tag:theconversation.com,2011:/uk/topics/abenomics-5622/articlesAbenomics – The Conversation2022-07-11T14:13:58Ztag:theconversation.com,2011:article/1867572022-07-11T14:13:58Z2022-07-11T14:13:58ZShinzo Abe: the disputed legacy of a politician who dominated public life in Japan after WWII<p>The assassination of former Japanese prime minister <a href="https://www.theguardian.com/world/live/2022/jul/08/shinzo-abe-shot-live-news-former-japan-prime-minister-feared-dead-shooting-japanese-pm-attack-speech?CMP=fb_gu&utm_medium=Social&utm_source=Facebook&fbclid=IwAR3tFdMCgUz9N2jJkqpcDecJSBemr4V9QZ1TJyoS5rK9aOToqaoRqpjCHuM#Echobox=1657252590-4">Shinzo Abe</a> has shaken the nation to its core. Abe was murdered while making a speech in support of the ruling Liberal Democratic Party (LDP) candidate in Nara in the run-up to last weekend’s elections – but, based on early reports, the shooting did not have a political motive. </p>
<p>Tetsuya Yamagami, who stands accused of the murder, was <a href="https://www.thetimes.co.uk/article/killer-targeted-shinzo-abe-over-secret-links-to-moonie-cult-dxqfkzkhs">reportedly motivated</a> by anger towards a religious cult that he blamed for the loss of his family’s fortune. His mother has subsequently been identified as a member of the Unification Church, also referred to as the “Moonies”. Full details have yet to emerge.</p>
<p>Abe is arguably the most important figure on the right of Japanese post-war politics. He <a href="https://abcnews.go.com/International/wireStory/timeline-career-japanese-pm-shinzo-abe-86433352">served as prime minister</a> between 2006 and 2007, resigning due to ill-health, and then again from 2012 to 2020 when he stepped down – citing a return of the ulcerative colitis which had cut short his first term of office. His prime ministership was marked by his new approach to economics, which became known as “Abenomics” and involved structural economic reforms coupled with quantitative easing to encourage lending and investment.</p>
<p>He also called for a shift in Japan’s defence policy away from the pacifist stance imposed by the US after the second world war under which Japan pledged, via <a href="https://japan.kantei.go.jp/constitution_and_government_of_japan/constitution_e.html">Article 9</a> of its constitution, not to maintain land, sea and air forces, “as well as other war potential”. </p>
<p>Since stepping down as prime minister, Abe continued to be an influential member of the LDP and returned to the leadership of the LDP’s largest <a href="https://www.tokyoreview.net/2022/01/the-evolution-of-ldp-factions/">faction</a>, the right-wing <em>Seiwa Seisaku Kenkyu-kai</em>. He is also a key member of the <a href="https://www.thetrumpet.com/14529-the-cryptic-nationalist-group-steering-japan">Nippon Kaigi</a>, a right-wing lobby group formed in 1997. Abe’s 2018 cabinet contained 22 out of 24 ministers who were also members of Nippon Kaigi.</p>
<h2>Abe’s legacy</h2>
<p>Abe will be remembered as a politician who adamantly sought to transform Japanese politics. As well as promoting the so-called “<a href="https://pacificaffairs.ubc.ca/book-reviews/the-abe-doctrine-japans-proactive-pacifism-and-security-strategy-by-daisuke-akimoto-the-iconoclast-shinzo-abe-and-the-new-japan-by-tobias-s-harris/">Abe doctrine</a>” – the move away from six decades of state pacifism, Abe also sought to boost Japan’s international presence. </p>
<p>He did this by strengthening partnerships with the country’s western allies through various treaties in order to solidify Japan’s liberal international standing and counter China including the <a href="https://thediplomat.com/2018/05/the-cptpp-and-its-implications-for-japan/">Comprehensive and Progressive Agreement for Trans-pacific Partnership</a>, <a href="https://www.ft.com/content/f0f093fb-89e9-395d-b12a-39a789c321a1">Japan-EU trade agreement</a> and <a href="https://www.ft.com/content/2cfda8fe-c67e-424a-89b9-a219c168a21d">Japan-UK trade deal</a> and the <a href="https://thediplomat.com/2014/05/shinzo-abes-quadrilateral-initiative-gone-and-forgotten/">Quadrilateral Security Dialogue (Quad)</a>. His commitment to “<a href="https://apjjf.org/2021/24/Nakahara.html">take back Japan</a>” appealed to many Japanese people, drawing – as it did – on nationalism to boost his popularity and strengthen his leadership.</p>
<p>Nevertheless, Abe’s nationalist tone often destabilised Japan’s diplomatic relations, especially with neighbours China and South Korea. Japan had a major disagreement with South Korea over the vexed issue of the former’s use of sex slaves, often referred to as “<a href="https://www.wsj.com/articles/BL-CJB-25647">comfort women</a>”, during the second world war. </p>
<p>This came to a head in 2015 over Japan’s attempts to request a US publisher to revise the passages in <a href="https://www.japantimes.co.jp/news/2015/02/09/national/u-s-historians-slam-abe-effort-to-change-textbook-dealing-with-comfort-women/">history textbooks</a> about the issue. The row eventually led to a <a href="https://www.washingtonpost.com/outlook/2019/08/11/how-japans-failure-atone-past-sins-threatens-global-economy/">major trade dispute</a>, resulting in limiting bilateral trade. </p>
<p>Likewise, Abe’s refusal to apologise for the <a href="https://foreignpolicy.com/2015/08/14/shinzo-abe-regrets-but-declines-to-apologize-for-japans-wwii-actions/">the mass rape of Chinese women in Nanking</a> in 2015 also severely damaged relations with China.</p>
<p>Abe will also be remembered for the considerable control and influence he had over the media in Japan, which had led to him being accused of undermining press <a href="https://foreignpolicy.com/2016/05/27/the-silencing-of-japans-free-press-shinzo-abe-media/">freedom</a>. There were allegations that he orchestrated the <a href="https://foreignpolicy.com/2016/05/27/the-silencing-of-japans-free-press-shinzo-abe-media/">removal of controversial television presenters</a> who dared to voice criticism of his domestic and foreign policies. </p>
<p>There were also accusations that the Liberal Democratic Party rigged press conferences to prioritise questions from journalists <a href="https://www.nippon.com/en/currents/d00215/">favourable to the party</a>. Abe’s government was accused of appointing like-minded figures to senior ranks within the state broadcaster, NHK. Press critics and some foreign journalists complained of <a href="https://www.theguardian.com/world/2019/dec/27/isoko-mochizuki-the-troublesome-thorn-in-shinzo-abes-side">intimidating government behaviour</a>. The <a href="https://thediplomat.com/2015/05/shinzo-abes-glass-jaw-and-media-muzzling-in-japan/">relentless pressure</a> from Abe and his government has led many critics to accuse Japanese media of subsiding into a state of self-censorship.</p>
<h2>The problem with Abenomics</h2>
<p>But Abe’s legacy will perhaps be most closely associated with his economic programme, “<a href="https://www.japan.go.jp/abenomics/index.html">Abenomics</a>”. While the debate continues over whether it was successful at stimulating growth, it also prompted considerable public discontent. Initially, the policy focused on expansionary monetary policy, flexible fiscal policy and an attempt to restructure the national economy.</p>
<p><a href="https://www.smd-am.co.jp/english/market_information/ad_hoc/2015/SMAM_Market_Keyword_No083.pdf">Abenomics 2.0</a> followed between 2015 and 2020 – and was in many ways a programme of levelling up, attempting to respond to the demands of the so-called “left behind” in Japan, as well as addressing gender inequality and representing the interests of the low-paid and people on welfare. This represented an attempt to recover Japan’s economy after its “lost decades” of economic slowdown.</p>
<p>But critics tend to view Abenomics as a set of recycled, repackaged policies that <a href="https://sunypress.edu/Books/C/Crisis-Narratives-Institutional-Change-and-the-Transformation-of-the-Japanese-State2">amount only to minor tinkering</a> which in fact made Japan’s socioeconomic problems worse and resulted in stagnating wages, a poor work-life balance and increased gender inequality. </p>
<p>This failure to effectively address inequality led to a rise in <a href="https://www.cornellpress.cornell.edu/book/9781501749933/contesting-precarity-in-japan/">protest and dissent</a> – especially among the growing class of precarious and low-paid workers. </p>
<p>In turn, Abe’s controversial foreign policy positions in the <a href="https://thediplomat.com/2015/08/china-south-korea-not-convinced-by-abes-ww2-anniversary-speech/">region</a> prompted widespread criticism and failed to mitigate the tensions with China and Korea. His determination to move Japan away from its pacifist constitution angered many – <a href="https://www.cfr.org/japan-constitution/public-attitudes-on-revision">polls show</a> that less than half of the population supports this change.</p>
<p>Abe may have cited the return of his colitis for his decision to <a href="https://www.nytimes.com/2020/08/28/world/asia/shinzo-abe-resign-japan.html">resign in September 2020</a>. But ultimately his decision was more influenced by a number of <a href="https://www.japantimes.co.jp/opinion/2017/10/20/editorials/kake-moritomo-scandals-bureaucracy/">damaging scandals</a> and plummeting <a href="http://www.tv-asahi.co.jp/hst/poll/">public approval ratings</a> for the performance of his cabinet.</p>
<p>It appears that none of this was a factor in his murder. And regardless of his sometimes controversial policy platforms, Abe will be remembered as a powerful leader in Japan’s political history, who – whether for positive or negative reasons – put Japan in the spotlight internationally.</p><img src="https://counter.theconversation.com/content/186757/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Saori Shibata does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Abe was Japan’s longest-serving post-war PM. His legacy, while considerable, is mixed.Saori Shibata, Lecturer, University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1461952020-09-15T06:46:11Z2020-09-15T06:46:11ZYoshihide Suga – who is the man set to be Japan’s next prime minister?<figure><img src="https://images.theconversation.com/files/358063/original/file-20200915-22-6xrv4b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Nicolas Datiche / Pool /EPA</span></span></figcaption></figure><p>Yoshihide Suga is set to be Japan’s new prime minister after he was <a href="https://www3.nhk.or.jp/nhkworld/en/news/ataglance/1128/">easily elected</a> leader of Japan’s Liberal Democratic Party (LDP) on Monday. </p>
<p>Suga is due to be formally appointed prime minister by a vote in the Japanese parliament on Wednesday, where the conservative LDP has a majority in both houses. </p>
<p>Former prime minister Shinzo Abe’s <a href="https://theconversation.com/shinzo-abe-japans-longest-serving-leader-leaves-office-a-diminished-figure-with-an-unfulfilled-legacy-145250">resignation last month</a> due to illness was a surprise. But once the leadership contest was declared, 71-year-old Suga - the chief cabinet secretary - was widely expected to be Japan’s next prime minister. </p>
<p>Wanting policy consistency, the leaders of five out of seven of the LDP’s major factions declared their support for Suga, which <a href="https://jen.jiji.com/jc/eng?g=eco&k=2020090700884">doomed the chances</a> of challengers Fumio Kishida and Shigeru Ishiba. </p>
<h2>Who is Suga?</h2>
<p>Unlike Abe and many other Japanese politicians, Suga <a href="https://www.wsj.com/articles/can-do-attitude-took-yoshihide-suga-from-strawberry-fields-to-japans-pinnacle-11599213602">did not inherit</a> a dynastic political support network. He is the eldest son of a prosperous strawberry farmer in the northern Akita prefecture. </p>
<p>The young Suga did not take up the family farm, but left for Tokyo. He studied at Hosei University and worked at a cardboard box factory and as a security guard. </p>
<p>Eschewing the <a href="https://mainichi.jp/english/articles/20200914/p2g/00m/0na/088000c">radical student politics</a> of the late 1960s, after graduation, he became a politician’s secretary. Suga was elected to the assembly of the port city of <a href="https://www.bbc.com/news/world-asia-54143029">Yokohama in 1987</a>. </p>
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Read more:
<a href="https://theconversation.com/shinzo-abe-japans-longest-serving-leader-leaves-office-a-diminished-figure-with-an-unfulfilled-legacy-145250">Shinzo Abe, Japan's longest-serving leader, leaves office a diminished figure with an unfulfilled legacy</a>
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<p>A shrewd networker, he built up his own local power base and <a href="https://mainichi.jp/english/articles/20200914/p2g/00m/0na/088000c">was elected</a> to the national Diet (parliament) for the LDP in 1996. </p>
<p>After switching between different factions, Suga <a href="https://www.nippon.com/en/news/yjj2020090500375/">ended up unaligned</a>. But he became close to Abe and was internal affairs minister in Abe’s first term of government in 2006. </p>
<p>In opposition, Suga was instrumental in helping Abe <a href="https://www.nippon.com/en/currents/d00135/">reclaim the LDP leadership</a> in 2012, and was rewarded with the chief cabinet secretary position. </p>
<h2>A fierce reputation</h2>
<p>As chief cabinet secretary, Suga <a href="https://www.thedailybeast.com/yoshihide-suga-japans-ruthless-new-pm-is-a-control-freak-who-muzzled-the-press">gained a reputation</a> for ruthlessly controlling the bureaucracy and stonewalling the media at daily press conferences. </p>
<p>He played a crucial role in protecting Abe from greater scrutiny over numerous <a href="https://www.eastasiaforum.org/2020/01/14/abe-dominates-despite-another-scandal/">scandals</a> that dogged his government. </p>
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<img alt="Shizo Abe and Yoshihide Suga holding a bunch of flowers." src="https://images.theconversation.com/files/358064/original/file-20200915-24-h88hga.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/358064/original/file-20200915-24-h88hga.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=447&fit=crop&dpr=1 600w, https://images.theconversation.com/files/358064/original/file-20200915-24-h88hga.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=447&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/358064/original/file-20200915-24-h88hga.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=447&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/358064/original/file-20200915-24-h88hga.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=562&fit=crop&dpr=1 754w, https://images.theconversation.com/files/358064/original/file-20200915-24-h88hga.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=562&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/358064/original/file-20200915-24-h88hga.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=562&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Yoshihide Suga takes over from Japan’s longest-serving prime minister, Shinzo Abe.</span>
<span class="attribution"><span class="source">Masanori Genko/AP</span></span>
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<p>A <a href="https://www.washingtonpost.com/world/japan-ruling-party-elects-yoshihide-suga-to-succeed-shinzo-abe-as-prime-minister/2020/09/14/c93514b4-f33f-11ea-8025-5d3489768ac8_story.html">teetotaller</a> like Abe, Suga is renowned for a strict work ethic. He lives mostly in a government <a href="https://foreignpolicy.com/2020/09/14/japan-new-prime-minister-yoshihide-suga-abe/">dormitory</a> and <a href="https://www.aljazeera.com/news/2020/09/yoshihide-suga-cardboard-factory-worker-leader-japan-200914071943048.html">rises each day at 5am</a> to do 100 sit-ups. </p>
