Media Conference Call: Sheila Smith on the Japanese Elections (Audio)

JAYSHREE BAJORIA: Good afternoon, everybody, and welcome to this Council on Foreign Relations conference call for a preview of the Japanese parliamentary elections. I am Jayshree Bajoria, a staff writer for cfr.org, the website of the Council on Foreign Relations, and I'm delighted to moderate this call with Sheila Smith, who is our senior fellow for Japan Studies.

Sheila has also just written an excellent expert brief on this watershed moment in Japanese politics, which is now available on top of our site, www.cfr.org. I would encourage you all to go take a look at it for additional background on the forthcoming elections.

So as you all know, Japan will hold its parliamentary elections on August 30th, Sunday, and these elections are being dubbed historic because, for the first time, there is a serious contender to the ruling Liberal Democratic Party, the LDP, which has been in power for -- almost continuously for the last half-century.

According to most newspaper polls in Japan, the opposition party, the Democratic Party of Japan, the DPJ, is set for a landslide victory. So now I'm going to turn it over to Sheila for a few opening comments, and then we'll open it up for your questions.

SHEILA SMITH: Thank you, Jayshree. I'm delighted to be here with you. It is indeed an exciting and somewhat anxiety-producing moment in Japanese politics.

I think we need to understand that the voters on Sunday will be really making one of the most significant choices that they've had the opportunity to make in the last decade or decade and a half. This election, of course, is a big day, but it's also part of the rather agonizing and long, drawn-out process of political reform in Japan that began back in 1993. Since 1993, when Ozawa Ichiro led some of the conservatives out of the LDP, there's been a kind of kaleidoscopic alignment or realignment of politicians and new parties arising and disappearing.

But the real crux of the story here for the Sunday election is really the demise of the LDP as an electoral -- electorally dominating force in Japanese politics, and in the -- on the other side, the flip side, the birth of a new serious contender, as Jayshree said: the Democratic Party of Japan.

The DPJ has been 11 years or so in the making. It has been a very tough process to build a second viable party in Japan. And on Sunday it looks like the Japanese voters, at least according to the polls, are going to give the DPJ a fairly significant majority in the lower house of parliament.

The DPJ has kind of wrested the mission of reform out of the hands of the LDP. Many of you who follow Japanese politics remember Mr. Koizumi, the prime minister from 2001 to 2006, who came into office with a broad and very deep level of public support, and his mantra was reform. He talked about economic -- structural economic reforms. He wanted to first of all change the banking system, et cetera. But he really went about it in an unusual way. He focused first and foremost on really reforming his own party and breaking the ties of some of the old faction leaders and their vested interests of support.

So now, today, the LDP has been shunted aside, in a way, and it's the DPJ who carries forward this banner of changing the Japanese political system, and "sankin kotai" or alternating parties in power is really their idea or their prescription for how to change Japan.

So what they're looking at is not just individual policies where they differ from the LDP. They're really looking at a systemic change in Japan's governance. They want to change the -- change a lot of the practices that were associated with the 1955 system or the period of LDP dominance. They want to get rid of some of the influences of the vested interests that are long associated with that long single-party dominance period -- corporate interests, agricultural interests, the bureaucracy. And they want to transform politicians from being -- sort of sitting on top of this triangle of vested interests to being direct representatives of the citizens of Japan.

The brunt of their criticism in this campaign has been directed at the bureaucrats. That's not unusual. Koizumi used the same technique. But they're looking at -- really at sort of getting rid of some of the privileged practices of allowing the bureaucrats to go into private-sector practice, to really create an agenda for the policy-making in the Japanese state. So they really want to take away that role for the bureaucrats and take it into the hands of the political elite.

As citizen representatives, I think, you know, you -- this sort of idea of a Japanese citizen being at the forefront is written throughout the manifesto that the DPJ put forward a month or so ago. They really want to talk very specifically about the daily lives of Japanese citizens. They're talking about job -- employment opportunities.

They're talking about the very important social insurance structure in Japan. So they're talking about a lot of issues that would sound very familiar to an American audience. Pocketbook issues. Household issues. And of course, Japan's aging society makes many in Japan very worried about the pension system, about what kind of health-care system they're going to have in the decade to come.

