The ruling coalition of the Liberal Democratic Party and New Komeito failed to win a majority in terms of both seats and votes in Sunday's Upper House election.

The result, for now, does not affect the power of the ruling coalition. Seventy-nine Upper House seats held by the ruling coalition were not contested. Accordingly, the party retains an absolute majority in the 242-seat upper chamber. Also, the ruling coalition retains an absolute majority in the 480-seat Lower House, where it holds 283 seats. Since the current Lower House has a four-year term through November 2007, the ruling coalition can technically hold on to power through the next Upper House election in the summer of 2007.

The pattern of popular votes cast for each party on Sunday, however, should be ringing alarm bells for the ruling coalition. It certainly opens a window of opportunity for the largest opposition party, Minshuto (Democratic Party of Japan), to grab power the next time around.

On Sunday, 56.57 percent of the 102.95 million eligible voters turned out to cast their ballots. In the proportional representation system, the LDP won 30.0 percent of the popular vote, and its coalition partner New Komeito got 15.4 percent, giving them a combined share of 45.4 percent. In the Nov. 8 Lower House election, the comparable figure was 49.7 percent; the LDP won 35.0 percent, and New Komeito 14.7 percent. So the clear loser was the LDP, whose share declined by 5.0 percent.

On the other hand, the opposition parties' share of popular votes in the proportional representation system did not change significantly. Minshuto went from 37.4 percent to 37.8 percent; the Japanese Communist Party from 7.8 percent to 7.8 percent; and the Social Democratic Party from 5.1 percent to 5.3 percent.

What contributed to the increase in Upper House seats won by Minshuto this time was the relatively poor showing of the LDP in the rural single- and multi-constituency electoral districts.

In the run-up to the ballot on Sunday, most commentators viewed pension reform and Iraq as the most contentious issues for voters.

Indeed, the ruling coalition's high-handed and hurried manner of railroading the national pension reform bills through the Diet in the final days of the ordinary session no doubt alienated some voters.

But Minshuto did not offer a credible alternative.

Prime Minister Junichiro Koizumi's decision to allow Self-Defense Forces members to join multinational forces in Iraq caused considerable uproar, too. Again, Minshuto's stance on this issue seemed not to differentiate with the LDP's in the eyes of most voters. Iraq started getting people's attention in April when several Japanese were taken hostage. Thankfully, they were all released unharmed.

Koizumi meantime continues to insist that Japanese troops in Iraq are purely on humanitarian and reconstruction missions, not combat. So far, Japanese troops have not suffered any casualties.

However, two Japanese journalists were murdered in Iraq in June. Still, Iraq by and large does not impact on people's daily lives-at least not yet.

Then, what caused the LDP to perform so poorly in rural single- and multi-constituency electoral districts that had been its traditional strongholds? The most plausible answer would be depressed business conditions in those areas. This issue was neglected by Koizumi and got little ink in the Japanese media.

Those areas have patiently waited for an upturn in their fortunes under Koizumi's reform rhetoric. For them, however, the rhetoric has proved to be a mirage. It can be said that Iraq and the pension issue, to the disadvantage of the LDP, served as catalysts to bring deep-rooted discontent among rural voters to the surface. In rural districts, the power of the LDP's junior coalition partner is somewhat limited. Rebuilding support bases in rural areas will be a key issue for the ruling party if it intends to hold onto power beyond 2007.

Also Minshuto will have to demonstrate more convincingly that it offers a credible alternative to the LDP-led coalition if it is really serious about grabbing power by the end of 2007. It needs at least 5 to 7 million more votes in addition to 21 to 22 million votes it won in the 2003 Lower House election and on Sunday.

The LDP had a grand design to rebuild the nation after the Japan's defeat in World War II under the American security umbrella. It was viable in the second half of the 20th century. The geopolitical balance of Asia in particular, and the world in general, has already changed remarkably with the emergence of China and the European Union as major players on the international scene.

The LDP, though, has not been able to come up with a new grand design of Japan's security arrangements to suit changing geopolitical realities.

Minshuto's opportunity to grab power lies in its ability convincingly to show the Japanese public and the world that it has a new independent-minded grand security design that will accommodate the emergence of China as a major power. This grand plan must be seen to serve for at least the first half of the 21st century. In this light, it may be no exaggeration to say the next three years will prove to be the real battle ground for the LDP and Minshuto as they try to set the course for Japan over the next 50 years. National elections over the past decade have amply demonstrated that the LDP is no longer capable of holding power without coalition. Minshuto has an excellent chance of seizing the reins of power. But only if it is flexible to flex its muscles to absorb or ally with other minor opposition groups.

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The author is director of the Trilateral Institute, Inc. (Sankyoku Keizai Kenkyusho), a private think tank based in Tokyo. He contributed this comment to the Herald Tribune/Asahi.(IHT/Asahi: July 13,2004) (07/13)