<p>This stern, humourless image was slightly leavened when he announced the name of the new Imperial era in April 2019, and briefly received the moniker of “<a href="https://www.ft.com/content/6ae24e68-9702-4825-aaac-24137fb8ba64">Uncle Reiwa</a>”. </p>
<h2>What will Suga do now?</h2>
<p>Suga now takes up the challenge of keeping coronavirus under control and has <a href="https://www3.nhk.or.jp/nhkworld/en/news/backstories/1291/">pledged to continue</a> the record deficit spending and quantitative easing of “<a href="https://theconversation.com/profile-japans-controversial-shrewd-and-ambitious-shinzo-abe-84876">Abenomics</a>”. </p>
<p>He has indicated the consumption tax could be raised again in future. Suga also wants to reduce mobile phone rates, restructure regional banks and encourage further digitisation of the economy. </p>
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<a href="https://theconversation.com/japan-spring-and-prosperity-the-watchwords-as-country-announces-a-new-era-114873">Japan: spring and prosperity the watchwords as country announces a new era</a>
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<p>In environment policy, Suga is likely to continue the restart of nuclear power plants, build new <a href="https://thediplomat.com/2020/07/japan-promotes-clean-coal-in-the-battle-against-climate-change/">coal-fired power plants</a> and promote <a href="https://www.lowyinstitute.org/the-interpreter/japanese-whaling-down-not-out">commercial whaling</a>.</p>
<p>But apart from COVID-19, there are big challenges ahead. Suga’s administration will struggle to restimulate the economy out of its deepest postwar <a href="https://www.smh.com.au/business/the-economy/japan-slips-into-recession-worst-yet-to-come-as-pandemic-wreaks-havoc-20200518-p54txf.html">recession</a>, hold the <a href="https://theconversation.com/olympics-postponement-may-be-a-cultural-opportunity-for-tokyo-134871">delayed Olympics</a> next year, and confront entrenched gender and income <a href="https://www.nytimes.com/2020/09/13/world/asia/japan-women-abe.html?searchResultPosition=1">inequality</a>. </p>
<h2>International and security challenges</h2>
<p>Suga admits to being <a href="https://www.business-standard.com/article/international/japan-pm-hopeful-says-he-lacks-diplomacy-skills-may-need-help-from-abe-120091200678_1.html">inexperienced in international affairs</a>, and will possibly retain Abe - who for now remains in the Diet - as a special diplomatic adviser.</p>
<p>The new leader’s <a href="https://www.japantimes.co.jp/opinion/2020/09/08/commentary/japan-commentary/japan-foreign-policy-shinzo-abe/">foreign policy priorities</a> will be to maintain the US alliance, and keep relations with China relatively smooth. Unlike his rival Ishiba, Suga does not favour creating an “Asian NATO”, but will still promote cooperative middle-power relations with ASEAN, India and Australia. </p>
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<img alt="Yoshihide Suga wearing a face mask." src="https://images.theconversation.com/files/358065/original/file-20200915-20-1ym2vxj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/358065/original/file-20200915-20-1ym2vxj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/358065/original/file-20200915-20-1ym2vxj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/358065/original/file-20200915-20-1ym2vxj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/358065/original/file-20200915-20-1ym2vxj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/358065/original/file-20200915-20-1ym2vxj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/358065/original/file-20200915-20-1ym2vxj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Suga now faces the task of guiding Japan and its economy through COVID-19.</span>
<span class="attribution"><span class="source">Eugene Hoshiko /Pool/EPA</span></span>
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<p>Like Abe, Suga desires to resolve the <a href="https://www.japantimes.co.jp/news/2020/06/11/national/japan-north-korean-abduction-issue/">longstanding issue</a> of Japanese abductees in North Korea. He also has a difficult task to restore the <a href="https://www.bbc.com/news/world-asia-49330531">dire state of relations</a> with neighbour South Korea. </p>
<p>Suga also shares Abe’s unfulfilled goal of changing <a href="https://www.loc.gov/law/help/japan-constitution/article9.php">article 9</a> of the constitution to allow <a href="https://www.theguardian.com/commentisfree/2020/jan/03/japan-warship-deployment-conflict-shinzo-abe-donald-trump">greater deployment</a> of Japan’s Self-Defence Forces. His new cabinet will proceed with a controversial new defence doctrine, <a href="https://warontherocks.com/2020/07/is-japans-interest-in-strike-capabilities-a-good-idea/">to acquire cruise missiles</a> for pre-emptive strikes against potential threats from the Asian continent. </p>
<h2>Early election?</h2>
<p>Suga has <a href="https://jp.reuters.com/article/us-japan-politics-snapelection-analysis/after-sweeping-party-poll-japans-suga-faces-tricky-call-on-snap-election-idUSKBN2660KS">cautioned against</a> an early election until COVID-19 is brought under control. </p>
<p>But there is <a href="https://www.japantimes.co.jp/news/2020/09/13/national/politics-diplomacy/taro-aso-ldp-snap-election/">already speculation</a> a snap election could be called, possibly by the end of next month. This would stop the Constitutional Democratic Party of Japan from building on its recent reorganisation into a <a href="https://english.kyodonews.net/news/2020/09/0e9b4dc23e45-urgent-yukio-edano-named-as-chief-of-japans-new-main-opposition-party.html">more united</a> bloc. </p>
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<a href="https://theconversation.com/how-shinzo-abe-has-fumbled-japans-coronavirus-response-136860">How Shinzo Abe has fumbled Japan's coronavirus response</a>
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<p>The next election for the lower house of the Diet is due by October 2021, so at most, Suga only has a year to prove himself to be more than a caretaker prime minister. </p>
<p>He faces a leadership vote again in September 2021, <a href="https://www.jimin.jp/english/the-president/rules/">under party rules</a> requiring a ballot every three years for each regular term of LDP leader.</p>
<p>Internal rivals will seek another chance at the top job, particularly as the whole rank-and-file membership of the LDP will be allowed to participate in this vote. This may favour the generally more popular Ishiba. </p>
<p>If a larger field of candidates such as defense minister Taro Kono, or acting secretary general Tomomi Inada run against Suga, it is possible Japan could have yet another new prime minister by this time next year.</p><img src="https://counter.theconversation.com/content/146195/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Craig Mark does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Suga has a strict work ethic, rising at 5am each day. He will need to work hard to hang on to the prime ministership at a bumpy time for Japan.Craig Mark, Professor, Faculty of International Studies, Kyoritsu Women's UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1452502020-08-28T11:42:01Z2020-08-28T11:42:01ZShinzo Abe, Japan’s longest-serving leader, leaves office a diminished figure with an unfulfilled legacy<figure><img src="https://images.theconversation.com/files/355278/original/file-20200828-20-78ld1t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">ROBERT GILHOOLY/EPA</span></span></figcaption></figure><p>Japanese Prime Minister Shinzo Abe ended weeks of speculation about the state of his health by <a href="https://www.japantimes.co.jp/news/2020/08/28/national/politics-diplomacy/shinzo-abe-resign/">announcing his surprise resignation</a> today. </p>
<p>The 65-year-old Abe was finally forced to concede to the ulcerative colitis intestinal disease that had brought his <a href="https://www.japantimes.co.jp/news/2007/09/13/national/abe-announces-he-will-resign/">first brief term in office</a> to an end in 2007. </p>
<p>After being treated with a new course of medication, Abe made a remarkable political comeback in 2012. He regained the leadership of the conservative Liberal Democratic Party (LDP), and led it back into government, three years after it <a href="https://www.economist.com/leaders/2009/09/03/the-vote-that-changed-japan">was knocked out of power</a>. </p>
<p>Abe easily defeated the weak and disorganised opposition parties in the 2014 and 2017 elections, and in 2018 secured an unprecedented <a href="https://www.theguardian.com/world/2018/sep/20/shinzo-abe-set-to-be-japans-longest-serving-pm-after-winning-party-vote">third three-year term as LDP president</a>, with his supporters speculating he could lead for yet another. </p>
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<img alt="" src="https://images.theconversation.com/files/355279/original/file-20200828-23-1p7hd7y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355279/original/file-20200828-23-1p7hd7y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=417&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355279/original/file-20200828-23-1p7hd7y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=417&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355279/original/file-20200828-23-1p7hd7y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=417&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355279/original/file-20200828-23-1p7hd7y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=525&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355279/original/file-20200828-23-1p7hd7y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=525&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355279/original/file-20200828-23-1p7hd7y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=525&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Abe was re-elected as LDP president in a landslide victory in 2018.</span>
<span class="attribution"><span class="source">Takehiko Suzuki/AP</span></span>
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<h2>Partial successes in the economy, defence</h2>
<p>Abe kept up this political success based around his core economic policy, prominently marketed as “<a href="https://www.japan.go.jp/abenomics/index.html">Abenomics</a>”. This comprised the three “arrows” of record stimulus spending, <a href="https://www.investopedia.com/terms/q/quantitative-easing.asp">quantitative easing</a> (printing money to buy assets), and attempts at deregulation. </p>
<p>Abenomics was partially successful at restoring mild economic growth, but this started to wane after consumption tax hikes last October. The country then slipped into <a href="https://thediplomat.com/2020/05/japans-economy-officially-enters-recession-for-first-time-since-2015/">recession</a> with the coronavirus pandemic. </p>
<p>In foreign policy, the nationalistic Abe <a href="https://www.japantimes.co.jp/news/2019/11/19/national/politics-diplomacy/shinzo-abe-revise-constitution/">reinterpreted Japan’s pacifist constitution</a>, passing bills in the Diet in 2015 to allow collective self-defence with its US ally — despite a lack of public support and large student-led demonstrations. </p>
<p>Accompanied by a sharp increase in defence spending, Abe’s long-held desire to change the constitution to allow even more assertive use of the <a href="https://www.mod.go.jp/gsdf/english/">Japanese Self-Defence Forces</a> was left unfulfilled. In 2019 Upper House elections, the LDP and its coalition partners lost the two-thirds majority <a href="https://www.scmp.com/week-asia/explained/article/3019217/explained-whats-stake-japans-2019-upper-house-election">required</a> to allow any constitutional referendum. </p>
<p>Despite this setback, the lack of a strong challenger within the LDP — as well as the failure of the opposition parties to pose any credible threat — allowed Abe eventually to become the <a href="https://www.nippon.com/en/features/h00296/abe-shinzo-becomes-japan%E2%80%99s-longest-serving-prime-minister.html">longest-serving prime minister</a> in Japanese history. </p>
<h2>Deeper relations with regional states</h2>
<p>Abe energetically pursued foreign affairs throughout his tenure, <a href="https://theconversation.com/has-abe-got-trumps-measure-golf-diplomacy-puts-japan-back-on-the-green-72739">maintaining the key US alliance</a> through presidents Barack Obama to Donald Trump. </p>
<p>He sought greater Japanese participation in regional security by promoting a “<a href="https://www.mofa.go.jp/policy/page25e_000278.html">free and open Indo-Pacific</a>” region, and in doing so, deepened Japan’s strategic relations with India, ASEAN and Australia.</p>
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<img alt="" src="https://images.theconversation.com/files/355318/original/file-20200828-16-1u6lqur.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355318/original/file-20200828-16-1u6lqur.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355318/original/file-20200828-16-1u6lqur.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355318/original/file-20200828-16-1u6lqur.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355318/original/file-20200828-16-1u6lqur.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355318/original/file-20200828-16-1u6lqur.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355318/original/file-20200828-16-1u6lqur.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Japan’s Self-Defence Force brought recovery equipment and personnel to help in Australia’s response to bushfires this year.</span>
<span class="attribution"><span class="source">DAN HIMBRECHTS/AAP</span></span>
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<p>Abe managed largely stable relations with China, Japan’s largest trading partner, but territorial disputes with Beijing, as well as with Russia and South Korea, also went unresolved. Relations with South Korea, in particular, reached a low point over their <a href="https://www.washingtonpost.com/politics/2020/08/13/75-years-later-japan-south-korea-have-yet-fully-reconcile-their-wartime-colonial-history/">wartime and colonial history</a>. </p>
<p>Abe nevertheless built on his image as a senior world leader, culminating in hosting the <a href="https://www.lowyinstitute.org/the-interpreter/temper-our-optimism-message-g20-leaders-summit-osaka">G20 summit in Osaka</a> last year. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/shinzo-abes-latest-cabinet-reshuffle-could-transform-japan-124017">Shinzo Abe's latest cabinet reshuffle could transform Japan</a>
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<h2>A bungled response to coronavirus</h2>
<p>Abe’s erratic response to the coronavirus caused a sharp decline in his authority this year. A massive stimulus spending program sought to limit the damage to the economy, but the overall public response by Abe’s government <a href="https://theconversation.com/how-shinzo-abe-has-fumbled-japans-coronavirus-response-136860">lacked clear direction</a>. </p>
<p>Regional leaders such as Tokyo Governor Yuriko Koike pushed early for a national state of emergency, but Abe only <a href="https://www.theguardian.com/world/2020/apr/07/japan-shinzo-abe-declares-state-of-emergency-over-coronavirus">reluctantly declared one</a> in April — and it only lasted around a month. Abe also delayed making a decision to postpone the Tokyo Olympics until <a href="https://www.bbc.com/news/world-52000044">foreign delegations announced</a> they wouldn’t attend.</p>