A little bit harder to tell, but we have a little bit of some hints, but is the foreign policy impact. I think there's two ways to think about this, and the first, of course, are the very clear differences that the DPJ has already signaled in terms of the way they would like to pursue Japan's foreign policy.

Here in Washington I think most people are somewhat intrigued by the use of the word "equal" to describe the way they want to approach the U.S.-Japan relationship. They see, I think, this idea of an equal relationship with Washington as being a corrective to the past LDP's kind of giving Washington too much say over Japanese foreign policy choices. And they're very specifically interested in alliance management practices, things having to do with the U.S. military presence in Japan.

But I think there's a broader philosophical approach that we should be alert to here. It's not just about some of the critiques of the way the U.S.-Japan relationship has been handled, but rather -- and I think many of you have read the New York Times op-ed by Mr. Hatoyama, and I think this kind of gets to some of the philosophical differences that the DPJ may be bringing to the table on foreign policy.

I think he's basically articulating the idea that, you know, the U.S.-led sort of Pax American world is now coming to an end. Very specifically, he talks about the economic crisis and the kind of unrestrained capitalism that the United States has put forward in global economic management practices.

So I think you're going to see here a really serious development on the part of the DPJ of some specific policies that may run counter to his predecessor, Prime Minister Aso.

He really does talk also in his op-ed -- and I think this is an important part of the DPJ's foreign policy agenda -- he talks about locating or situating Japan within an East Asian community. And I think he uses the phrase, you know, East Asia should be Japan's basic sphere of being. It's very interesting language for a political leader. But I think what he's articulating today and many in his party have articulated in the past is that Japan needs to rebalance its diplomacy and become much more engaged with its neighbors in the development of an Asian identity, including an institutional identity.

So I think we're going to have some interesting ideas coming out of the DPJ on the foreign policy side. But for the moment, I think all of us are focused on the process of transition and this kind of watershed moment in Japanese political behavior.

BAJORIA: Sheila, thank you so much for such an excellent overview. Let me start with asking you the first question about the very political transition that you were talking about. You mentioned that the DPJ wanted to bring about a systemic change in governance and we might even see an emergence of the actual, you know, alternative -- alternating, two-party system in Japan, if the DPJ really wins. But Japan is not really used to regular political transition. And even in countries used to this system -- such as, say, the United States -- every election one asks how the new government will be different, or whether this will be more of the same.

In that context, how much of real reform are we going to see if the DPJ comes to power? And what are going to be some of the new challenges to cope with this change in political system?

SMITH: Well, I think that's the question on everybody's lips, frankly. (Laughs.) It's hard to tell. And I think for, you know, most of us who study Japanese politics and have been watching to see -- we read the policy manifestos of both the DPJ and the LDP, as well as the more detailed policy platforms that support it. There are some very clear differences. But I think the real issue here, and the claim of the DPJ, is to change the way in which governance is done in Japan.

And so I think that's going to be something to pay attention to. How are they going to work out a different relationship with the bureaucracy, for example? How are they going to do that, but still maintain the trust in a -- in the sort of main policy instrument, or agency, of the Japanese government? There are a lot of questions about just how dramatic a change they want to make in that relationship between politicians and bureaucrats.

I think, going beyond that, though, I think on the transition itself, the very short-term transition, you know, we've sat here in Washington just watching the Obama administration transition into power. And you know, at the working level and the foreign policy realm at least, and in other agencies as well, some people are still getting into position. So it took six months or so for this administration here to get people in place, to gets its ideas organized and to really sort of get some traction on the agenda that it had put forward before being -- you know, before being elected into office. I expect that in Japan, we're going to have to take a little bit of time, to watch how the DPJ wants to manage this transition.

It is historic in the sense that we don't have a lot of examples to look back to, in terms of how Japanese transitions take place. But I expect that there will be a lot of -- there will just be a lot of energy dedicated to getting people in place.

One of the things I think is going to be very interesting is to see who the cabinet members are going to be. We don't know who is a contender for the positions of finance minister, for example, or foreign minister, two key positions that would be of interest to us here in Washington.

