Japan on the Road to the 21st Century

By JANICE C. SIMPSON

Sound trucks blaring political slogans crept through packed city streets on Okinawa. Candidates wearing white sashes emblazoned with their names pressed the flesh of voters at subway stations in Hokkaido. Campaign workers garbed in koala bear costumes roamed a shopping center in Tokyo. Across Japan last week hundreds of politicians scrambled to win voters before the July 6 election. At issue in the balloting will be control of both chambers of the Japanese Diet. Also at stake will be the political future of Prime Minister Yasuhiro Nakasone and his controversial drive to create a new era for postwar Japan.

Throughout the campaign, Nakasone has called for the most striking transformation of Japanese society since the country's emergence as a major industrial power in the decades that followed World War II. Ironically, the Prime Minister wants to reverse some policies that have helped produce his nation's extraordinary economic might. That strength was developed mainly through exports. But Japan's huge trade surplus, which now stands at $61.6 billion, has aroused worldwide calls for trade protection and stirred deep resentment against the increasingly isolated island nation. To halt those trends, Nakasone strenuously urges his countrymen to export less and import more and to produce more goods for the Japanese market.

That position reflects the recommendations of a special commission that Nakasone created to study the Japanese economy. It laid out a program last April to bring Japan into closer cooperation with other nations. The Prime Minister has been hitting hard at the theme. Says he: "Most important of all is to gear the Japanese people's minds to an international perspective." In keeping with that view, Nakasone wants Japan to assume greater responsibility for its own defense by boosting military spending and depending less on the U.S.

Critics say that Nakasone, 68, an able and forceful politician, has launched a complex drive to gain an unprecedented third term that would enable him to carry out his program. The bylaws of the ruling Liberal Democratic Party state that its leader must step down after two terms as party president. Since the head of the party in power is also the country's Prime Minister, the stricture would force Nakasone to leave both posts when his second two-year term expires next October. In the hope of circumventing the requirement, Nakasone last month called for elections to the 512-member House of Representatives on the same day as previously scheduled balloting for the 252-seat House of Councillors. His goal: smashing victories in both chambers that would persuade the Liberal Democrats to award him an unprecedented third term as head of the party and nation. Said a Socialist member of the Diet: "This is Nakasone's power grab."

Indeed, the Prime Minister remains highly popular after weathering public disappointment over the outcome of last May's summit of industrial nations in Tokyo. Opponents charged that Nakasone had allowed the U.S. and other trading partners to dictate Japanese economic policy. Nonetheless, the Prime Minister's popularity rating held up well among voters, and currently stands at a robust 58%.

The crucial question for Nakasone is the size of his party's victory. The Liberal Democrats, in power since 1955, are assured of maintaining their parliamentary majority. Their goal is to add at least a dozen seats to the 250 they hold in the House of Representatives. A triumph of that magnitude would boost the Prime Minister's chances of obtaining a third term. At the very least, Nakasone hopes to retain enough clout as a power broker within the party to continue pushing for his economic program. Said he on the campaign trail: "Without your support we cannot carry out administrative reform policies in education, tax, social welfare and privatization of the national railways."

Japan's six major opposition parties offer a motley array of alternatives. The Socialists, who have 111 seats in the House of Representatives, want to increase welfare spending and cut defense outlays. Charged Socialist Chairman Masashi Ishibashi: "Nakasone is a big liar. He never keeps his promises. We must stop the Nakasone practice of military buildup at the expense of welfare." Komeito, a middle-of-the-road Bud dhist group with 59 seats, is calling for cleaner government and more cooperation with various world peace movements.

To be sure, Nakasone's policies would mean painful changes for Japanese workers and businessmen. They have been told for four decades that the survival of their tiny, resource-poor island depended on self-reliance, personal sacrifice and the penetration of foreign markets. The average Japanese works six days a week and saves 16% to 17% of his salary, compared with 5% for his American counterpart. Nakasone would have him save less and spend more in order to help boost the economy. Other proposed moves could threaten the Japanese practice of assuring lifetime employment in a single company. That tradition is important both economically and socially to a people that lays great stress on group affiliations.

Nakasone's call for changes comes at a time when the value of the yen has surged more than 35% against the dollar since last September. Though sensitive to the jump, which has made Japanese goods more expensive in foreign markets, Nakasone was unable to persuade Ronald Reagan or other Western leaders at the Tokyo summit to help slow the yen's rapid rise. The suddenly high-priced currency has slashed profits of some major Japanese exporters by as much as 30%. The strengthened yen was the main culprit behind the .5% drop that Japan reported last week for its first-quarter gross national product. That decline was the first for the Japanese economy in eleven years. But economists predict that low oil prices and falling interest rates will cushion the yen shock and promote economic growth for the year as a whole.

Despite the yen problems and continued uneasiness over his reform policies, the Prime Minister seems firmly in control of Japanese politics. He hopes his popularity will carry over into votes for his party. Then, Nakasone says, he can press ahead with his campaign to "set Japan on the road for the 21st century."

With reporting by Edwin M. Reingold/Tokyo