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<img alt="" src="https://images.theconversation.com/files/355281/original/file-20200828-16-n4plzw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355281/original/file-20200828-16-n4plzw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=749&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355281/original/file-20200828-16-n4plzw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=749&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355281/original/file-20200828-16-n4plzw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=749&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355281/original/file-20200828-16-n4plzw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=941&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355281/original/file-20200828-16-n4plzw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=941&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355281/original/file-20200828-16-n4plzw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=941&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Abe’s leadership was damaged by the government’s initial missteps in its coronavirus response.</span>
<span class="attribution"><span class="source">Masanori Genko/AP</span></span>
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<p>While Japan has fared relatively well dealing with COVID-19, there have been other ill-considered responses by the government. These included the widely ridiculed “<a href="https://www.japantimes.co.jp/news/2020/07/28/national/japan-abenomasks-social-media/">Abenomasks</a>” and the “<a href="https://japantoday.com/category/national/Go-To-Travel-campaign-comes-under-fire">GoTo Travel</a>” domestic tourism campaign, which entrenched the public’s impression Abe was failing to respond energetically enough to the crisis. </p>
<p>Persistent <a href="https://mainichi.jp/english/articles/20200718/p2a/00m/0fp/010000c">political scandals</a> also continued to erode Abe’s legitimacy. </p>
<p>From mid-June, Abe held <a href="http://www.asahi.com/ajw/articles/13616037">no press conferences</a> for nearly 50 days, and made few public appearances until the commemorations around the 75th anniversary of the end of the second world war in mid-August. </p>
<p>As his approval ratings dropped to their lowest levels since 2012, Abe made a series of hospital visits in recent weeks. This sparked media speculation over his health, which LDP officials vainly tried to downplay. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-shinzo-abe-has-fumbled-japans-coronavirus-response-136860">How Shinzo Abe has fumbled Japan's coronavirus response</a>
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<h2>Who will be the next prime minister?</h2>
<p>Abe will stay on as caretaker until the LDP’s Diet members elect a new president sometime over the next two or three weeks. This person will then be confirmed as prime minister by a vote in the Diet. </p>
<p>Speculation about his successor was already building in anticipation of the end of his term in September 2021, but this has now been rushed forward. </p>
<p>Prime candidates include his main old rival, former Defence Minister <a href="https://www.japantimes.co.jp/news/2020/08/19/national/politics-diplomacy/shigeru-ishiba-potential-abe-successor/">Shigeru Ishiba</a>, who enjoys the highest public approval ratings as an alternative leader. <a href="https://www.japantimes.co.jp/news/2020/07/20/national/politics-diplomacy/ldp-fumio-kishida-shinzo-abe/">Fumio Kishida</a>, the LDP policy council chief and former foreign minister, is widely considered to be favoured by Abe as his replacement. </p>
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<img alt="" src="https://images.theconversation.com/files/355315/original/file-20200828-18-1er6yfn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355315/original/file-20200828-18-1er6yfn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=405&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355315/original/file-20200828-18-1er6yfn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=405&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355315/original/file-20200828-18-1er6yfn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=405&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355315/original/file-20200828-18-1er6yfn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=509&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355315/original/file-20200828-18-1er6yfn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=509&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355315/original/file-20200828-18-1er6yfn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=509&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Shigeru Ishiba is seen as a potential successor to Abe.</span>
<span class="attribution"><span class="source">KYDPL KYODO/AP</span></span>
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<p>Another long-standing ally, Chief Cabinet Secretary Yoshihide Suga may also be in contention, as could Defence Minister Taro Kono or Economic Revitalisation Minister Yasutoshi Nishimura. </p>
<p>Whoever is chosen by the LDP is unlikely to greatly change the direction of Japan’s economic and foreign policy. The new leader will have the ongoing responsibility of dealing with the persistent “second wave” of the COVID-19 pandemic and trying to engineer a post-pandemic recovery, while still burdened with record public debt and an ageing population. </p>
<p>Japan’s next prime minister will also soon face the judgement of the electorate, as the next national election is due by October 2021. The end of this patrician era of conservative politics has dramatically brought Japanese politics into an suddenly uncertain future. </p>
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Read more:
<a href="https://theconversation.com/why-the-fall-out-from-postponing-the-olympics-may-not-be-as-bad-as-we-think-134531">Why the fall-out from postponing the Olympics may not be as bad as we think</a>
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<img src="https://counter.theconversation.com/content/145250/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Craig Mark does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Abe restored mild economic growth to Japan and enhanced the country’s position on the global stage, but his handling of the coronavirus pandemic was widely criticised.Craig Mark, Professor, Faculty of International Studies, Kyoritsu Women's UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/848762017-10-04T12:12:41Z2017-10-04T12:12:41ZProfile: Japan’s controversial, shrewd and ambitious Shinzo Abe<p>As Japanese Prime Minister Shinzo Abe campaigns in a snap election, he looks set to enter into an unprecedented third term in office, and become Japan’s <a href="https://www.britannica.com/topic/list-of-prime-ministers-of-Japan-1812632">longest serving postwar prime minister</a>. So who is he? What is the secret to his success? And why is he both so fervently supported an – and intensely hated?</p>
<p>Even before he became prime minister, Abe was notorious for his family links to a suspected war criminal, <a href="https://www.japantimes.co.jp/news/2012/12/26/national/formed-in-childhood-roots-of-abes-conservatism-go-deep/#.WdIND7pFyUk">Kishi Nobusuke</a>, and for his dubious connections with groups on Japan’s <a href="https://www.nytimes.com/2017/03/16/world/asia/japan-shinzo-abe-scandal-ties-right-wing-organization.html">political far right</a>. </p>
<p>Since his first stint in office (2006-7), he has been at the forefront of pushing for a hard line against North Korea, and championed the cause of abductees whom Pyongyang <a href="http://lite-ra.com/2016/04/post-2133.html">kidnapped from Japan</a>. He has not shirked at visiting the controversially nationalistic <a href="http://www.bbc.co.uk/news/world-asia-25518166">Yasukuni Shrine</a>, despite outrage from China and both Koreas. And above all, he has pushed for the modernisation and internationalisation of Japan’s military.</p>
<p>Under the buzzword “proactive peace”, this includes establishing overseas bases, training regional coastguards and <a href="https://www.theguardian.com/world/2014/jun/30/japan-pm-overturn-pacifist-defence-policy-shinzo-abe">reinterpreting the constitution</a> to allow <a href="https://www.japantimes.co.jp/news/2016/03/01/national/politics-diplomacy/abe-cites-need-japan-fully-exercise-right-collective-self-defense/#.WdS_ABOPLBI">collective self-defence</a>, meaning it could use military force to defend other allied countries if they were attacked. If he could stretch his political might just far enough, Abe would go further by becoming the first postwar leader to actually revise the constitution. This could once and for all dispel Japan’s <a href="https://theconversation.com/japans-change-in-military-outlook-marks-the-end-of-a-peace-state-68864">longtime image</a> as a “peace state”.</p>
<p>On the domestic front, Abe has been equally proactive. His flagship project, dubbed “<a href="https://www.cfr.org/backgrounder/abenomics-and-japanese-economy">Abenomics</a>”, is pitched as a three-pronged strategy to lift Japan’s economy out of almost three “lost decades”. This centres on monetary easing, structural reform and fiscal stimulus. How well it has worked, though, remains the source of <a href="http://www.toha-search.com/keizai/abenomics.htm">much debate</a>.</p>
<p>What is clear is that Abe has justified a multitude of repressive, controversial and arguably unconstitutional moves and policies under the pretext of strong leadership. Under a new <a href="http://www.aljazeera.com/news/asia-pacific/2014/12/japan-state-secrets-law-protests-2014129231715292756.html">secrecy law</a>, public servants could go to jail for up to 10 years if they reveal anything deemed counter to national security interests; a heavy-handed approach to the media has seen Japan plummet in <a href="https://www.japantimes.co.jp/news/2017/04/27/national/japan-stays-72nd-world-press-freedom-list-last-g-7/#.WdS9wROPLBI">press freedom rankings</a>, and anti-terror conspiracy legislation even <a href="http://www.bbc.co.uk/news/world-asia-40283730">outlaws some forms of wild mushroom picking</a> </p>
<p>But there is another side to Abe. Despite his stereotype, he is not simply a right-wing revisionist with a penchant for repression, militarism and nationalist chest beating. Abe is also a <a href="https://www.nytimes.com/2017/02/08/opinion/japan-where-populism-fails.html">shrewd politician</a>, and it’s his <a href="https://thediplomat.com/2017/06/shinzo-abe-ideologue-or-pragmatist/">pragmatism</a> that has really seen him sustain success.</p>
<h2>Playing the game</h2>
<p>First, he surrounded himself with a carefully selected and reshuffled pack of allies and counterparts. These he chose both to support his own agenda and appease his opponents. His fellow hardliner Tomomi Inada served as defence minister, while moderate Fumio Kishida became foreign minister. But Abe has no compunction about moving his ministers on when the time comes: he reluctantly but quickly <a href="http://edition.cnn.com/2017/07/27/asia/tomomi-inada-japan-defense-minister/index.html">axed Inada</a> when she became embroiled in scandal, and reshuffled Kishida to a prominent new post to <a href="http://business.nikkeibp.co.jp/atcl/report/15/110879/080400718/">avoid alienating him</a>.</p>
<p>Second, Abe’s timing has been both good and lucky. He waited until a vacuum appeared in his own party to resurface and assume the leadership. He was lucky in coinciding this with a fractured and discredited opposition, against which he quickly surged to power with a popular vote and political mandate rarely enjoyed in the <a href="https://www.economist.com/news/21636467-shinzo-abe-wins-easily-weak-mandate-voters-romping-home">postwar era</a>. </p>
<p>Finally, Abe has managed to <a href="https://www.japantimes.co.jp/opinion/2017/08/20/commentary/japan-commentary/koike-versus-abe-populist-politics-stakes/#.WdOTr7pFyUk">ride the global wave of populism</a> – albeit in moderate form and with a conservative twist. In this vein, he is a champion to his supporters. Abe is the man that has shown leadership where others failed to, preceding and succeeding five consecutive premiers before him who had lasted little more than a year each in office.</p>
<p>He has also been quick to welcome Donald Trump’s leadership and has moved Japan ever closer to the US, joining Trump in continuing to push for more stick and less carrot to be used against Kim Jong-un’s North Korea. And while avoiding making relations with his nearest neighbours any worse, his strategists have continued to encircle and pressurise China. This takes <a href="http://journals.rienner.com/doi/abs/10.5555/0258-9184-37.3.437?code=lrpi-site">concrete form</a> by way of a Japan Self Defence Force base in Djibouti, Japan Coast Guard training exercises in the East and South China Seas, and the fortification of Okinawa.</p>
<p>But how will Abe be remembered? His fans will no doubt claim he fulfilled his <a href="https://www.youtube.com/watch?v=S5rhUHmPbZc">promise</a> to “take back Japan”. His opponents are still asking from where, and for whom it was “taken back”, if at all. Indeed, it’s hard to say whether or not Japan Inc. really is in better shape since Abe and his Liberal Democratic Party returned to power. But if the upcoming election proves anything, it will likely be that Team Abe’s dominance endures.</p><img src="https://counter.theconversation.com/content/84876/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ra Mason does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>How did a man once suspected of dubious far-right sympathies end up on the threshold of a record third term?Ra Mason, Lecturer in International Relations and Japanese Foreign Policy, University of East AngliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/728212017-04-26T07:19:00Z2017-04-26T07:19:00ZJapan has turned its culture into a powerful political tool<figure><img src="https://images.theconversation.com/files/166626/original/file-20170425-12650-19qo0v1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="http://www.epa.eu/arts-culture-and-entertainment-photos/entertainment-general-culture-general-photos/international-manga-heroes-madrid-2017-fair-photos-53471059">EPA/Javier Lizon</a></span></figcaption></figure><p>Much has been made of Japan’s recent turn away from pacifism and growing military muscle, but Tokyo is also extending its global reach in more subtle ways. Japan is especially serious about increasing its <a href="https://www.jstor.org/stable/1148580?seq=1#page_scan_tab_contents">soft power</a>, the ability to win over global partners with cultural and diplomatic affinity rather than coercion and sheer heft.</p>
<p>Tokyo has long busied itself building a national “brand”, an image that combines the supposed uniqueness of Japanese language, cuisine, and traditional hospitality with its postwar pacifism and reputation for technological prowess. The latest iteration of this project is the <a href="https://www6.nhk.or.jp/cooljapan/en/about/">Cool Japan</a> initiative, which capitalises on the international popularity of manga and anime to project the Japanese brand around the world. </p>
<p>But while this might all sound like very 21st-century stuff, the idea of packaging national culture into a political brand is a familiar one, and Japan has been doing it for decades – albeit in very different ways.</p>
<p>Before World War II, imperial Japan presented itself as the “liberator” of Asia, the only modernised Asian state to have escaped Western colonialism. This myth already contained the core elements of Cool Japan, depicting Japan as neither Asian nor Western but an exotic hybrid of Western modernity and Asian tradition. This deft act of national branding won it the <a href="http://www.history.ac.uk/reviews/review/680">1940 Olympics</a> – but as the country’s expansionist offensives in Asia ramped up in the late 1930s, the games were abandoned. </p>