But I think that will be the first moment, to get a little indication of the priorities of the DPJ. Once that cabinet is picked, then becomes the sort of -- the negotiations with the bureaucrats and others, about what policy priorities need to move forward first.

And that is another -- you know, by the time this will be -- we'll be in October, I think, before we'll really understand, you know, what are the key issues on the agenda that the DPJ wants to address first. We have a broad set of issues that the DPJ has put forward for us, much of which has to do with social insurance and welfare infrastructure, domestic changes, for example.

But on the outside of Japan, you'll have a United Nations General Assembly meeting, a climate change summit, a nonproliferation summit. You'll have the G-20 meeting in Pittsburgh. There will be lots and lots of moments where the DPJ will be required to articulate its policies, perhaps much earlier than gentle transition would allow.

BAJORIA: Thanks, Sheila.

We have a very good turnout for this call. So I would like to turn it over to the reporters, for questions for Sheila. So I would ask the operator to queue the reporters in. And we'll go straight to their questions.

OPERATOR: Ladies and gentlemen, at this time, we will open the floor for questions. If you would like to ask a question, please press the star key, followed by the one key, on your touchtone phone now.

Questions will be taken in the order in which they are received. If at any time, you would like to remove yourself from the questioning queue, please press star-two. Again that's star-two. Please limit your questions to one at a time, please. Again to ask a question, please press the star key, followed by the one key.

Our first question will come from Jonathan Tepperman with Newsweek.

QUESTIONER: Great presentation. I'm just curious if I could get you to give us a slightly clearer take, if you have one, on how optimistic or pessimistic you are about the DPJ making real changes any time soon, given -- you know, there are a lot of reasons to be pessimistic, including the fact that some of these guys are ex-LDP members, that some of them are also hereditary pols, which is one of the factors that's often cited when the sort of general malaise in Japanese politics is discussed. A lot of these guys are novices and have never held high office before. And then, you know, there are all the other reasons why it's -- Japan proves so difficult and resistant to reform.

SMITH: It's a great question, and I think none of us really know the answer, which makes it -- I think I'm a little bit more optimistic, over the long term. And I should say, just to give that a little context here, you know, we're all watching the Japanese media's day-to-day polling data on, you know, trying to guess how big of a victory the DPJ's going to have, and you know, today we're somewhere between 300 and 320 seats in terms of what we think the DPJ's going to garner on Sunday. So conservative estimates give them 300.

That's a particularly large victory. I think there is no coalition dynamic there. There's a -- they have a lot of latitude, and it also suggests to me that they'll be in power for four years -- three or four years.

So I think what many people were thinking was that if -- you know, they would squeak through a win and they'd only be in power for a year, we wouldn't see real change. In other words, they wouldn't have enough time to get some traction.

I think all of the weaknesses that you suggest, particularly the fact that the -- many of the DPJ -- individuals in the DPJ have never served in government before, the DPJ itself has never held power, you have a lot of the same patterns of political representation that you might see in the LDP, all of these factors matter.

But I think what really, really matters is how organized -- how quickly the DPJ can organize itself to implement some of the governance changes it puts forward. These are changes, for the most part. The relationship between bureaucrats and politicians, cutting down the size of government, getting rid of waste in government -- in other words, you know, going through the budget and getting rid of things that, you know, taxpayer money shouldn't be spent on -- these are all reforms that will take them several years to implement.

So to have any real impact -- and I think that's what we mean by real changes here -- this idea of a 300-plus-seat victory for the DPJ makes me slightly more optimistic, because a lot of what they're trying to do will take time, and their time in office is really what matters here.

I think the experience is going to come. It may be a bit of a bumpy ride in the first year or two. But I think after that it'll smooth itself out just a little bit.

BAJORIA: Thank you. Can we go to the next question, please?

OPERATOR: Thank you. Our next question will come from Chandrakant Pancholi with Overseas India Weekly.

QUESTIONER: Oh, hi. Let me just divide this into three parts, Sheila, about economics, agriculture and politics. What type of economic changes do you think will take effect? Because Japan is dominated by corporations and big banks. And will they allow any changes to be made? Do you think that the agricultural policy will remain the same? And how -- what is the viewpoint in case of regime change about Russia, about China, and about Korea, both North and South?

