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OO RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHOK #0187/01 2120120
ZNR UUUUU ZZH
O 310120Z JUL 07
FM AMCONSUL OSAKA KOBE
TO RUEHC/SECSTATE WASHDC PRIORITY 0874
INFO RUEHKO/AMEMBASSY TOKYO IMMEDIATE 8011
RUEHKSO/AMCONSUL SAPPORO PRIORITY 0197
RUEHNAG/AMCONSUL NAGOYA PRIORITY 2299
RUEHFK/AMCONSUL FUKUOKA PRIORITY 0185
RUEHNH/AMCONSUL NAHA PRIORITY 0208
RUEHBJ/AMEMBASSY BEIJING 0414
RUEHUL/AMEMBASSY SEOUL 1120

UNCLAS SECTION 01 OF 03 OSAKA KOBE 000187 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON JA
SUBJECT: UPPER HOUSE ELECTIONS: A VOTER REVOLT IN 
WESTERN JAPAN 
 
 
¶1.  (SBU) SUMMARY: Voters in western Japan lashed out 
at the ruling LDP coalition in last weekend's Upper 
House elections.  This anger stems from several factors, 
including resentment of the LDP's tax policies, especially 
a number of governmental blunders that increased the 
tax burden of traditional LDP supporters prior to the 
elections.  The LDP was also hurt by Prime Minister 
Shinzo Abe's inadequate explanation of his economic 
reform agenda. Seeking change, conservative voters 
turned to young opposition candidates who often lacked 
negative political baggage.  Several politicians who 
were expelled from the LDP for opposing former PM 
Koizumi's postal reforms staged their revenge on the 
coalition, greatly diminishing the influence of several 
party heavyweights in the district.  Finally, the 
opposition ran a smart campaign that drove deep into 
traditionally solid LDP territory.  END SUMMARY 
 
IT'S THE ECONOMY, STUPID 
------------------------ 
 
¶2. (SBU) In both rural and urban areas of our district, 
it was economics, largely tax issues, that caused such 
fury among voters and did in the Liberal Democratic 
Party (LDP) in Upper House elections on July 29. 
Elderly farmers, always reliable LDP voters, were 
already angry over encroachments on their protected 
status after former PM Koizumi's economic 
liberalization programs.  But SMEs and merchant 
associations also reported to us in Osaka, Nara and 
Okayama that they were fed up with LDP tax policies, so 
they did not vote for the LDP.  Importantly, they 
stated that they may continue to withhold support for 
the LDP, depending on the party's future tax policies. 
It was the end of popular tax breaks, the increase in 
local taxes, the rise in pension premiums and, lastly, 
the infamous pension payment fiasco, most of it 
unfortunately occurring close to the elections, 
that created the perfect storm of a taxpayer's revolt 
against the ruling party. 
 
¶3. (SBU) According to local media reports and 
conversations with econoff after the elections, Osakan 
corporations and large business organizations have 
begun asking politicians from the LDP and the DPJ to 
work together in a cooperative and practical manner so 
that important economic reforms are not derailed. 
Priority issues for these organizations are structural 
reform, tax reform, a reduction in government spending, 
public pension reform, and a restoration of the 
public's trust by stamping out political money scandals. 
Although large companies are disappointed by the LDP's 
historic defeat, executives were not exactly surprised. 
According to one interlocutor, PM Abe's economic 
policies have been unclear from the beginning, and thus 
difficult for the general public to support. 
 
YOUNG NEOPHYTES TRIUMPHED IN CONSERVATIVE DISTRICTS 
--------------------------------------------- ------ 
 
¶4. (SBU) Six out of our thirteen single seat district 
races were won by young political neophytes from the 
opposition Democratic Party of Japan (DPJ) and People's 
New Party (PNP) in Kagawa, Kochi, Okayama, Shimane, 
Ehime, and Toyama.  These are among the most 
historically solid conservative regions of our district. 
Kochi was a toss-up until the end, but it was still 
surprising to see the LDP completely lose the island of 
Shikoku for the first time in the party's 
existence.  In addition, 32-year old Satoshi Umemura, 
a political newcomer running on the DPJ ticket in Osaka, 
was the top vote-getter in the entire country.  The 
single seat matchups were inevitably between a very 
old LDP incumbent and a youthful opposition contender - 
- not exactly good optics for the ruling coalition. 
Conservative and elderly voters sought change in 
western Japan.  Although this backlash and search for 
policy change could be a statistical blip, it could 
also turn out to be the beginning of the end of the so- 
called rural "conservative kingdoms" of western Japan. 
 
