La lettre de la Fondation France-Japon de l'EHESS
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How far can Abe go in the wake of his five victories?By Yves TIBERGHIEN (Université de la Colombie-Britannique )
What a remarkable series of victories! Over the course of twelve months, Shinzo Abe managed to clinch the LDP presidency against Shigeru Ishiba and Nobuteru Ishihara (September 2012); score a surprise landslide victory in the Lower House election (December 2012); bend the will of the Bank of Japan and place a key supporter at helm (March 2013); score another decisive victory in the Upper House election and untwist the “twisted Diet” (July 2013); then top it up with a heart-warming victory for Tokyo as the 2020 Olympic host.
Abe thus managed to realign Japan’s centers of power and to bring back stable governance to a nation desperate for leadership after nearly a decade of political chaos. Even more remarkable, Abe’s winning streak is a great story of learning and transformation for a leader who had a very unsuccessful first run in the prime minister’s seat in 2006-2007. Everyone agrees that Abe II (2012-2013) is a lot more decisive, effective, and focused on priority questions than Abe I (2006-2007).
The key question is: what can Abe do with his popularity and concentration of power? Two key policy issues stand out over the rest: economic policy and foreign policy.
On the economic side, the famed three arrows of Abenomics have captivated the attention of key stakeholders and generated optimism. Yet, the first arrow (unconventional monetary policy with large bond purchases) can only be a short-term boost: sooner or later, pressures on the bond yields will close the window. The second arrow (fiscal stimulus and debt-financed infrastructure) is likewise placed under the Damocles sword of the 220% debt to GDP ratio. Already, Abe just decided to go ahead with the planned increase in the consumption tax from 5% to 8% on April 1, 2014 in order to keep the confidence of investors. It is the third arrow of structural reforms (long-term oriented growth strategy) that carries the most potential. Yet, key measures that have real potential to boost investment and productivity (such as a law authorizing layoffs, medical deregulation, meaningful special economic zones, or agriculture reforms within aggressive trade agreements like the TPP) are all certain to face powerful opposition within the LDP and the public. In other words, Abe received a mandate to move forward, but the LDP remains beholden to traditional interest groups that are opposed to painful change. The public itself may soon loose appetite for Abenomics if it faces real costs.
In other words, Abe is now fully in control of parliament for three years, but he faces very hard economic constraints and a difficult road ahead. He does have a window for action and may seek to use it as early as this Fall. Yet, he will need a thorough compensation policy for the losers of reforms in order to move ahead. As for his hawkish foreign policy agenda, he may well need to stick to a pragmatic approach until Abenomics delivers proven results.
Abe thus managed to realign Japan’s centers of power and to bring back stable governance to a nation desperate for leadership after nearly a decade of political chaos. Even more remarkable, Abe’s winning streak is a great story of learning and transformation for a leader who had a very unsuccessful first run in the prime minister’s seat in 2006-2007. Everyone agrees that Abe II (2012-2013) is a lot more decisive, effective, and focused on priority questions than Abe I (2006-2007).
The key question is: what can Abe do with his popularity and concentration of power? Two key policy issues stand out over the rest: economic policy and foreign policy.
On the economic side, the famed three arrows of Abenomics have captivated the attention of key stakeholders and generated optimism. Yet, the first arrow (unconventional monetary policy with large bond purchases) can only be a short-term boost: sooner or later, pressures on the bond yields will close the window. The second arrow (fiscal stimulus and debt-financed infrastructure) is likewise placed under the Damocles sword of the 220% debt to GDP ratio. Already, Abe just decided to go ahead with the planned increase in the consumption tax from 5% to 8% on April 1, 2014 in order to keep the confidence of investors. It is the third arrow of structural reforms (long-term oriented growth strategy) that carries the most potential. Yet, key measures that have real potential to boost investment and productivity (such as a law authorizing layoffs, medical deregulation, meaningful special economic zones, or agriculture reforms within aggressive trade agreements like the TPP) are all certain to face powerful opposition within the LDP and the public. In other words, Abe received a mandate to move forward, but the LDP remains beholden to traditional interest groups that are opposed to painful change. The public itself may soon loose appetite for Abenomics if it faces real costs.
In other words, Abe is now fully in control of parliament for three years, but he faces very hard economic constraints and a difficult road ahead. He does have a window for action and may seek to use it as early as this Fall. Yet, he will need a thorough compensation policy for the losers of reforms in order to move ahead. As for his hawkish foreign policy agenda, he may well need to stick to a pragmatic approach until Abenomics delivers proven results.
2- Actualité des programmes de recherche
(University of Tokyo/EHESS)
Call for papers
"Understanding inequalities: Multidisciplinary approaches and comparative perspectives"
First EHESS - ISS joint workshop (11-12 July 2014, Institute of Social Science, Tokyo University)
Download the full call for papers
4- Entretien
Interview with Maria ROUBTSOVA
Comité éditorial: Kae AMO, Sébastien LECHEVALIER, Adrienne SALA