SMITH: Thank you. Those are all great questions, very big questions on it. Let me try and give you a little sense of what I understand; I'm not sure I can add all of the texture that you need there.

But on the economy, I think there's two things that I hear from the Japanese business sector about concerns about the DPJ and their manifesto as it's been put forward. The first is, you hear an awful lot about DPJ policies on labor. I think there is a very clear indication from the DPJ that they want to diminish corporate Japan's ability to use part-time labor where it doesn't have to -- you know, it doesn't have to give benefits, et cetera, et cetera.

So part of their overhaul of the social insurance or social welfare system really has to do with protecting or giving to people who in today's Japanese market don't have protections -- greater access to benefits and insurance and those kinds of things.

So I think there's a bit of a concern in the corporate sector there about the costs of that and who's going to bear the brunt of the costs.

I think the other big question I would have -- and that I'm not very clear on -- and that is DPJ's growth strategy. A lot of what they're doing -- and it sounds very similar, to me, in some ways, to the early Clinton-Gore years in the United States, which is small government, get rid of waste, get rid of the deficit, you know, reduce the tax -- you know, the burden, as much as you can, on the citizens' taxes and raise it in the corporate sector. That kind of re-calibration is fine when you're sitting in a moment where there is a certain amount of economic growth. But today that's not where Japan is sitting. That's not where any of us are sitting, frankly.

And so I think one of the questions for me that I would like to understand better from the DPJ is where they are identifying as areas of potential growth, how are they going to navigate investment in future technologies, where do they see the engine of growth for the Japanese economy, and not today or tomorrow, but in the next year and several years to come. So I think that's one of the questions that I think they haven't answered very well.

On agriculture policy, I'll just apologize, because I am not an expert on agricultural policy, and that's not an area of the DPJ's agenda that I'm all that familiar with.

I do know, though, in the electoral contests of 2007 and again today, that they have done an awful lot of campaigning in Japan's rural areas. And I think one of things that Mr. Ozawa has brought to the DPJ is an awareness of the need to deal with Japanese farmers, to make sure that rural areas don't feel that they are bearing the brunt of an economic reform process that Mr. Koizumi had laid out in the early part of this decade. So I think at least as a political stance they argue that they will protect farmers, that they will protect rural households, and they won't have rural communities bearing the brunt of transformation of the economy.

The politics aside, I think that most of your questions really had to do with foreign policy. I don't know that they have a specific policy towards Russia.

I do on China understand that, you know, Mr. Hatoyama in times past has been very clear -- and, I think, Mr. Ozawa as well -- that Japan's future strategic health, if you will, has to depend on a good working relationship with China. And I think that the DPJ brings to this equation a little bit more interest in trying to navigate with China in a more constructive way than, let's say, has been done in the past five or six years in Japanese foreign policy.

I would look to see, I think, historical reconciliation on some of the history issues. Outstanding history issues seem to be of interest to some individual DPJ members. But I don't -- beyond that, I think they really just want to rebalance Japan's attention, and China looms large in that calculus.

The other countries -- you had one other country in there, and I don't remember what it was right now. But I do think, in terms of their focus, Northeast Asia -- or East Asia is going to be, I think, very high on the priority list of this new government.

BAJORIA: Thank you, Sheila. Could we go to the next question, please?

OPERATOR: The next question will be coming from Claire Ko, with Chinese Media Net.

QUESTIONER: Oh, hi. You've mentioned the Japan-U.S. and Japan-China relations. Could you also talk about the Japan-Taiwan relations?

SMITH: Ah, that's another area. Thank you, that's a very good question. That's another area where I'm not quite sure that the DPJ has a very clear statement of its policy agenda. When they talk about China, they're talking very clearly about Mainland China and the relationship with Beijing. And so I think that Taiwan policy -- and I'm guessing here, because I don't think they've been very specific about this -- that Taiwan policy will be -- will derive from their relationship with the Mainland, rather than have a separate sphere.

One thing, though, to alert you to, that I -- would be interesting to ask once they come into power: Mr. Hatoyama's idea of an East Asian community does talk about smaller East Asian countries and their concerns about China. And so I -- in the spirit of developing that East Asian community, I would be curious to see how he would view the partnership with Taiwan.

