- December 2022 (1)
- March 2022 (1)
- January 2022 (1)
- November 2021 (1)
- October 2021 (1)
- September 2021 (2)
- August 2021 (4)
- July 2021 (3)
- June 2021 (4)
- May 2021 (5)
- April 2021 (2)
- March 2021 (5)
Change of era in Japan
What is expected happened. Liberal Democrats that have been ruling the country for almost five decades lost the elections in Japan. Now, Democratic Party of Japan will rule the country. In 2005, Liberal Democrats headed by former Prime Minister Junichiro Koizumi won the victory. Now, Democratic Party of Japan achieved a huge success: it took 308 out of 480 seats. In fact, expiry date of Liberal Democrat Party (LDP) had long passed. But it took a decade for the known one to become true. Why? When in the United States of America (USA) the office was taken over from Republicans to Democrats, we did not interpret the issue as "the economic crisis is shaking ruling parties". Republicans had more than one reasons to leave the office. So, can we put forth the same argument in the case of Japan? I guess no again. Liberal Democrats had more than one reasons to miss the office. If you rule a country for five decades, you get enough time to have more than one reason. But the issue is also closely related with economy. Economic crisis in Japan did not start recently; it started in 1990s. Japan is already in a period of recession for two decades. In that case, is it necessary to conclude that "it might take two decades for ruling parties with no alternatives to leave the office even if they become dysfunctional"? Let us see.
First: LDP experience never resembles Turkey's experience. Japanese LDP is a political party that contains more than one group. In Turkey, however, there are no political parties in the commonly known sense. So-called political parties of Turkey are public relations office built upon the image, charisma and power of their leaders. Therefore, please do not wonder "In Turkey, how long does it take for political leaders whose "date of expiry" has passed to leave the political arena" relying on the Japanese experience. This is the first point you must keep in mind when reading this commentary.
Second, thanks to Koizumi period, LDP's time at the office was extended in spite of the climate of economic crisis in 1990s. Koizumi was the leader of the LDP and the Prime Minister from 2001 to 2006. He had taken a series of steps for structural reforms including the privatization of Postal Administration which has a structure different than the system in Turkey and which has an important position in Japanese financial system. The measures did not ensure recovery from the economic crisis, but extended the period of LDP at the office as it strengthened the "finally something is done" image. And in 2005 elections, LDP headed by Koizumi won one of the biggest victories in Japanese history. However, LDP has tripped day by day since his retirement. So, what is the issue? The extension LDP gained in the mid 2000s was the excitement for the new leader. And this is the second point of the day.
Economic crisis of Japan is an extended period of recession. Japan has been living what the world has learned with the 2008 USA crisis since 1990s. Paul Krugman's evaluation that Japan experience must be examined to understand the dynamics of this new period of economic instability is of great importance in this regard. Japan has been living for nearly two decades the problems we currently live such as non-growing economy or rising unemployment. Maybe, we had better name the situation as follows: Economic crisis taking the form of recession damage ruling parties not overnight; the damage is made for a long period even for the parties that have expired. It will be wise to collect data on this topic.
Fourth point in this context is related with the news on Turkey published on New York Times this weekend. The news said that the positive climate created in America by the shaping up of the incentives of bank officials and investors more harmoniously started to have a positive effect in Turkey. Apart from this, the news emphasized that Turkey made a risky bet in not signing an agreement with the IMF, but luckily win the bet. Stock exchange was rising; interest rates were decreasing and cash flight seemed unlikely. Turkey made a bet, but at the end won it; everything was moving back to track. But, is it that clear-cut and easy? To what extent the economic condition and recession be understood solely examining the old crisis indicators? Let us put forth the fourth point together. When trying to interpret the current political climate and to decide who succeed and who failed, we had better use the economic paradigm of the day rather than yesterday.
Paradigm of the day for Turkey is closely related with recession as it was in Japan. It seems quite difficult to understand the day without changing our paradigms. We had better evaluate Turkey's not signing an agreement with the IMF. To whom this might concern.
This commentary was published in Referans daily on 01.09.2009