¶5. (SBU) Traditionally, the Communist or Socialist 
parties have been the beneficiaries of voter backlash 
 
OSAKA KOBE 00000187  002 OF 003 
 
 
against the ruling party in the Kansai.  This time, our 
interlocutors tell us the DPJ positioned itself to 
capture those disenchanted voters, both unaffiliated 
voters and card-carrying LDP members.  Compounding the 
difficulty of the LDP to carry the smaller towns and 
agricultural centers, its junior partner Komeito party 
is weaker in these areas, which made it difficult for 
Komeito to bring out its support network to offset this 
disenchantment. 
 
POSTAL REVENGE 
-------------- 
 
¶6. (SBU) Victorious candidates Yoshihiro Kawakami in 
Tottori, Akiko Kamei in Shimane, and Yumiko Himei in 
Okayama all were part of the latest act in the postal 
rebel drama of the 2005 Lower House elections.  None of 
their victories would have been conceivable without the 
LDP status quo being stirred up by Koizumi's postal 
privatization campaign two years ago.  Kawakami was a 
former postal rebel, expelled from the LDP for opposing 
PM Koizumi's postal reforms.  He used his extensive 
experience and networks to overtake the stalled LDP 
incumbent as a newly minted DPJ politician.  Kamei is 
the daughter of the Secretary General of the PNP, which 
was founded by prominent postal rebels.  Supporters of 
former METI Minister and postal rebel Takeo Hiranuma 
defected to the DPJ's Himei despite Hiranuma's stated 
support for the LDP candidate, Toranosuke Katayama, the 
number two LDP officer in the Upper House.  Shockingly, 
the veteran Katayama lost his seat in the biggest upset 
of the elections. 
 
DONS DIMINISHED 
--------------- 
 
¶7. (SBU) Mikio Aoki of Shimane (the leader of the LDP 
caucus in the Upper House) and LDP Secretary General 
Hidenao Nakagawa of Hiroshima have announced they will 
step down from their party posts in order to take 
responsibility for the LDP blowout.  Taken together 
with Katayama's sudden departure from the political 
scene, these elections diminished the influence of 
several of western Japan's most powerful LDP 
politicians. 
 
THE OPPOSITION'S VIRAL MARKETING 
-------------------------------- 
 
¶8. (SBU) DPJ Chief Ozawa started on the campaign trail 
in support of DPJ candidates not in trendy Tokyo, like 
PM Abe, but in an economically blighted rural community 
in Okayama.  The voters there felt as though they had 
been ignored by Katayama, according to one local 
observer.  Those voters remembered Ozawa's gesture, and 
they came through for him in supporting his candidate, 
the young Himei.  Another DPJ leader in Okayama, Satsuki 
Eda, made clever use of the candidates' names ("Himei" 
includes the Chinese character for "princess" and 
Katayama's first name includes the character for 
"tiger") in order to create an election battle between 
a princess and a tiger that sounded more like Chinese 
mythology than a calculated campaign.  The DPJ grabbed 
the voters' attention and created buzz in rural Okayama. 
(Note: The princess appellation even spread north to 
neighboring Shimane, where Kamei capitalized on her own 
"royal" lineage as a direct descendent of local feudal 
lords.  End note)  Katayama apparently seldom campaigned 
in his own prefecture and was caught by surprise at his 
poor polling numbers too late to counteract this 
insurgency. 
 
COMMENT 
------- 
 
¶9. (SBU) Farming communities and small cities in western 
Japan are traditional bastions of LDP strength.  However, 
the LDP's overconfidence, as witnessed by Katayama's 
campaign, its numerous gaffes, money scandals 
and its missed opportunities to explain the need for 
painful change in order to reform rural Japan's moribund 
economy, worked to hand victory to the opposition in the 
Japanese hinterland.  The DPJ discovered and exploited the 
 
OSAKA KOBE 00000187  003 OF 003 
 
 
weak underbelly of a governing party that had grown 
complacent. It may have been a fortuitous combination of 
strategy and serendipity, but the DPJ and PNP found 
themselves well-positioned to capitalize on growing voter 
angst. 
 
KINGMAN