BAJORIA: Thanks again. Could we go to the next question, please?

OPERATOR: The next question will be coming from Satoshi Ogawa with the Yomiuri Shimbun.

QUESTIONER: Hello.

SMITH: Hello.

QUESTIONER: Hello. I would like to ask, the U.S.-Japan alliance issues.

SMITH: Okay.

QUESTIONER: The DPJ has called for more independent relationship. And on the other hand, and in the general election manifesto, they showed modified revised stance, so they -- so how do you assess the DPJ U.S.-Japan relations policy? And how long will it take for the DPJ to adapt from the opposition party to the leading party?

And how patient do you think the Obama administration will be as the DPJ makes such translation -- transition? And the last question is, what is the first -- what do you think is the first challenge for DPJ government with Obama administration?

Thank you.

SMITH: Thank you. A lot of good questions.

I think at least rhetorically, the independence -- my sense of the DPJ has been that they have wanted to put a little distance between Tokyo and Washington. And I think that comes out of what we see in a lot of other U.S. alliances, a kind of reaction to the Bush administration, the idea that Japan was just doing what Washington said.

And, you know, again, we saw this in British politics, we saw it in Australian politics. I don't think this is unusual. So my interpretation is a little bit of that. It has that flavor to it, to me.

In the manifesto, they spoke about equal relationship. And again, I don't think there's many in Japan who would take issue with that, nor do I think there's many of us here in Washington who would take issue with that. The question is how they want to see that equality demonstrated.

And I think that's where what we understand so far from their public statements is the U.S. military presence in Japan is a source of aggravation for the citizens of many local communities. So I sense from them that that's a real focal point for them. They want to change from the alliance management practices having to do with the U.S. presence there; host nation support, the Status of Forces Agreement, for example, as well as there's some dissatisfaction, I think, with the current realignment of U.S. forces, particularly in Okinawa.

I think the equality issue is not something that I see this administration in Washington, the Obama administration, having much worry about, even with -- either rhetorically or in policy practice. I don't know that there's a lot here that we're going to find problematic. I think the first cut is really going to be to understand where the DPJ wants to institute changes. Again I think a lot of this has to do with military cooperation.

But I think a more important factor here is going to be how the DPJ identifies where it does want to work more closely and effectively with Washington. And so that agenda, I think, is as important as where they want to change the practice's agenda.

And so I think we're looking here towards perhaps climate change and energy issues, perhaps different kinds of economic cooperation. That remains to be seen. But we're trying to find DPJ statements about how that equality in the relationship will be manifested. And I think we'll have to wait and see.

From being a political party to being a governing -- to being the government, of course, again this transition is very difficult to gauge. Parliamentary systems are different from our presidential system over here.

Typically in parliamentary systems, it changes, you know, virtually overnight. But it's a two-or-three-week process, as opposed to a four-or-five-month process, which is what the U.S. has. I think it's going to take a little while.

I think by the end of this year, we're going to have to look back and gauge how effective they were in, you know, translating themselves into -- transferring themselves into a governing party.

One thing of course that everybody will be looking at is this idea that there are great divisions within the DPJ, divisions of ideas and preferences. And you hear a lot about that in the press.

I think that will -- the extent that those divisions exist -- what people will be looking for is how much that kind of ideological division or pragmatic divisions in the party will really affect their capacity to govern. And I would imagine by the end of this year, we'll have a good sense of that.

In my expert brief, I suggested that the Obama administration needs to be patient. How patient is a good question. My guess is that there will be -- there will be events that happen, that the Japanese government will need to respond to. I noted a couple of them on the diplomatic side.

I think economic cooperation, I think, is going to be the serious challenge for the Obama administration and the new DPJ government. And that's why I think Hatoyama-san's tone in that New York Times op-ed piece sort of signals to me that this may be more of a challenge than perhaps we've been ready to acknowledge.

In that op-ed piece, to me, he sounded a lot more similar to some of the European leaders, and their ideas that they brought to the G-20 meeting, than they sounded like, you know, his predecessor, Prime Minister Aso.