<p>Yet remarkably, this myth of Japanese cultural uniqueness survived the devastating and humiliating defeat of August 1945. On the contrary, it was reinforced by Japan’s <a href="https://www.theatlantic.com/photo/2014/03/japan-in-the-1950s/100697/">postwar pacifism</a> and rapid reconstruction that began in the mid-1950s. Over the next few decades, Japan became the second-largest economy in the world, once again suggesting that it was a trailblazing standout in an otherwise backward Asia. </p>
<p>That approach paid off with the successful bid for the 1964 Tokyo Olympics, which this time actually happened.</p>
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<p>The organisation that most actively promotes this mission today is the <a href="http://www.jpf.org.uk/">Japan Foundation</a>, Japan’s answer to the <a href="https://www.britishcouncil.org/">British Council</a> and a potential rival to China’s <a href="https://www.soas.ac.uk/lci/">Confucius Institute</a>. The foundation’s job is to promote Japanese language and culture, principally by engaging in international cultural exchange programmes and encouraging language learning.</p>
<p>Indeed, the Foundation, has been active in hosting Japanese language speech contests outside Japan, as well as conducting Japanese Language Proficiency Tests whereby learners can gain a certificate of Japanese language fluency. Furthermore, the Japan Foundation promotes cultural and academic exchanges between Japan and the outside world. And as the Japanese Foreign Ministry itself <a href="http://www.mofa.go.jp/policy/other/bluebook/1988/1988-2-5.htm">suggests</a>, cultural exchanges help to lubricate diplomatic relations in general.</p>
<h2>Abe power</h2>
<p>On the face of it, Prime Minister Shinzo Abe’s much-touted economic revitalisation programme, known as <a href="http://www.cfr.org/japan/abenomics-japanese-economy/p30383">Abenomics</a>, has little to do with soft power. In its first incarnation as the <a href="http://japan.kantei.go.jp/abespeech/2007/01/26speech_e.html">Beautiful Country</a> programme, the hallmark of Abe’s first term in 2006-7, this was a thoroughly domestic agenda of constitutional amendments, fiscal restructuring and economic deregulation. </p>
<p>But this wasn’t just an economic programme; it was also a nationalistic one, designed to turn domestic economic regeneration into an international display of supposedly distinctive Japanese attributes, not least diligence and resilience.</p>
<p>With patrotic education at home and cultural outreach abroad, Abe is turning the old myth of Japanese uniqueness into a different kind of nationalism. To be sure, he clearly believes that economic revitalisation and a renewed military are crucial prerequisites for rebuilding Japan’s self confidence. But he also knows that to truly win over the rest of the world, it has to win the hearts and minds of global consumers.</p>
<p>And so the Abe government is advancing a carefully calibrated image of a beautiful, vibrant Japan, simultaneously traditional and modern. Perhaps the ultimate expression of this was Abe’s in-person appearance as Super Mario at the <a href="https://youtu.be/s23qwzu4Mb8?t=2m26s">closing ceremony of the 2016 Rio Olympics</a>, heralding Toyko’s turn in 2020. It might have looked trivial, but in reality, it was the apex of a calculated, long-term propaganda exercise that will project Japanese influence as far as possible. </p>
<p>So the next time you pick up a manga comic from your local bookshop or grab a sushi roll off a conveyor belt, remember that you’re not just treating yourself – you’re also playing your part in a long and very considered political project.</p><img src="https://counter.theconversation.com/content/72821/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Taku Tamaki does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>There’s nowhere quite like Japan – or at least, that’s how the Japanese government tells it.Taku Tamaki, Lecturer in International Relations, Loughborough UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/658062016-09-22T07:04:28Z2016-09-22T07:04:28ZExplainer: why the Japanese economy is stuck in a holding pattern<p>The Bank of Japan is pulling yet another new monetary policy out of its bag of tricks in a bid to combat deflation, this time it’s “yield-curve control”. This is the latest in a history of unusual monetary policy, such as negative interest rates, that the bank maintains have been effective in improving Japan’s economy. </p>
<p>As part of the new policy the central bank will keep its 10-year government bond yield at zero. Usually central banks only control short-term interest rates, but the bank wants to steepen the yield curve, increasing the difference between the yields of short-term bonds (negative in Japan) and long-term bonds.</p>
<p>This is designed to free up more money in commercial banks in Japan for investment.
In addition to this, the Bank of Japan will continue to buy about 80 trillion yen in Japanese government bonds annually. </p>
<p>The question is how effective the new scheme is going to be, particularly because the announced target rate of the 10-year bond is around its current market rate, so the current situation is unlikely to change. </p>
<p>However monetary policy hasn’t been able to control deflation and Japan’s national debt remains high. The bank is limited in what policies it can implement. Without a boost to other economic activities, such as an increase in employment, the effects of policies won’t last long. </p>
<p>What’s needed is some <a href="https://www.boj.or.jp/en/announcements/release_2016/k160729a.pdf">synergy</a> between the bank’s monetary policy measures and the government’s fiscal policies. This means the government of Japan will have to step up with some consistent stimulus policies to cheer up the economy as soon as possible.</p>
<h2>What Japan has tried so far</h2>
<p>The Japanese economy has been stuck for a very long time. From 1995 to 2005, Japan’s GDP dropped from nearly US$5.3 trillion to US$4.5 trillion, at the same time the country also experienced deflation. </p>
<p>When Shinzo Abe was elected as Prime Minister of Japan, he set out a series of economic policies, <a href="https://theconversation.com/au/topics/abenomics-5622">dubbed “Abenomics”</a>, to try and promote private investment, reviving the national economy.</p>
<p>Another aim in Abenomics is to correct excessive yen depreciation, however this hasn’t proved successful yet. After Abe nominated Haruhiko Kuroda as the new governor of the Bank of Japan in 2013, the yen depreciated drastically. In 2011, the exchange rate between US dollar and Japanese yen was almost 76 yen to 1 US dollar, after Kuroda’s nomination, it went above 100 yen to 1 US dollar.</p>
<p>The Bank of Japan has been implementing bold expansionary monetary policies since Kuroda’s nomination, thinking that Japan’s economy is in the process of slow recovery. The first tool the bank tried to stimulate economic activity was an extensive bond buying operation.</p>
<p>When a central bank buys bonds, it injects money into a country’s financial sector. The expectation is the injected money will flow into the rest of the economy and stimulate production and consumption. This in turn will start to raise price levels, helping the government achieve an inflation target.</p>
<p>This worked for a while in Japan. However, recently deflation shows the effect of this monetary policy has faded. </p>
<p>According to <a href="http://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?end=2015&locations=JP&start=2010">IMF data</a>, the annual inflation rate in 2013 was 0.36%. In 2014 it showed some promise increasing to 2.75%. But it went back to 0.79% in 2015. </p>
<p>Japan’s Bureau of Statistics shows that the consumer price index for Japan, one of the measures of inflation, was 99.6 in July. It went down by 0.2% from the previous month and down by 0.4% over the year. All signs of deflation. </p>
<p>There could be many reasons for this sort of deflation, but one of the most serious issues in Japan is enormous national debt. Japan’s <a href="http://www.oecd.org/eco/surveys/Japan-2015-overview.pdf">gross government debt</a> is 226% of GDP and Japan’s fiscal situation is getting into territory we have never seen.</p>
<p>In April 2014 consumption tax was raised from 5% to 8% in a bid to increase government revenues and fight debt. But according to the <a href="https://www.imf.org/external/pubs/ft/scr/2015/cr15197.pdf">IMF</a>, the increment of public debt has been decreased but the public debt itself is not decreasing. </p>
<p>Huge national debt is a threat to sound economic systems and maintaining the social security system, or public services. Japan needs to reduce national debt as soon as possible.</p>
<p>Since January 2016 the Bank of Japan has been charging a negative interest rate on a portion of reserves that commercial banks keep with the bank. This means the central bank charges a fee to the commercial banks, instead of these banks receiving some interest in return for depositing money. </p>
<p>The aim is to encourage banks to allocate money to more productive uses for the economy, such as investing in businesses. <a href="http://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS">World Bank data</a> shows that this sort of credit to the private sector has been going up in Japan since 2011 but there hasn’t been a noticeable response in the economy.</p>
<p>If a central bank succumbs to government pressure and implements an overly aggressive expansionary monetary policy, it can lead to dysfunction of the whole economy. Japanese law states the importance of the central bank’s independence and neutrality from the government in deciding monetary policy. But the law also states that the Bank of Japan’s basic monetary policy should be consistent with the economic policy of the government.</p>
<p>Whether or not this framework will continue to work depends on whether fiscal and monetary policies can work in synergy in the Japanese economy.</p><img src="https://counter.theconversation.com/content/65806/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shino Takayama received funding from ARC from 2010 to 2012. </span></em></p>The Bank of Japan is trying yet another measure to fight deflation but the economy shows no signs of responding.Shino Takayama, Research Fellow in the Humanities and Social Sciences, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/633982016-08-02T20:19:07Z2016-08-02T20:19:07ZBusiness Briefing: Abenomics fails to address Japan’s true woes<p>New moves by the Bank of Japan (BoJ) to modestly extend its monetary policy appears to suggest the country is <a href="http://theconversation.com/is-the-concept-of-helicopter-money-set-for-a-resurgence-63277">running out of measures</a> to combat its sluggish economy.</p>
<p>Earlier in 2016, the bank introduced negative interest rates and will continue its bond buying program. But Shino Takayama, research fellow in economics at the University of Queensland says the effect of monetary policies don’t last long in Japan, as the debt to GDP ratio remains high.</p>
<p>The BoJ’s moves are supposed to work in tandem with the fiscal plan of Japan’s Prime Minister, Shinzo Abe (known as <a href="https://theconversation.com/au/topics/abenomics">“Abenomics”</a>). But the strategy hasn’t seemed to help so far and Takayama says its time for the government to address the root of the problems - income inequality and an ageing population hesitant to spend money.</p><img src="https://counter.theconversation.com/content/63398/count.gif" alt="The Conversation" width="1" height="1" />
The Japanese government needs to improve job security and address income inequality as "Abenomics" fails to deliver.Jenni Henderson, Section Editor: Business + EconomyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/478472015-10-06T00:28:09Z2015-10-06T00:28:09ZKicking pacifism: Japan’s pivot to militarism defies popular will<p>Japanese Prime Minister Shinzo Abe <a href="http://www.theatlantic.com/international/archive/2015/09/japan-pacifism-article-nine/406318/">got his policy wish</a> late into the night of September 18. Abe’s coalition government, which has majorities in both houses of the national Diet, passed controversial legislation that <a href="http://www.japantimes.co.jp/news/2015/06/05/national/politics-diplomacy/experts-blast-constitutional-reinterpretation-lower-house-session/#.VgI1j8uqpBc">reinterprets Article 9</a> of the constitution. The reinterpretation allows Japanese troops to engage in military action overseas for the first time since the second world war. </p>
<p>This move is no surprise. Abe’s government (now in its second term) has consistently been vocal about national defence. And security laws have been changing as far back as April 2014 when the <a href="http://thediplomat.com/2015/05/how-japan-plans-to-conquer-the-global-arms-market/">government relaxed restrictions</a> on military hardware exports.</p>
<h2>Three justifications for kicking pacifism</h2>
<p>Commentators in Japan and abroad have settled on three explanations for Abe’s widely unpopular national security policies. </p>
<p><a href="http://www.theguardian.com/world/2015/sep/23/china-admonishes-malcolm-turnbull-on-south-china-sea-comments">China</a> and <a href="http://www.upi.com/Top_News/World-News/2015/09/21/North-Korea-blames-US-for-Europe-refugee-crisis-scolds-Japan-for-war-bills/4121442848587/">North Korea</a> are the first and main explanation: their military belligerence in the Asian region is unsettling for a world still controlled by Western powers. Particularly in recent times, Japan sees China’s growing assertiveness as a great cause for concern. Abe wants to bolster defence to help stabilise the region.</p>
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<a href="https://images.theconversation.com/files/96389/original/image-20150928-17703-14esiit.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/96389/original/image-20150928-17703-14esiit.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/96389/original/image-20150928-17703-14esiit.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=611&fit=crop&dpr=1 600w, https://images.theconversation.com/files/96389/original/image-20150928-17703-14esiit.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=611&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/96389/original/image-20150928-17703-14esiit.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=611&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/96389/original/image-20150928-17703-14esiit.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=768&fit=crop&dpr=1 754w, https://images.theconversation.com/files/96389/original/image-20150928-17703-14esiit.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=768&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/96389/original/image-20150928-17703-14esiit.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=768&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Selling Japanese weapons like the Type 93 air-to-ship missile could be good for business.</span>
<span class="attribution"><a class="source" href="https://en.wikipedia.org/wiki/Type_93_Air-to-Ship_Missile#/media/File:JASDF_ASM-2_Dummy.JPG">Wikimedia Commons/Hunini</a></span>
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<p>A <a href="http://www.nytimes.com/2015/07/20/opinion/japan-wrestles-with-its-pacifism.html?_r=0">second explanation</a> has to do with Japan’s desire to support international efforts, particularly by the United Nations, to quell conflicts overseas. The military support that Japan can give to the UN will help reduce violence abroad. This, it has been said, doubles as a contrived Buddhist explanation – perhaps one used to appease the anti-nuclear, peace-loving, Kōmeitō party that forms the minority in Abe’s coalition.</p>
<p>The final explanation links to <a href="https://en.wikipedia.org/wiki/Abenomics">“Abenomics”</a>, Abe’s economic policies. Reinterpreting Article 9 bolsters the government’s earlier legislation to enable military hardware exports. Kicking 70 years of pacifism is good for business.</p>
