/Bloomberg
Ichiro Ozawa, former secretary general of the ruling Democratic Party of Japan (DPJ), left, and Naoto Kan, Japan's prime minister and leader of the DPJ, prepare to shake hands before a panel discussion for their party's presidential election at the Japan National Press Club in Tokyo.
Ichiro Ozawa, former secretary general of the ruling Democratic Party of Japan (DPJ), left, and Naoto Kan, Japan's prime minister and leader of the DPJ, prepare to shake hands before a panel discussion for their party's presidential election at the Japan National Press Club in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg
Japan’s Prime Minister Naoto Kan and opponent Ichiro Ozawa clashed on the economy and an accord over a U.S. military base on Okinawa in a debate ahead of a ruling party election that will determine who leads the country.
Ozawa criticized Kan for urging his ministers to cut their budget requests by 10 percent, saying he was following the advice of bureaucrats in making decisions. Kan said Ozawa, the party’s top campaign strategist, must explain his role in a funding scandal for which he is still under investigation.
“Focusing on money and numbers is old-style politics,” Kan said today at the debate in Tokyo ahead of the Sept. 14 election to head the Democratic Party of Japan. “Now that he’s in the race, Mr. Ozawa needs to give an explanation that convinces the public.”
Polls show Japanese voters favor Kan over Ozawa by a 4-to-1 margin in the contest, to be decided by party members. The winner is assured of being prime minister because of the DPJ’s majority in the lower house of parliament. The ballot raises the prospect of Japan’s sixth prime minister since 2006.
Ozawa’s policy platform for the election includes a pledge to renegotiate an accord with the U.S. that keeps the Futenma air base in Okinawa over local opposition. Doing so would reopen a dispute that damaged ties with the White House and led to the resignation of Kan’s predecessor, Yukio Hatoyama, in June.
Okinawa Opposition
“Even though there’s an agreement, things can’t move forward because the people of Okinawa are opposed,” Ozawa said. Kan said if Ozawa had a better idea, “he should share it now with the public.”
Kan three days ago unveiled a planned 920 billion yen ($10.9 billion) stimulus to boost employment and help businesses threatened by a strengthening yen and persistent deflation. His announcement came hours after the Bank of Japan said it would expand a bank-lending program to safeguard the recovery.
Kan said he acted in concert with the central bank because of a “sense of crisis” over the yen’s rise to a 15-year high. Ozawa, who yesterday kicked off his campaign by saying he would intervene in the currency markets to halt the yen’s gains, repeated his intention while acknowledging the limits of unilateral action.
“We must stop the rapid rise of the yen by all means,” Ozawa said. “The impact of intervention will be limited without international cooperation, but the rapid surge of the currency now requires the resolve to do so anyway.”
Domestic Demand
The yen’s strength is hurting the profits of exporters, the driver behind Japan’s economic recovery, and Ozawa said he would advocate policies that stimulated domestic demand.
The contest highlights divisions within the party, which took power a year ago for the first time after ousting the Liberal Democratic Party from half a century of almost unbroken government control. Ozawa advocates keeping a DPJ’s promise to increase social welfare spending, including doubling a monthly childcare allowance to 26,000 yen.
Kan, who served as Hatoyama’s finance minister, dropped that pledge in an effort to curtail the world’s largest public debt. Ozawa today said Kan is letting ministry bureaucrats decide policy “just like the LDP did.”
Three of Ozawa’s former aides were indicted in February for violating campaign financing laws. Tokyo prosecutors decided in May not to indict Ozawa after a civilian judicial panel recommended charging him in April. Should the panel re-affirm its recommendation, it would become legally binding.
Ozawa, who has denied any wrongdoing, today said he “won’t run away” should charges be brought. Japan’s constitution prohibits Cabinet ministers from being indicted without the consent of the prime minister.
To contact the reporters on this story: Sachiko Sakamaki in Tokyo at Ssakamaki1@bloomberg.net. Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net
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