So DPJ positions -- on, you know, support for the IMF, support for current institutions of global economic governance; how they feel about financial regulatory changes; how they feel about their own economic stimulus and their responsibility for global growth -- those questions suggest to me that -- those questions are going to be critical not only in Pittsburgh but beyond.

And I think, I think, we're hearing perhaps that they may be changing some of their stances. So I think that's going to be the first area of challenge.

BAJORIA: Sheila, thank you so much for your comprehensive answers on all those questions.

Could we go to the next question please?

OPERATOR: Yes.

Before we get to the next question, I just wanted to remind everyone that if they would like to ask a question, to press the star key followed by the one key on their touchtone phone now, to enter the question in queue.

And our next question comes from Jim Landers with The Dallas Morning News.

QUESTIONER: Could you elaborate a little on what your concerns are about the DPJ's views of the U.S. military presence in Japan?

SMITH: Absolutely.

They've been -- for the last several years in repeated manifestos, which come out every year, they've been very clear that they do not support -- they would like to revise the Status of Forces Agreement, which is the administrative framework for the U.S. presence in Japan.

They take issue with host nation support, which is the Japanese government's financial contributions to paying for U.S. forces stationed in Japan. And they also believe that, in the current realignment plan that the U.S. and Japanese governments have negotiated -- they don't like the solution, particularly the solution in Okinawa of relocating Futenma Marine Air Station, which is a base that's in the middle of a very densely populated residential area.

They don't like that, the relocation plan for that base. The current plan is attempting to relocate the Marines to the northern part of the main Okinawan island, which is a very small island. And the DPJ has advertised that it would say no to that and that it would remove -- would like to remove that base to a place outside Okinawa. As we've gotten closer to Sunday's election, however, there has been kind of a softening of the tone on some of these issues. I think the message that many are hearing is that the DPJ is -- sees SOFA revision as a longer-term project, not something they're going to take up right away.

Likewise, host nation support has just been renegotiated between the two governments, so there's not -- they haven't said that they're going to oppose the current agreement that's just been concluded. But Futenma relocation, I think there's a question mark here about how the DPJ is going to move on that issue.

BAJORIA: Sheila, if I could step in there a little bit and ask you about -- even though, you know, there have been some concerns about how the -- a DPJ government is going to respond to the U.S.-Japan military alliance, there have been growing concerns in Japan about North Korea's nuclear program. There have been calls for revision of the Article 9 of the constitution.

In your opinion, do you see, you know, a revision of the constitution or Japan actually taking a more proactive role in its own -- you know, in trying to strengthen its military capabilities, and how that's going to play with its U.S.-Japan military alliance?

SMITH: Well, there's two things to think about here. One -- many of these issues that have to do with the U.S. military presence are really procedural issues about how the military -- U.S. military gets managed. And I think the DPJ has come at this from a very citizen-oriented point of view -- in other words, looking at it from the positions of the local communities that host these forces.

I think on the broader question, which is -- many of your questions are really about, is -- larger question of Japan's strategic needs. This is where the DPJ is perhaps most silent, and I think for most of us on the outside we find this quite puzzling. But I think the strategic assessment -- their sense of what Japan needs in terms of military capabilities, in terms of joint operations and planning with the United States, et cetera, all these things are, as yet, not clear.

This year the Japanese government went through its regular process of review of what's called the national defense program outline, and that is really -- it's a little bit like our QDR process in the Department of Defense. It takes a real good look at Japan's, you know, strategic priorities and what forces, capabilities it will need to meet those challenges.

That is supposed to be adopted by the government in December of this year. It's not clear whether or not the DPJ is going to approve the current document review or if it's going to postpone it for another year so it can put its imprint on the process.

On the North Korean issue, of course that's the question of the day, given that the North Koreans have conducted the second nuclear test and, again, a Taepo Dong missile test this year. The DPJ has in the recent manifesto come out and said it supports strong sanctions against North Korea, but in terms of its strategic needs, what kind of capabilities and cooperation with America it suggests is necessary, that's unclear as well.