<h2>A scar on Japanese democracy</h2>
<p>However convincing these arguments may be, there’s also one pivotal counter-argument that both the Japanese and international media have largely glossed over. It rolled off Opposition Leader Tatsuya Okada’s protesting tongue: the Abe government’s security policies would, he argued, “leave a big scar on Japanese democratic politics”. </p>
<p>What did he mean by this?</p>
<p>At face value, Okada might simply be pointing out the tactics of Abe’s government in steam-rolling opposition in parliament and in the public sphere as well. Their heavy-handed tactics spit in the eye of the Diet’s more consultative traditions. </p>
<p>It’s important to remember here that, unlike many neighbouring countries, few Japanese citizens have expressed the desire to fight another war. Passing legislation that gives power to the Japanese government to wage future war is simply “unforgivable”, says Hidenori Shida, a 65-year-old IT engineer.</p>
<p>Koichi Nakano of Tokyo’s Sophia University agrees, <a href="http://www.bbc.com/news/world-asia-34278846">saying</a> that Japan’s postwar pacifism is something the majority of Japanese people embrace as part of their culture. They don’t want to be militaristic. Instead, what they want is for “the government to slow down so that people get a better understanding of what is happening”.</p>
<p>To date, those who share the government’s position on remilitarising are <a href="http://ajw.asahi.com/article/behind_news/social_affairs/AJ201509140020">in the minority at 29%</a>. The vast majority believe the new security legislation is utterly unnecessary and, in some instances, unjustified. </p>
<h2>Pride in pacifism</h2>
<p>Japan’s post-war democratic experiment has, to some extent, been a unique species. Few democracies can claim to boast an entirely pacifist foreign policy. Consider, for example, the US, Switzerland, Germany, Belgium, the UK, France, South Korea, Austria, Canada, Greece and Norway. Or take Sweden, which is consistently <a href="http://www.theguardian.com/world/2015/jun/26/swedish-arms-sales-buyers-democratic-credentials-report">singled out for selling arms</a> to potentially dangerous states. All of these democracies manufacture and sell firearms, bombs, missiles or other instruments of war.</p>
<p>Japan has been the odd democracy out. Until now. </p>
<p>So the issue Abe’s government now faces is this: how can it claim to be representative given that the <a href="http://www.irishtimes.com/news/world/asia-pacific/mass-protests-in-tokyo-as-japan-moves-to-ditch-pacifism-1.2287221">majority of electors in Japan</a> do not want the guilt of bloodstained hands? Unlike their international counterparts, the people of Japan have made their views clear: they want their democracy to remain the odd one out. </p>
<p>Will the Abe government, which has overridden the popular will by rushing through deeply unpopular security legislation, listen to the people and change its course? Should it?</p><img src="https://counter.theconversation.com/content/47847/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Shinzo Abe’s government (now in its second term) has consistently been vocal about Japan’s national defence.Jean-Paul Gagnon, Assistant Professor in Politics, University of CanberraAnthea McCarthy-Jones, Assistant Professor in International Relations, University of CanberraMark Chou, Associate Professor of Politics, Australian Catholic UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/459082015-08-12T05:37:55Z2015-08-12T05:37:55ZDealing with Greek debt needs a radical rethink – lessons from Japan<figure><img src="https://images.theconversation.com/files/91437/original/image-20150811-11101-imo50m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/gallery-578401p1.html">shutterstock.com</a></span></figcaption></figure><p>After weeks of negotiations and months of uncertainty, Greece <a href="http://www.bbc.co.uk/news/business-33858660">has agreed to</a> an €86 billion bailout deal with its international creditors. But there are uncertainties about whether its terms are sufficient – particularly the question of <a href="https://theconversation.com/greece-when-is-it-time-to-forgive-debt-44022">debt relief</a>. And then there is Europe’s underlying need to come up with a more sustainable way of dealing with growing sovereign debt. </p>
<p>The big question is how? We certainly don’t want to go through the same kind of crisis we have seen in Greece if other European countries such as Portugal, Spain or even Italy find themselves in trouble. </p>
<p>And yet, Greece’s sovereign debt is not the world’s largest. Though presented as a mountainous <a href="http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=teina225&plugin=1">177% of GDP</a>, Japan is the global leader in public sector debt, which lies at a far more impressive level of <a href="http://www.tradingeconomics.com/japan/government-debt-to-gdp">234% of GDP</a>.</p>
<p>Given such an astounding number, I wondered what I might see when I stepped off the plane in Tokyo recently. A few weeks prior, I had been in Athens and witnessed long queues outside cash machines, impassioned political debate from nearly everyone you met, and massive street protests. Greece was a <a href="https://theconversation.com/why-the-no-vote-was-a-triumph-of-democracy-over-austerity-44316">society on the edge</a>. </p>
<p>But Japan was utterly different. The cash machines dispensed any amount of cash. The banks had healthy balance sheets. In a week of criss-crossing Tokyo, I only saw one tiny protest manned by a few elderly people. Those I spoke to knew their nation faced challenges. But the big issues of national debate were <a href="https://theconversation.com/japan-is-regaining-lost-military-muscle-and-the-us-needs-it-42277">defence policy</a> and the <a href="http://www.theguardian.com/world/2015/jul/17/japan-scraps-zaha-hadids-tokyo-olympic-stadium-design">Olympic stadium</a> – not national debt. </p>
<h2>Big differences</h2>
<p>Why, I asked myself, should Greece be on its knees, while Japan appeared to be quietly performing well? As I started to dig, I discovered a few important differences. The first is that the Japanese government debt is partially the creation of accounting. A significant chunk of Japanese government debt is owed to itself. If you account for the amount of debt owed to other parts of the government, the debt to GDP ratio falls to <a href="http://www.telegraph.co.uk/finance/comment/10392248/Its-not-yet-the-end-of-the-world-as-we-know-it-but-watch-Japans-debt-grow.html">140%</a>. </p>
<p>The second distinguishing factor of Japanese debt is that it is largely owed to Japanese investors. About 90% of debt is <a href="https://cama.crawford.anu.edu.au/amw2013/doc/DefyingGravityEconomicPolicy20130317.pdf">held by Japanese residents</a>. The Japanese have very high rates of household savings, and much of this is invested in Japanese government bonds. This is strikingly different to Greece, where the great majority of the country’s debt is owed to foreigners – the IMF, eurozone countries and the European Central Bank. This means that, while Japan relies on its own population (such as pensioners and depositors), the Greeks have to negotiate with Northern European technocrats. And as they have recently discovered, this can significantly undermine national sovereignty. </p>
<p>The third big difference is that Japan still has significant room to raise taxes to pay off its debt. Currently the country’s consumption tax <a href="http://www.ft.com/cms/s/0/438d8d36-b2a0-11e4-b234-00144feab7de.html#axzz3iQ4B9wD1">stands at 8%</a>. This is much lower than rates in other developed countries such as the UK <a href="https://www.gov.uk/vat-rates">where VAT is 20%</a>. The rate in Greece is currently <a href="http://www.theguardian.com/business/2015/jul/13/greece-bailout-agreement-key-points-grexit">between 6.3% and 23%</a> for different kinds of goods. </p>
<p>However, there is a catch. Recently, the Japanese government tried raising the rate to 10%, which <a href="http://www.ft.com/cms/s/0/a0a023c0-2f2f-11e4-a054-00144feabdc0.html">caused the economy to go into reverse</a>. As a result, the government delayed the tax rise until 2017. Some Japanese economists claim the country’s debt is unsustainable and have urged the government to tackle it more aggressively <a href="http://www.ft.com/cms/s/0/1ccc6df2-a86f-11e3-a946-00144feab7de.html#axzz3gYFcJlxS">through wide-ranging austerity</a> measures. Demographic factors make this more urgent. Japan’s rapidly ageing society will mean that tax receipts fall as the workforce shrinks in the coming years. </p>
<h2>The issue of control</h2>
<p>The next big difference from Greece is that Japan has control over its own monetary policy. If it wants to start printing money, it can. Thus, the Bank of Japan has been printing money to buy government debt, helping turn its public debt burden <a href="http://www.project-syndicate.org/commentary/japan-monetization-government-debt-by-adair-turner-2015-03">into an illusion</a>. Greece, in contrast, does not have this option. Tied as it is to the eurozone, it cannot decrease the value of its currency in order to make its debt cheaper and exports more attractive. </p>
<p>Then there is Japan’s recent fiscal policy. In response to lacklustre economic performance (and consequently low tax receipts), the Abe government has launched a programme of <a href="http://www.cfr.org/japan/abenomics-japanese-economy/p30383">massive fiscal stimulus</a>. This traditional Keynesian measure has led to modest growth. Rather than savagely cutting back state spending at a time when the economy is languishing (as Greece has done as part of its bailout packages), Japan has done exactly the opposite – used state spending to encourage economic activity.</p>
<p>Japan has also continued to have many basic economic strengths. It has leading global companies which are well run (think big companies like Toyota and Sony). But it also has strengths in a wide range of other sectors including finance, retail and information services. It also has an <a href="https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp242.pdf">effective public sector</a> which is able to deliver public services and support Japanese industry. By contrast, the Greek economy’s strengths are largely in two areas: shipping and tourism. Its public sector is <a href="http://www.theguardian.com/world/2014/dec/03/greece-corruption-alive-and-well">notoriously corrupt</a>. </p>
<p>The final significant difference is that while Japan is seen as a reputable borrower on international markets, Greece has lost legitimacy with most of its creditors after tense negotiations and repeated rounds of bailouts. The IMF has publicly stated it <a href="http://www.nytimes.com/2015/07/15/business/international/international-monetary-fund-proposed-greek-debt-relief.html?_r=0">doubts Greece’s ability to repay its debts</a>. This is not the case for Japan.</p>
<h2>Lessons from Japan</h2>
<p>Everything is not rosy in Japan and the country clearly has to deal with its huge national debt. But these striking differences show there are lessons that Greece – and Europe more widely – might learn from living and dealing with debt, without it being such a crisis: </p>
<ol>
<li><p>When debt is owned by foreigners, they are often more keen on appropriating assets and enforcing harsh austerity policies that they don’t have to live with. </p></li>
<li><p>You can cut debt by creating growth rather than just implementing austerity. Japan has showed that traditional Keynesian policies can create growth, which raises tax receipts and can be used to pay down debt. </p></li>
<li><p>Having control over your monetary policy is important. As the eurozone controls how much money is created, individual countries can’t print their way out of debt. </p></li>
<li><p>Building a strong industrial and public sector base for ongoing wealth creation is vital. This means building companies which offer genuinely excellent products and services and ensuring an effective and well-run public sector. </p></li>
<li><p>Maintaining legitimacy with your creditors seems to be of the utmost importance. Although many of Yanis Varoufakis’s detractors now admit that the former finance minister’s analysis of the dynamics behind the Greek debt crisis were broadly correct, they also <a href="http://www.ft.com/cms/s/2/edb4cfe8-2b0b-11e5-acfb-cbd2e1c81cca.html#axzz3gYFcJlxS">clearly loathe the man</a>. This might not be the best negotiating position when asking for some leniency from debtors. </p></li>
</ol>
<p>Ultimately, however, Japan shows that alternatives to hard-nosed austerity are possible. The European experience has shown us that debt crises can effectively shift the power to decide on policies from democratically elected national governments to unelected technocrats from international financial agencies. Furthermore, debt crises can often trap economies in negative spirals of declining tax receipts, cuts to spending and a rapidly shirking economy. </p>
<p>Fresh thinking is clearly needed if we want to avoid a perpetuation of the Greek and eurozone crisis. The very idea of sovereign debt being written in stone is <a href="http://blogs.lse.ac.uk/lsereviewofbooks/2014/05/23/book-review-rethinking-sovereign-debt-politics-reputation-and-legitimacy-in-modern-finance-odette-lienau/">worth challenging</a> along with a rethink of how risk is shared more fairly between creditors and debtors, so that when things go bad they both share the pain. </p>
<p>As Japan shows, living with high levels of debt does not have to be the Greek tragedy we have seen in recent months and it’s time to get out of the one-way street of austerity.</p><img src="https://counter.theconversation.com/content/45908/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andre Spicer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Japan has higher debt levels than Greece and yet it doesn’t need international bailouts. Why?Andre Spicer, Professor of Organisational Behaviour, Cass Business School, City, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/344382014-11-19T13:08:59Z2014-11-19T13:08:59ZAbe can win Japan’s snap election but he needs to win big<p>Japanese Prime Minister Shinzo Abe’s decision to call a <a href="http://www.bbc.co.uk/news/world-asia-30092633">snap election</a> for December 14 comes after what has been a rather bad week for him. Japan has slipped back into recession for the first time since 2012 and Abe has seen his popularity ratings drop below 50% for the first time.</p>
<p>Abe clearly believes he needs to act fast if he is to survive this crisis and avoid falling victim to the factional politics that are so often the cause of leadership upheavals. He doesn’t have to hold an election for another two years so in calling this vote, he is aiming to maximise his remaining popularity, bolster support for <a href="https://theconversation.com/despite-abenomic-growth-japan-still-needs-reform-14447">Abenomics</a> and prevent a political ousting. </p>
<p>Japanese prime ministers are not renowned for their staying power. Factional politics feature prominently in the day-to-day running of the country and internal jostling is intensified in periods of coalition government. Abe leads a coalition government made up of his Liberal Democratic Party and its partner party, the Komeito – so he has experienced this jostling for some time.</p>
<p>He and his party are likely to win a majority in this December election though. The LDP currently occupies 294 out of the 480 seats of the Lower House and starts the campaign in a strong position.</p>
