The smallest elections often have the biggest repercussions. Japanese Prime Minister Shinzo Abe might want to ponder that as he considers what went wrong in Nago, Okinawa (population 62 000).

Abe’s Liberal Democratic Party (LDP) failed to dislodge incumbent mayor Susumu Inamine in Sunday’s contest, putting Japan-US relations at risk. Inamine has pledged to block the relocation of a US air base to his district, something Abe assured Washington was a done deal.

The question now is what the LDP’s setback in Nago says about a February 9 election in Tokyo, which could topple a central pillar of Abe’s economic programme.

Morihiro Hosokawa, Japan’s prime minister from 1993 to 1994, is running for Tokyo governor, arguably the second-most influential job in Japan. The LDP’s knives are out: Shintaro Ishihara, its popular governor from 1999 to 2012, has declared Hosokawa is not qualified for the job.

The establishment’s real gripe with Hosokawa has less to do with his credentials than his policies, which threaten Japan’s nuclear-industrial complex – the LDP’s political base. This “nuclear village” is at the root of the cronyism, corruption and inertia that continue to prolong Japan’s malaise and dent its competitiveness.

Abe’s surrogates are trying to paint Hosokawa as some kind of crazed Japanese Che Guevara who would drag the nation backwards with his green policies. But in his corner stands none other than Junichiro Koizumi, Abe’s political mentor and the nation’s most celebrated economic reformer in decades – hardly a Marxist.

In all the excitement over Abenomics and Tokyo hosting the 2020 Olympics, it’s easy to forget the nuclear-disaster zone 217km away. Radiation has been leaking from the crippled reactors at Fukushima for three years, and nuclear sludge is contaminating groundwater and the Pacific Ocean. How much? We don’t know. Tokyo Electric Power, which owns the plant, has hedged the truth about the disaster, enabled by the government. Abe’s new national secrets bill ensures we will know even less.


Hosokawa and Koizumi are doing Japan a favour by highlighting the crisis. If the 2011 earthquake and tsunami that damaged Fukushima demonstrated anything, it’s that Japan’s 54 reactors have no place in such a seismically-active nation.

The tragedy also exposed the nuclear village – a network of power companies, regulators, bureaucrats and researchers that holds sway over elections and media.

Just like Hosokawa, the two prime ministers prior to Abe, Yoshihiko Noda and Naoto Kan, hail from the Democratic Party of Japan and sought to rein in this pro-nuke cabal. Noda, for example, pledged to phase out nuclear power by 2040. Abe’s first act was to scrap that plan.

Why? It’s the easy road. Revitalising a bloated, aging economy is harder when energy costs are rising. The difficult route would be to find an alternative to nuclear power. It would be the more lucrative one.

In October, Koizumi turned on Abe and the LDP and called for a reactor-free Japan. He argued that devising and selling alternatives could be the ultimate growth industry. Abe is traversing the world hawking nuclear technology for Hitachi and other companies. But launching a new generation of renewable-energy companies could create millions of jobs and unprecedented wealth.

When it comes to energy efficiency and conservation, few places can trump Japan. All Abe is doing is doubling down on the last 20 years: pumping money into a tired economy, building more bridges and highways, and bailing out Sony with a weak yen.

Hosokawa and Koizumi are thinking bigger. It would be oddly poetic for Japan – the only country that has suffered a nuclear attack – to rid our planet of an energy source that has proven itself to be anything but safe, clean or cheap.

Unless we can construct reactors out of rubber or elevate them on huge shock absorbers out of the reach of temblors or tsunamis, they shouldn’t be part of Japan’s future. If high-technology, hyper-conservative and rules-obsessed Japan could not avoid or contain Fukushima, what hope do more graft-prone political systems have?

Abe’s party is circling the wagons to stop Hosokawa. BNP Paribas says investors should sell their stock if he becomes governor. I see this as an incredible opportunity for Japan. Call me crazy. – Bloomberg page 23

William Pesek is a Bloomberg View columnist.