* Election unlikely to resolve policy deadlock
* Opposition LDP outlines platform, aims to beat deflation
* Ruling party MPs dash to defect
* Mini-parties scramble to get ready for vote
TOKYO, Nov 16 (Reuters) - Japan dissolved parliament's lower
house on Friday for a Dec. 16 election that is likely to return
the long-dominant Liberal Democratic Party (LDP) to power with a
conservative former prime minister at the helm.
That prospect has prompted concerns that former Prime
Minister Shinzo Abe, who polls suggest is looks likely to be the
next premier, will further fray ties with China, already chilled
by a territorial row over a group of islands.
Few expect the election, three years after a historic
victory swept the Democratic Party of Japan (DPJ) to power for
the first time, will fix a policy stalemate that has plagued the
economy as it struggles with an ageing population and the rapid
rise of China.
"They will probably have the same problems of a revolving
door at the top and a weak government that finds initiating
tough reforms difficult and is tempted to enjoy nationalist
grandstanding," said Jeffrey Kingston, director of Asian studies
at Temple University's Japan campus.
Prime Minister Yoshihiko Noda, Japan's sixth prime minister
in six years and the third since the DPJ's landslide election
win, had promised three months ago to set a vote date in
exchange for opposition support for his pet policy to double the
sales tax by 2015 to curb massive public debt. This week he
finally kept that pledge despite pressure from his own party to
delay the vote, which the Democrats are widely expected to lose.
"When politics get chaotic, it is always the people who are
sacrificed," Toyota Motor Corp President Akio Toyoda,
who heads the auto industry lobby group, told a news conference.
"We want a leader who can understand the difficulties that
the people are going through, someone who can lead to create a
country and society where those who work hard are rewarded."
Policies in the spotlight include the role of the central
bank in reviving an economy slipping into its fourth recession
since 2000, the future of nuclear power after last year's
Fukushima disaster, and whether Japan should take part in the
Trans-Pacific Partnership, a U.S.-led trade pact that Noda
The LDP said on Friday in a draft of its economic platform
that it would do its best to beat deflation, which has dogged
Japan for years, and tame the strength of the yen, the source of
constant complaints from the country's exporters.
It said it would achieve nominal economic growth of 3
percent or more and revise the Bank of Japan law in a step
critics worry would weaken the central bank's independence.
In recent days Abe has called on the central bank to print
"unlimited yen" and set interest rates at zero or below zero to
boost the economy.
DEMOCRATS DEFECT, MINI-PARTIES SCRAMBLE
But with policy differences between the main parties in many
cases a matter of nuance and degree, some say the biggest
election question will be who is best qualified to lead.
"The main issue will be whether we should get rid of the
'incompetent' DPJ and bring experienced people (the LDP) back,"
said one ruling party lawmaker, speaking privately.
"Or whether because the LDP created the mess, we should have
a stronger more intelligent leader, like Hashimoto," the
lawmaker added, referring to p o pular Osaka Mayor Toru Hashimoto,
who leads the small Japan Restoration Party.
The DPJ took power in 2009 pledging to pay more heed to the
interests of consumers and workers than corporations and give
control of policy to politicians rather than bureaucrats.
Hopes of meeting those pledges faded after the first DJP
premier, Yukio Hatoyama, squandered political capital in a
failed attempt to move a U.S. airbase off Japan's Okinawa
Successor Naoto Kan led the party to an upper house election
defeat in 2010 and then struggled to cope with the huge
earthquake, tsunami and nuclear crises in 2011.
With the party's prospects dim, DPJ lawmakers were
scrambling to defect. The Asahi newspaper said at least nine of
its 244 members in the 480-seat lower house planned to bolt.
Smaller parties are scrambling to try to join forces despite
major gaps in their policies and competition over who would lead
the bigger bloc.
The LDP looks likely to win the most seats in the lower
house poll but a lack of voter enthusiasm makes it uncertain
whether the party and its former junior partner, the New Komeito
party, can win a majority.
"We must achieve victory. That is our mission for the people
and with that in mind, I resolve to fight this historic battle,"
Abe told party executives.
If not, the LDP will need to seek another coalition partner
either from among a string of new, small parties, or even what's
left of the DPJ after the election.
That latter option is less unlikely than it might seem at
first blush. The LDP and DPJ lack stark policy differences,
especially since Noda - a conservative on both fiscal and
security matters - took the helm of what began as a centre-left
party in 1996. The party's membership has been whittled by a
series of defections over Noda's policies.