<p>The key for Abe is to ensure that the LDP’s majority is large enough to give him room for manoeuvre. The Komeito currently only holds 31 seats, while the opposition Democratic Party of Japan has 54 seats. Abe needs to urgently reduce the political tensions around him if he is to succeed in his economic reform agenda.</p>
<p>The prime minister is a man with a mission. He is strongly committed to consolidating his economic reforms, based around quantitative easing, fiscal stimulus and structural reform. A newly secured mandate from the electorate would give him the space to pursue his plans.</p>
<p>He has other goals aside from Abenomics. The disaster at <a href="https://theconversation.com/powering-japan-after-fukushima-4693">Fukushima</a> led to the closure of Japan’s nuclear reactors, and Abe is striving to have them restarted, in order to reduce the high costs of energy to Japanese consumers. Since the 2011 disaster, electricity prices have increased by dramatically and Japan remains vulnerable to external energy providers.</p>
<p>On the political front, Abe is keen to overturn a half century of a particularly Japanese form of pacifism. He wants to enable the country’s well-equipped Self Defense Forces to become an internationally accepted army, navy and air force. Instead of existing to defend Japan, the force would be deployable elsewhere too.</p>
<p>This is linked to Japan’s sense of insecurity in the region, particularly when it comes to the rise of China. Bolstering the military reconfirms Japan’s ongoing commitment to its security treaty with the United States.</p>
<p>Abe also wants to sign the US-led <a href="https://theconversation.com/what-you-need-to-know-about-the-trans-pacific-partnership-21168">Trans-Pacific Partnership</a>, which would establish a free trade agreement among the states around the Pacific Ocean. Japanese farmers, who have always represented a powerful political lobby in Japan, estimate that up to 90% of Japanese agriculture could be severely affected by the TPP, and Abe will have his work cut out to convince them of its value.</p>
<p>Without a resounding mandate for the next two years, Abe will struggle to meet these goals. He stands out as a bold leader and the electorate has supported his ambitions so far. But while he is not necessarily risking his position with the snap election, he is gambling on his ability to push through the big changes he has been seeking since the start of his premiership.</p><img src="https://counter.theconversation.com/content/34438/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Julie Gilson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Japanese Prime Minister Shinzo Abe’s decision to call a snap election for December 14 comes after what has been a rather bad week for him. Japan has slipped back into recession for the first time since…Julie Gilson, Reader in Asian Studies, University of BirminghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/344012014-11-18T23:15:44Z2014-11-18T23:15:44ZAbe takes a high-stakes gamble in calling an early election in Japan<figure><img src="https://images.theconversation.com/files/64912/original/dgmfdfzp-1416346196.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Japanese Prime Minister Shinzo Abe is presenting a snap election as a referendum on his once-lauded policy of 'Abenomics'.</span> <span class="attribution"><span class="source">EPA/Franck Robichon</span></span></figcaption></figure><p>It may seem politically counter-intuitive for a prime minister to seek an early election just when the economy has gone into recession. But following his return to Japan from the G20 Leaders’ Summit in Brisbane, Shinzo Abe has done just that. </p>
<p>Although an election is not required until late 2016, Abe has <a href="http://mainichi.jp/english/english/newsselect/news/20141118p2g00m0dm054000c.html">called a snap election</a> for the Lower House of the Diet only halfway through his Liberal Democratic Party (LDP) government’s first term. The Diet will be dissolved on November 21; the election campaign proper will start December 2; the election will be held on December 14. </p>
<p>Since being elected in December 2012, the LDP and its coalition partner, the Komeito Party (KP), have held a <a href="http://www.shugiin.go.jp/internet/itdb_english.nsf/html/statics/english/strength.htm">comfortable majority</a> of 325 seats in the 480-member lower house.</p>
<h2>Economic issues</h2>
<p>Japan’s economy <a href="http://www.bbc.com/news/business-30077122">slumped 7.3%</a> in the quarter after the consumption tax was raised from 5% to 8% in April. This was an attempt to begin to claw back Japan’s public debt, which is among the developed world’s highest at around <a href="http://www.tradingeconomics.com/japan/government-debt-to-gdp">220% of GDP</a>. Growth continued to decline by 1.6% in the July-September quarter. This <a href="https://fortune.com/2014/11/17/japan-skids-back-into-recession-in-3q/">surprised economists</a>, who were projecting a recovery for the quarter of least 2.1%.</p>
<p>Abe’s cabinet was due to decide whether to proceed with a further increase in the consumption tax to 10% from next October. Abe will now <a href="http://www3.nhk.or.jp/nhkworld/english/news/20141118_40.html">seek a mandate</a> to delay the raise until April 2017.</p>
<p>However, an election is not required for this. The opposition parties generally do not favour the increase, so any required amending legislation for a delay would easily pass the Diet. The consumption tax delay is therefore being used rather artificially as a pretext to call the early election, and thus act as a political circuit-breaker for the LDP before the economy deteriorates further.</p>
<p>The Diet is expected to approve a supplementary budget before it is dissolved. This budget is aimed at providing stimulus spending of more than two billion yen, particularly directed towards rural and regional areas, whose ageing and shrinking populations are already <a href="http://the-japan-news.com/news/article/0001726492">facing stagnation</a>. </p>
<p>Also, the yen weakening to a seven-year low has raised the cost of imports, adding to the burden on consumers. It has also raised the energy costs for businesses. The softer yen has yet to produce a reduction in a record series of trade deficits, although Japan’s stock market recently reached a <a href="http://www.reuters.com/article/2014/11/12/markets-global-idUSL3N0T203A20141112">seven-year peak</a>.</p>
<h2>The political scene</h2>
<p>Abe’s cabinet has suffered a recent decline in its approval ratings to its <a href="http://www.reuters.com/article/2014/11/10/us-japan-politics-poll-idUSKCN0IU13A20141110">lowest point of 44%</a>. This came in the wake of two ministerial resignations in October due to electoral funding scandals. </p>
<p>Despite this, the main tactical motivation for the timing of Abe’s decision is to take advantage of a weak and divided opposition. The main opposition party, the Democratic Party of Japan (DPJ), remains far behind in <a href="http://www.reuters.com/article/2014/11/12/us-japan-politics-election-idUSKCN0IV28D20141112">recent opinion polls</a> at 7.9%. This compares to 36.6% support for the LDP, which will be hoping voters still regard the DPJ as unfit to return to office. The DPJ presided over a politically inept period of government from 2009 to 2012 under a rotating series of prime ministers.</p>
<p>Japan’s political spectrum is further splintered by a bewildering range of shifting and reforming parties, which endure even lower levels of public support. These include the Japanese Communist Party; the nationalist Japan Innovation Party (JIP), which this year suffered a defection of ultra-conservative members who formed the Party for Future Generations; the populist People’s Life Party (PLP); the neoliberal Your Party (YP), which is facing a potential split; and the progressive Social Democratic Party (SDP). Many independent candidates are also expected to contest the election.</p>
<p>The generally high level of political apathy among the Japanese electorate – around 40% of those polled express no support for any party – and voter turnout in recent elections of <a href="http://www.idea.int/vt/countryview.cfm?id=114">around 60%</a> have also usually been an advantage for incumbent LDP governments.</p>
<p>An election victory – even one with a reduced majority – would allow the LDP to continue its plans to pass a controversial <a href="http://www.bbc.com/news/world-asia-30093827">range of legislation</a>. This includes restarting nuclear reactors and reinterpreting the constitution to allow participation in “collective self-defence” operations with allied countries, potentially including Australia. This would incorporate a further easing of restrictions on defence exports, which would allow the future sale of submarines <a href="http://asia.nikkei.com/Politics-Economy/International-Relations/Japan-US-move-toward-joint-submarine-development-with-Australia">to Australia</a>. </p>
<p>Japan is also likely to continue to participate in finalising negotiations on the Trans-Pacific Partnership despite opposition from the farmers’ lobby.</p>
<p>These unpopular issues could prove problematic for the LDP in the campaign – but only if the opposition parties manage to become competent enough to capitalise on them. The DPJ has <a href="http://the-japan-news.com/news/article/0001715963">held talks</a> with the YP, JIP, SDP and PLP to potentially form a coalition against the LDP, but any such alliance is likely to prove too unwieldy and ideologically fractious to pose any serious threat to the LDP-KP coalition.</p>
<p>Abe is therefore likely to prevail, extend the term of his government to 2018 and consolidate his leadership among the various factions of the LDP. He is presenting the election as a referendum on his once-lauded policy of <a href="https://theconversation.com/abenomics-a-fix-for-japans-ailing-economy-and-a-boost-for-australia-12487">“Abenomics”</a>, centred on a combination of fiscal stimulus, extensive quantitative easing and monetary expansion. Structural reform, however, has so far proved more elusive. </p>
<p>Abe claims to be determined to finally break Japan’s economy out of its decades-long deflationary slump. However, with Japan sinking back into its fourth recession since 2008, the gloss of Abenomics has definitely worn off. That makes this election a risky call.</p><img src="https://counter.theconversation.com/content/34401/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Craig Mark does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It may seem politically counter-intuitive for a prime minister to seek an early election just when the economy has gone into recession. But following his return to Japan from the G20 Leaders’ Summit in…Craig Mark, Associate Professor of International Studies, Kwansei Gakuin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/343942014-11-18T18:29:48Z2014-11-18T18:29:48ZJapan’s snap election is about more than just Abenomics<p>The decision by Japan’s prime minister, Shinzo Abe, to <a href="http://www.bbc.co.uk/news/world-asia-30092633">call a snap election</a> barely two years into a four-year term demonstrates a degree of political flexibility other world leaders can only envy. </p>
<p>Abe did not need to go to the polls until 2016. Instead, he announced on November 18 he would dissolve the lower house of the Japanese Diet a few days later and hold a general election on December 14 2014. There are several reasons behind the decision, including the failure of <a href="https://theconversation.com/uk/topics/abenomics">Abenomics</a> to revive the Japanese economy.</p>
<p>Abenomics is the neologism given to his three-pronged strategy to revitalise Japan’s economy, following the victory of the conservative Liberal Democratic Party (LDP) in the December 2012 general election. It aims to say sayonara to deflation and slow economic growth through fiscal stimulus, monetary easing and structural reform. But the increase in the consumption tax <a href="http://www.economist.com/blogs/banyan/2014/04/japan-s-consumption-tax-hike">from 5% to 8% in April 2014</a> contributed to a contraction in the country’s GDP of 1.6% in the third quarter after a whopping 7.3% contraction in the second quarter, putting the economy technically in a <a href="http://www.bbc.co.uk/news/business-30076942">recession</a>. </p>
<p>As a result, the prime minister has decided to delay until April 2017 another increase in the consumption tax to 10% scheduled for October 2014, and seek a mandate for the continuation of Abenomics. For the leader of the opposition, Japan Restoration Party, the dissolution of the lower house symbolises the failure of the government’s tax increase.</p>
<h2>More than economics</h2>
<p>But economics is not the only reason for the prime minister’s decision. While the underlying motivation for calling the election is no doubt the expectation that Japan’s economic fortunes will not revive soon, giving the LDP a better chance of claiming victory now than in the future, the overall political situation makes winning a new mandate much easier. </p>
<p>Although his popularity has started to fall, postponing the increase in the consumption tax will be welcomed by a large number of voters. Besides, the opposition parties are unlikely to be able to take advantage of any downturn in support and form an alternative government to the LDP, whether Abe is again in coalition with his junior partner, the Komei Party, or makes some other political arrangement. </p>
<p>When Abe took office for the second time in 2012, he brought to an end the Democratic Party of Japan’s three years in power – they <a href="http://www.economist.com/blogs/banyan/2012/12/japans-election">crashed from 230 to 57 seats</a>. No-one expects a revival of the party’s fortunes this time around. A number of other parties have been splintering and the potential for more change cannot be ruled out. In short, the opposition’s disarray plays into the prime minister’s hands.</p>
<h2>The division of public opinion</h2>
<p>Still, this does not mean Abe’s policies have gained all-round support, with a number of issues dividing public opinion, especially with regard to security. Significantly, the prime minister has introduced a <a href="https://theconversation.com/abes-australia-visit-comes-in-the-wake-of-constitutional-controversy-28719">re-interpretation of the Japanese constitution</a> to permit the Japanese Self-Defence Forces to participate in collective self-defence. This is part of a strategy to promote Japan’s international role, but most importantly signals a deepening and widening of defence cooperation with its ally, the United States. </p>
<p>While the prime minister was ultimately unable to revise the constitution as a result of the opposition as well as public opinion (which shows its strength and opposition to constrain the government’s security policy), collective self-defence has increased tension with some of Japan’s neighbours, especially China and the two Koreas. </p>
<p>But tensions are domestic as well as international. In particular, its alliance with the US is premised on Japan providing bases for the military. These are the source of a great deal of tension, particularly in the parts of the country where the majority are located, namely <a href="https://theconversation.com/australia-is-now-uncle-sams-keystone-of-the-pacific-learn-from-okinawa-11041">Okinawa</a>. The government’s attempts to relocate an important base on the island has put it on a collision course with the prefecture. And, the LDP’s candidate lost in a key mayoral election earlier this year and the <a href="http://www.bbc.co.uk/news/world-asia-30074445">gubernatorial election</a> that took place just before Abe’s snap announcement, which doesn’t bode well for things to come.</p>