So I think on the political side, constitutional revision is off the table. This is not a party that supports constitutional revision. I think this is a party also that is even hesitant to interpret the constitution to allow for joint U.S.-Japan operations beyond the task of defending Japan. But I think they see a U.N. Security Council-, kind of, -centric idea about where Japan should be working globally with its military forces.

But I think what we're really missing here from the DPJ -- and this is something that our government, I think, will be watching for in the months to come -- is a really much more clear understanding of their strategic vision to support the kind of foreign policy vision that they've put forward.

BAJORIA: Thanks, Sheila.

Could we go to the next question, please?

SMITH: Absolutely.

OPERATOR: And the next question will come from Chandrakant Pancholi with the Overseas India Weekly.

QUESTIONER: Oh, hi. Let me just put up a follow-up question. Russia is administering some northern islands which Japan is claiming as their own. What will be the attitude of this party over that; more aggressive or just remain silent?

And in the (broader base ?), we have U.S. bases there and most of the time they want local laws to be applied to U.S. military. And do you think we can ever agree to that? And thirdly, do you think there wil be an arms race between China and Japan to have a superiority in Asia?

SMITH: Thank you. Very good questions.

The Russian question, again, I don't see that the manifesto is very clear on that. The northern territory issues, of course, is a territorial dispute that's been going on now for -- ever since the end of World War II. And I doubt that the DPJ would be willing to give up Japan's stance on the northern territories, the sovereignty claims on the northern territories.

I think the issues with Russia, frankly, are going to be more economic and energy related, and I think the -- that compromise on the northern territories of at least trying to find ways of, if not clarifying the territorial dispute, at least working together in energy -- common energy needs is one of the ways the Japanese government has pursued the relationship with Russia.

I think that the bigger issue, though, about Central Asia and how Japan's foreign policy has been under both Koizumi, and later Aso, has been very focused on, you know, getting alternative sites or alternative access to energy resources in Central Asia.

And that'll be an area where I wonder -- I'll be curious to see whether the DPJ is as enamored of that kind of diplomacy. My sense is no, that they won't. But on the energy side, Japan has significant needs, and I think the DPJ will be cognizant of those needs in its diplomatic engagement with Russia.

U.S. bases, you're absolutely right. I mean, the status of forces agreement idea is all about where U.S. military personnel are excluded from Japanese national laws or, you know, get a fairly privileged treatment under those laws. I think, for now, I would hazard a guess that one of the things that has been most sensitive inside Japan, and indeed, inside any other country where U.S. forces are stationed, of course, is crimes and incidents that are caused by U.S. military personnel. And so criminal jurisdiction issues have been a major focal point to public sensitivity. Unless there's a major incident and another kind of situation that we've seen similar to the 1995 rape in Okinawa, I don't know that SOFA revision is going to be high on their agenda.

What is on the agenda for that, in a legal treatment of U.S. bases, is environmental issues. So if you're sitting in Okinawa or Kanagawa prefecture or other places where U.S. forces are in large presence, environmental impacts are a large part of citizen concerns about the U.S. military presence. So that may be one area where we see the DPJ moving forward.

China-Japan, absolutely. I -- as I read Hatoyama's -- President Hatoyama's statement in the New York Times, one of the things that crossed my mind is he alludes to the rise of China as one of the reasons that is driving Japan's sort of idea of an East Asian community. And this sort of pan-Asianism idea, I think, suggests still that there is a certain amount of concern that the DPJ will have about Chinese influence over Japan's backyard, so to speak.

So I don't know if it's going to be a full-on competition with China, but I think at least this idea of pushing regionalism, East-Asian regionalism, more forcefully on the part of the DPJ is a counter to the extension of Chinese influence in Asia.

BAJORIA: Thank you, Sheila.

Shall we go to the next question, please?

OPERATOR: There are no more questions at this time.

BAJORIA: Well, Sheila, let me ask you -- till we wait if someone else wants to ask a question -- you talked about how DPJ wants to change the governance system in terms of its relationship with the bureaucracy. You've talked about this in the expert brief, as well. How do you think -- you know, what is going to be the challenge in terms of where new policymaking ideas will come from? Because from what I understand, the bureaucracy is responsible for a lot of the policymaking that we've seen in Japan under the 1955 system.