<p>How the conflict over the base relocation in Okinawa is dealt with by the new administration is just as much a part of Japanese democracy as is the forthcoming national election. Its character will help to be determined by the new government’s response to the local calls for a more equitable distribution of the bases, whoever wins power.</p><img src="https://counter.theconversation.com/content/34394/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Glenn D. Hook does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The decision by Japan’s prime minister, Shinzo Abe, to call a snap election barely two years into a four-year term demonstrates a degree of political flexibility other world leaders can only envy. Abe…Glenn D. Hook, Professor of Japanese Politics and International Relations, University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/305382014-08-18T05:19:27Z2014-08-18T05:19:27ZJapan’s central bank is out of control and must be tamed<p>In the second quarter of this year Japan recorded its <a href="http://www.bbc.co.uk/news/business-28767708">largest GDP contraction</a> since the earthquake and tsunami hit in 2011. This time, the single most important reason for the downturn is technical: demand surged in the first quarter (and the one before that) as consumers spent more ahead of a sales tax increase in April. Of course, the figures are not nearly as bad when one considers the more sensible year-on-year growth rates of nominal GDP: Consumption was flat on this basis and GDP expanded by 1.9%. </p>
<p>Nonetheless, the news came as a disappointment to all those observers and investors who had hoped that new policy initiatives from the prime minister, Shinzo Abe, would make a more dramatic difference and finally end Japan’s mammoth slump for good. </p>
<p>At first, it seemed Abe had the right idea. His election platform, which produced a landslide victory in late 2012, was centred on the single most important factor in Japan’s record-breaking depression: a central bank that is too independent, unaccountable and out of control, abusing its excessive powers to push through an austerity programme designed to implement a political agenda of deregulation, liberalisation and privatisation.</p>
<p>Alas, Abe addressed the issue only with rhetoric, not with deeds. Once in power he appointed a <a href="http://www.ft.com/cms/s/0/3f42d802-84e5-11e2-891d-00144feabdc0.html#axzz3ATdIAxkv">team of radicals</a> who thought the bank should be more engaged, not less, and reneged on his promises to reduce the vast powers of the Bank of Japan.</p>
<p>True “quantitative easing” – which I first defined in 1995 as a set of policies to increase credit creation for productive purposes, such as bank lending to small businesses – has mostly been ignored. Instead, the Bank of Japan has redefined the expression to include largely irrelevant policy measures, such as increasing banks’ reserves at the central bank.</p>
<p>Abe’s advisers have now convinced him to shift attention away from true quantitative easing to measures such as the raised sales tax and further privatisation.</p>
<h2>Supply and demand</h2>
<p>This never made sense, as Abe correctly recognised in his election campaign: the 20-year slump has not been due to Japan’s economic structure, the so-called “supply side”. Economists talk of the “factors of production” that go into determining economic growth: land, labour, capital, technology – and over this period these factors haven’t declined nor become less productive.</p>
<p>Furthermore, Japan holds the world record for the longest period of deflation in any modern economy. As a result, even though headline GDP contracted by an average of 0.4% each year in the decade to 2013, Japan actually averaged 0.9% real GDP growth. The differences is thanks entirely to record deflation of 1.3% (real growth equals nominal growth minus inflation, hence in this case nominal GDP contraction plus deflation – -0.4% minus -1.3% – is, hey presto, positive real GDP growth). </p>
<p>What matters to businesses, employees and the government is, however, nominal growth, not so-called “real growth”: investment, turnover and profits are in nominal terms, salaries and wages are in nominal terms, and tax revenues and revenues from bond issuance are all in nominal terms.</p>
<p>Deflation and contracting nominal GDP are prime evidence that the problem has been a lack of demand, not supply: a lack of supply pushes up prices, a lack of demand pushes them down. With record unemployment and low-capacity utilisation it is clear that Japan has been suffering from excess supply and lack of demand.</p>
<h2>Stimulating Japan?</h2>
<p>But haven’t all the usual demand stimulation policies been tried over the past 20 years – and failed miserably? True, government spending programmes and interest rate reductions have been tried, but they couldn’t help Japan in the first place. The reason is the particular nature of the recession that began in about 1992: it is an economic slump due to a post-bubble banking-crisis. </p>
<p>During the 1980s, the Bank of Japan ordered Japanese banks to vastly increase bank credit creation for non-GDP (that is, speculative or financial) transactions. Such bank credit creation is always unsustainable, producing an asset bubble that must end in a banking crisis and recession.</p>
<p>That is what happened in around 1990, when bank credit creation slowed. The first speculators went bust, leaving bad debts in the banking system. Risk-averse banks lowered credit creation further, exacerbating the financial slump. Banks soon stopped lending to the real economy for productive purposes and as a result GDP growth slowed, the economy entered into a recession, unemployment rose and tax revenues collapsed.</p>
<p>At this juncture the government followed the advice by economists such as Richard Koo who argued – and <a href="http://www.ft.com/cms/s/0/d943faa8-8fc1-11e2-ae9e-00144feabdc0.html#axzz3ANgF6I4Q">still argue</a> – that fiscal stimulation is the panacea to end Japan’s slump. Thanks to the ensuing futile public spending, Japan’s debt/GDP ratio has reached record levels and, <a href="http://eprints.soton.ac.uk/340476/">as others warned</a>, was entirely without positive effect: such spending could not increase bank credit creation and hence merely crowded out private demand. As a result, fiscal stimulation could not have any positive effect on the economy. </p>
<p>This is precisely what happened: research has shown that for every yen in government expenditure, private demand fell by one yen. The reason is that with unchanged bank credit creation the income pie is unchanged, but increased government spending raises the government’s share of that pie – thus <a href="http://www.palgrave.com/page/detail/new-paradigm-in-macroeconomics-richard-werner/?K=9781403920737">shrinking private demand</a>. </p>
<p>Likewise, interest rate reductions could not possibly help, since the price of money was never the problem. Instead, what has been missing is credit creation for productive purposes, such as loans to small businesses. As <a href="http://www.neweconomics.org/publications/entry/where-does-money-come-from">97% of the money supply is actually bank credit</a> produced whenever banks extend what is called a “bank loan”, such lending is the only way to increase nominal GDP and create an economic recovery within the current system.</p>
<h2>Broken promises</h2>
<p>So while Abe’s initial plan to take on Japan’s central bank was a good one, he did not keep his election promise to change the Bank of Japan Law. It remains unchanged. Abe and his team have become side-tracked and their policy drive has been blunted, in the same way that the Bank of Japan has blunted any serious policy drive to create a recovery in the past 20 years.</p>
<p>It is time for Abe to remember his main election promise and change the Bank of Japan Law so that the central bank cannot continue to work against him behind his back. Simultaneously, he should remember the policies that made his grandfather such a successful manager of the Japanese economy: guidance of bank credit creation for productive purposes. Credit creation could be boosted most easily by stopping the issuance of government bonds and instead funding the public sector borrowing requirement entirely by entering into loan contracts from Japan’s banks. This also remains <a href="http://eprints.soton.ac.uk/339271/">a promising policy option for crisis-ridden Europe</a> to end Japan’s slump.</p><img src="https://counter.theconversation.com/content/30538/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Werner is affiliated with Local First CIC, a community interest organisation launching not-for-profit local banks in the UK; Providence Asset Management Ltd., an independent international fund manager, and Profit Research Center Ltd., a Tokyo-based consulting firm. He is also a member of the ECB Shadow Council.</span></em></p>In the second quarter of this year Japan recorded its largest GDP contraction since the earthquake and tsunami hit in 2011. This time, the single most important reason for the downturn is technical: demand…Richard Werner, Director, Centre for Banking, Finance and Sustainable Development, University of SouthamptonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/187502013-10-03T20:30:58Z2013-10-03T20:30:58ZJapan’s Abe unveils much needed tax rises, stimulus measures<figure><img src="https://images.theconversation.com/files/32321/original/9jptg2gh-1380696591.jpg?ixlib=rb-1.1.0&rect=0%2C177%2C4096%2C2587&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Shinzo Abe's decision to increase Japan's consumption tax from 5% to 8% next year is part of a plan to reassure investors the country's debt is under control.</span> <span class="attribution"><span class="source">EPA/Franck Robichon</span></span></figcaption></figure><p>Japan’s Prime Minister Shinzo Abe announced Tuesday a significant increase in the country’s consumption tax and unveiled a ¥5 trillion ($54.5 billion) stimulus package to mitigate the higher levy’s negative impacts, including a ¥10,000 cash allowance for low income earners and various tax cuts to encourage corporate investment</p>
<p>Abe said the tax rise – a jump from 5% to 8% next year – will be needed to ensure the social security system remains sustainable. But he promised the economy will not stray from its current track toward long-awaited recovery.</p>
<p>Abenomics – a set of policies Abe is championing in the hope of stimulating macroeconomic growth – is often described as having “three arrows”. </p>
<p>The first, beginning early 2013, has been a bold monetary policy aimed at dispelling the deflation mindset. The second “arrow” is a flexible fiscal policy aimed at igniting the economy through expansion of public investment. </p>
<p>Now the third arrow: a program to achieve growth through stimulating private investment.</p>
<p>Stimulus and tax hikes may sound contradictory to each other. But Abe believes the stimulus package will offset some of the immediate negative effects of the tax hike. </p>
<p>Japan’s national debt is huge. The country’s public debt-to-GDP ratio in 2012 is 214.3% (Australia’s ratio is 29.3% in the same year).</p>
<p><strong>Japan’s public debt as % of GDP</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/32344/original/j49kdwq9-1380755899.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/32344/original/j49kdwq9-1380755899.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/32344/original/j49kdwq9-1380755899.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=281&fit=crop&dpr=1 600w, https://images.theconversation.com/files/32344/original/j49kdwq9-1380755899.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=281&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/32344/original/j49kdwq9-1380755899.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=281&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/32344/original/j49kdwq9-1380755899.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=353&fit=crop&dpr=1 754w, https://images.theconversation.com/files/32344/original/j49kdwq9-1380755899.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=353&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/32344/original/j49kdwq9-1380755899.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=353&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Public debt in Japan has soared in recent years.</span>
<span class="attribution"><span class="source">OECD Economic Survey 2013</span></span>
</figcaption>
</figure>
<p>An <a href="http://www.imf.org/external/pubs/ft/survey/so/2013/CAR080513A.htm">IMF report released in August</a> concluded the consumption tax would have to be raised to at least 15% for that debt-to-GDP ratio to fall.</p>
<p>Implementing a consumption tax increase from 5% to 10% by 2015 is a necessary first step in this direction, the IMP report said, and in this sense, Abe’s planned tax rise goes some way to meeting that. </p>
<p>And while Japan’s unemployment rate is relatively low compared to other developed countries – 3.9% compared to Australia’s 5.5%, for instance – the proportion of people in work has been declining since 2000. ABS figures show the proportion of people working in Japan will fall from 64% in 2010 to 60.7% by 2015 (Australia’s will be 66.1%, slightly above world average).</p>
<p>Given this trend – and the declining tax base it represents – and the huge national-debt, these tax hikes are just an inevitable first step and substantial additional measures will be needed to increase government revenue.</p>
<h2>It’s not all bad news</h2>
<p>On Tuesday <a href="http://www.stat-search.boj.or.jp/ssi/cgi-bin/famecgi2?cgi=$graphwnd_en">the Bank of Japan’s “tankan” report</a> showed a sharp increase in business sentiment among manufacturers, especially large-sized enterprises. </p>
<p>Last month, the Cabinet Office released <a href="http://www.esri.cao.go.jp/jp/sna/data/data_list/sokuhou/gaiyou/pdf/main_1.pdf">the data</a> that shows an upward revision in April-June GDP to an annualized 3.8% growth from a preliminary 2.6% increase, not be a bad number considering the declining labor force.</p>
<p>Abe says Japan is facing a “make-or-break” moment. Failure means that the huge public debt could become a catastrophe. Broadening the personal income tax base to raise revenue and improving incentives to work – incentives for female labor participation, for example – are necessary measures to avert this.</p>
<p>To make personal consumption and corporate capital investment truly sustainable, the government needs to allocate the budget and policy resources efficiently to promote the expansion of private investment, and cultivate new markets. </p>
<p>And the yen’s appreciation, related to the first “arrow”, has brought up energy cost in Japan, which together with the increased consumption tax will hurt the business of small and medium-sized enterprises. </p>
<p>To stabilize the business of these enterprises, it will be necessary to take some measures for these small and middle-sized firms.</p>
<p>In September, Tokyo won the right to host the Olympic Games for the second time. The Tokyo Olympics 1964 was a symbol of economic growth in Japan. Some media reported that the Tokyo Olympics 2020 is Abe’s forth arrow. Japanese symbolism of “three arrows” indicates that one arrow can be easily broken but three arrows at once would not. </p>
<p>Abe needs more arrows and needs to implement them promptly. A ¥1000 trillion ($10.46 trillion) economy is too big to bail and Japan’s economy is too big to fail.</p><img src="https://counter.theconversation.com/content/18750/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shino Takayama has received funding from Australian Research Council.</span></em></p>Japan’s Prime Minister Shinzo Abe announced Tuesday a significant increase in the country’s consumption tax and unveiled a ¥5 trillion ($54.5 billion) stimulus package to mitigate the higher levy’s negative…Shino Takayama, Research Fellow in the Humanities and Social Sciences, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/152302013-06-17T05:50:14Z2013-06-17T05:50:14ZJapan’s PM has frog in throat as ecological crisis looms<figure><img src="https://images.theconversation.com/files/25626/original/4zkcpxts-1371383585.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The finer points of Abenomics are not lost on this guy.</span> <span class="attribution"><span class="source">ippei-janine</span></span></figcaption></figure><p>Japanese PM Shinzō Abe has a problem, and he might end up killing an awful lot of frogs to solve it. </p>