So, what are the things that you think the new government will need to do in order to be -- in order to change their system to work effectively?

SMITH: Well, I think this is going to be an interesting -- that's going to be one of the most interesting parts of the initial period of the transition for me. In the campaign mode or in, you know, earlier days, you had all kinds of ideas put forward by the DPJ that it would adopt a system where the senior bureaucrats would all tender their resignations and the DPJ might appoint political representatives at the highest level of Japan's bureaucracies.

There's a little bit of a problem with that under Japan's civil servant law, so they're not going to be able to chop off the heads of the top of Japan's entire bureaucratic system. But I do think the personnel issues will be interesting to watch. And this is where you get into the day-to-day who's who of DPJ preferences within the senior leadership of the bureaucracy.

Beyond that, though, these larger systemic kind of changes that you alluded to, I think the party itself has a staff that it is building. And I think the idea here is that they want a much more policy-oriented staff inside the party to support the politicians.

I think another area where I think we'll see the DPJ being very supportive is in the development of institutions such as nonprofit think tanks, policy analysis types of place -- you know, vehicles that we see here in the United States. Part of the change that will need to happen here is tax. The tax system will need to allow greater space for that kind of nonprofit world.

But I think we're going to have to -- it's clear to me, anyway, that the party -- just changing one party in power doesn't necessarily change the way that policy is made. And policy analysis has long been the purview of the Japanese bureaucracy. They've had a monopoly on information in many ways. They have the best and broadest policy experts that come to the task of policy development in Japan. So developing these alternative sites of policy expertise I think over time is going to be one of the key questions of the -- you know, it'll be one of the key issues for the DPJ, but also one of the key issues, I think, for the Japanese political system.

BAJORIA: Thanks, Sheila. One other question: if you want to talk about Japan's role, international role, in the future. You know, there has been some concerns about, you know, Japan does not play a role that befits the fact that it is the second-largest economy in the world. There have been some talks about, you know, it being -- it emerging as a middle power, or even as, you know, becoming sort of the Switzerland of the East.

What do you think Japan is going to look like, you know, if this political transition happens and if we do see a more of a, you know, alternating two-party system? How do you see Japan sort of, you know, take -- the vision that it's going to have and the role it's going to play locally?

SMITH: Good question. (Laughs.) I'm not sure that I have any insights into DPJ thinking, but two things. One, it is indeed the second-largest economy, but there's a -- pretty soon, there's the idea that China will replace Japan as that -- in that material status.

But the larger philosophical question that you're asking about, you know, how does Japan identify its role -- I think more and more in Japan these days, I hear the idea that Japan should be, if not a middle power, at least it's not a great power. It shouldn't be the economic superpower kind of vision, and we shouldn't -- we as in we in the United States or outside of Japan -- shouldn't have that expectation of Japan. That's just, you know, constitutionally what Japan is not is not a great power.

On the other hand, you've listened to Mr. Abe and Mr. Aso and many others in Japan articulate a very different perspective, which is that Japan is a global power -- they may not say a great power, but it is a major power -- and that Japan should be much more actively engaged in the geostrategic world.

So I think much of what you're hearing here is a kind of philosophical difference between those who are more kind of institutionally oriented, they'd like to see Japan engaged in multilateralism, they'd like to see Japan build East Asian community. That perspective is very much in concert with the DPJ's approach as I understand it. I don't hear many individuals in the DPJ talking about Japan as a major power or even talking in that more realist tradition of international relations and geostrategic terms. That's not the language that you hear coming out of this political party.

BAJORIA: Great.

Are there any other questions at this time?

OPERATOR: We have no other questions at this time.

BAJORIA: Well, thank you, everyone, for excellent questions, and Sheila for a very insightful account of what this election may bring and laying down the policy implications of a DPJ win.

I thank you all for being on the call. As I mentioned before, Sheila has an expert brief that gets into many of the issues that were raised today, in today's call. It's titled "Japan's Moment of Choice." There is also a new backgrounder on the DPJ and the rise of political opposition in Japan that might be a useful resource for you.

Also, a reminder that the audio and transcript of this call will be available later on the council's website, www.cfr.org. Goodbye and good luck with all your stories.

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