<p>Shares are up in Japan, but everything else has flatlined: kick-starting the stubbornly moribund economy clearly requires big structural changes. Abe has a plan to deliver them via his “three arrows” of economic policy, and in this once-conservative economy, almost nothing is off the table. Abe’s first two arrows (more quantitative easing and new stimulus spending) have been well received, and the third – a growth policy – was announced last week.</p>
<p>This third announcement was the big one – what levers would Abe pull to free up investment and reduce sovereign debt? In the end, according to many commentators, <a href="http://www.economist.com/news/asia/21579514-shinzo-abe-disappoints-timid-attempt-structural-reform-misfire">he bottled it</a>. Heavy on aspiration and light on detail, his speech knocked investor confidence yet again: the Nikkei has lost 22% of its value since its late-May high.</p>
<p>Abe is certainly not out for the count, but he has staggered and needs to keep up the momentum by showing that he really will deliver concrete, structural change. One very likely target, if <a href="http://www.ft.com/cms/s/0/6b1aa2ec-ced8-11e2-8e16-00144feab7de.html#axzz2W7nchAgP">some commentators</a> are to be believed, is Japan’s rural agriculture.</p>
<h2>Ecological hotspots</h2>
<p>Conservationists have recognised for many years that agricultural land isn’t a biodiversity desert. It forms a key part of the “matrix” – that vast majority of the landscape that exists outside nature reserves and in which many of the world’s species have to survive. Working out how to influence and <a href="http://www.pnas.org/content/106/2/349.full">manage the matrix</a> for biodiversity is one of conservation’s big challenges.</p>
<p>In Japan, rice paddies and their surrounding satoyama landscapes cover about 20% of the land surface - <a href="http://books.google.co.uk/books?id=P1JciKY_BTQC&pg=PA46&lpg=PA46&dq=Satoyama:+The+Traditional+Rural+Landscape+of+Japan&source=bl&ots=ITQn7G1Ui6&sig=YnWXinvGMhnQgFJHAzle0PF_JFk&hl=en&sa=X&ei=k7C5UdW9HYW6hAeLxIDADw&ved=0CIkBEOgBMAk#v=onepage&q&f=false">about all</a> that is suitable for cultivation. Agriculture has shaped these landscapes over a couple of millennia, and as human needs changed, so did the satoyama. Today the steep slopes have light woodlands, which until the 1970s were regularly foraged for food and medicine, and coppiced for fuel and building materials. In the valley bottoms, streams are maintained to irrigate the rice fields; these are interspersed with mown grass dikes (aze) and paths, arable and livestock fields, and settlements.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/25624/original/6rzymwgj-1371382452.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/25624/original/6rzymwgj-1371382452.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/25624/original/6rzymwgj-1371382452.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=840&fit=crop&dpr=1 600w, https://images.theconversation.com/files/25624/original/6rzymwgj-1371382452.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=840&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/25624/original/6rzymwgj-1371382452.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=840&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/25624/original/6rzymwgj-1371382452.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1056&fit=crop&dpr=1 754w, https://images.theconversation.com/files/25624/original/6rzymwgj-1371382452.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1056&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/25624/original/6rzymwgj-1371382452.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1056&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Mitsubishi’s next great investment?</span>
<span class="attribution"><span class="source">St Stev</span></span>
</figcaption>
</figure>
<p>Small scale clear-cutting makes for a forest of diverse ages. Mowing, coppicing, digging, and litter removal actually increase plant biodiversity. Paddy field margins, streams and drainage swamps all harbour distinct communities of plants and animals. And perhaps most importantly, satoyama is a very connected landscape – one that’s easy for animals and plants to disperse through. This all adds up to a network of more-or-less managed tiny habitats, and the <a href="http://intranet.catie.ac.cr/intranet/posgrado/Agricultura%20Ecol%C3%B3gica/AE-512/Lit%20reviews/Ruiz%20Eugenia%20Referencias/sdarticle7.pdf">diversity of species</a> that thrives within them is extraordinary. Hundreds of plant species, 39 species of dragonfly, and 17 species of frogs and salamanders – several unique to Japan and globally endangered – rely on satoyama. One half of all endangered species <a href="http://www.sciencedirect.com/science/article/pii/S0006320709001062">hotspots</a> in Japan are found there.</p>
<p>But it would be wrong to think of satoyama as an agrarian paradise for wildlife and people. Japan’s huge 20th century urbanisation consumed much of it, and changing demography took people away from what was left. Fewer people meant much less coppicing and forestry. Those who remained were older, and placed more reliance on heavy machinery, pesticides and herbicides. No one likes hand strimming an aze dike on their own when a herbicide spray is available, especially not if they’re in their seventies. These changes, plus the widespread concreting of <a href="http://www.sciencedirect.com/science/article/pii/S0169204606000089">irrigation canals</a>, have lead to a <a href="http://www.sciencedirect.com/science/article/pii/S0006320709001086">precipitous decline</a> in many <a href="http://www.biodic.go.jp/english/rdb/rdb_f.html">satoyama species</a>.</p>
<h2>Agricultural protection</h2>
<p>Agriculture is now less than 1% of Japan’s GDP, and employs less than 3% of the population. The <a href="http://www.oecd-ilibrary.org/reforming-agriculture-and-promoting-japan-s-integration-in-the-world-economy_5k46957l0rf4.pdf?contentType=/ns/WorkingPaper&itemId=/content/workingpaper/5k46957l0rf4-en&containerItemId=/content/workingpaperseries/18151973&accessItemIds=&mimeType=application/pdf">OECD</a> notes that the average rice farm is about the size of a rugby pitch and is farmed, part time, by a couple over the age of 70 who have an eye on selling the land for development if they can. Heavy import controls keep Japanese food on Japanese tables, but it’s expensive. Only 8.5% of the national rice stock can be imported, with anything above this level taxed at an <a href="http://www.oecd.org/eco/surveys/Overview%20Japan%202013%20English.pdf">eye-watering 780%</a>.</p>
<p>If you’re a bank or industrial conglomerate in Japan, you can’t buy a farm. Agricultural land ownership is limited by law to individuals who commit to farm 150 days a year, and to agricultural firms and collectives who are not permitted to do anything else. This, plus the tariff protection from global prices, means farm household incomes are actually higher than non-farming households – an extraordinary state of affairs that is <a href="http://www.oecd.org/agriculture/agricultural-policies/producerandconsumersupportestimatesdatabase.htm">supported by state subsidies</a> to the tune of 50% of market worth - even the EU manages to keep this down to around 20%.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/25623/original/n37j2vqd-1371382260.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/25623/original/n37j2vqd-1371382260.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/25623/original/n37j2vqd-1371382260.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=427&fit=crop&dpr=1 600w, https://images.theconversation.com/files/25623/original/n37j2vqd-1371382260.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=427&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/25623/original/n37j2vqd-1371382260.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=427&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/25623/original/n37j2vqd-1371382260.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=536&fit=crop&dpr=1 754w, https://images.theconversation.com/files/25623/original/n37j2vqd-1371382260.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=536&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/25623/original/n37j2vqd-1371382260.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=536&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The average Japanese farmer is over 70.</span>
<span class="attribution"><span class="source">TruShu</span></span>
</figcaption>
</figure>
<p>Earlier this year, Abe began negotiating Japan’s membership of the Trans-Pacific Partnership, a <a href="http://www.ft.com/cms/s/0/08cf74f6-c216-11e2-8992-00144feab7de.html">controversial free trade agreement</a>. Any deal on offer looks likely to swap Japan’s agricultural protection tariffs for better access to the wider Pacific markets for Japan’s manufacturing sector. It’s a tough political choice. The lone farmer and his flooded fields figure strongly in the national psyche, and his future wellbeing is backed by the geography of Japanese party politics and a strong farming lobby.</p>
<p>But if Abe decides to show he’s not, in Texan parlance, all hat and no cattle, then there’s only one barrier he needs to break – the legal right of large businesses to own agricultural land. Without the 1952 Agricultural Land Act, major agribusiness and the great diversified trading houses, could buy out the aging farmers, demolish most of the aze, consolidate the small farms, and compete on price around the Pacific Rim. What’s more, he can do this by a single decree.</p>
<p>It’s an extraordinary situation. Japan’s agricultural policy since 1952 has produced such a head of pressure that a single statement might radically alter a fifth of Japan’s terrestrial surface within years. And the alignment of Pacific Rim trade conditions with domestic political pressure make the issuing of that decree much more likely. </p>
<p>Salamanders and pool frogs don’t usually figure highly in the political scheme of things. With such a need to keep the momentum behind what has been dubbed Abenomics, left to themselves they don’t stand a chance.</p>
<h2>Big fish, little fish</h2>
<p>So what can conservationists do? The answer probably lies in the corporate sustainability offices of Mitsui, Sumimoto, Mitsubishi and the other major trading houses. Close engagement, lobbying, and constant delivery of the <a href="http://www.iucn.org/about/work/programmes/business/bbp_aboutus/bbp_case/">business case for biodiversity</a> might pay handsome dividends. </p>
<p>Targeted chemical application, tailored field margins, connectivity planning: there’s a lot of <a href="http://www.esajournals.org/doi/full/10.1890/1540-9295-10.9.455">best practice</a> out there already, and it should be possible to minimize the harm that wide-scale industrialisation might bring. Remembering the conservation negatives of small-scale farming – the rampant herbicide use, the abandoned forests, the sterile concrete streams – might be good too. If the demand for agricultural land isn’t immediately all-consuming, there might be opportunity for what <a href="http://www.sciencedirect.com/science/article/pii/S0006320709001062">some ecologists</a> have called “activation” of the satoyama – Kibbutz-like volunteer farms to allow young urbanites to reconnect with their agricultural heritage, or low-impact local business that buy the products of well-managed satoyama landscapes such as compost, biofuel stock or artisanal foodstuffs.</p>
<p>As conservationists we swim in waters among bigger fish than ourselves, and we can change their course less than we would like. In this case, accepting change and acting early to shape intensive agriculture may yet leave a little room for those frogs. But European conservationists should watch Japan closely: any radical revision of the <a href="http://www.civitas.org.uk/eufacts/FSPOL/AG3.htm">Common Agricultural Policy</a> could produce similar problems, and on a similar scale.</p><img src="https://counter.theconversation.com/content/15230/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rich Grenyer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Japanese PM Shinzō Abe has a problem, and he might end up killing an awful lot of frogs to solve it. Shares are up in Japan, but everything else has flatlined: kick-starting the stubbornly moribund economy…Rich Grenyer, University Lecturer in Biogeography and Biodiversity; Academic Director of Oxford's MSc in Biodiversity, Conservation and Management, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/144472013-05-21T13:50:45Z2013-05-21T13:50:45ZDespite ‘Abenomic’ growth, Japan still needs reform<figure><img src="https://images.theconversation.com/files/24210/original/3s8zh5zw-1369142239.jpg?ixlib=rb-1.1.0&rect=465%2C277%2C1161%2C866&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Japanese women: needed in the workforce</span> <span class="attribution"><span class="source">Byron Villegas</span></span></figcaption></figure><p>Amid the doom and gloom of recent world economic reports, Japan has provided a rare source of good news. In the first quarter of the year, its economy grew by 0.9%, indicating an <a href="http://www.bbc.co.uk/news/business-22549772">annual growth rate of 3.5%</a>. This is considerably higher than most comparable nations; the US is growing, but at a lower rate, and much of Europe is still in recession. </p>
<p>Japanese growth is particularly welcome as the country’s economy has stagnated for much of the past two decades. Confidence is in short supply, and investment and consumption are lacking. Even zero interest rates have failed to encourage spending. The high value of the yen has resulted in a negative trade balance; Japanese products have simply been too expensive to export.</p>
<p>So what is Japan doing right? And how much credit can Prime Minister Shinzō Abe and his “Abenomics” programme take for the recovery?</p>
<h2>Three-pronged Abenomics</h2>
<p>Since taking office in late December, Abe has pursued a three-pronged economic strategy: an expansive monetary policy with the central bank injecting more money into the economy (quantitative easing); an expansive fiscal policy with higher levels of government borrowing and expenditure; and a programme to achieve structural change and higher productivity, particularly through encouraging a larger and more flexible workforce. </p>
<p>The initial signs are seen as encouraging. Over recent months the value of the <a href="http://www.bbc.co.uk/news/business-22279105">yen has fallen</a> by around 30% against the US dollar, making exports cheaper, while share values have risen significantly. Growth has been driven mainly by cheaper exports, followed by residential investment and consumer spending. </p>
<p>But the target of a return within two years to 2% inflation is likely to prove tough. There is as yet little sign of a return to inflation, and the longer term effects of the monetary and fiscal stimulus remain unclear.</p>
<h2>Differing views</h2>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/24208/original/nhjd8sch-1369141346.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/24208/original/nhjd8sch-1369141346.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/24208/original/nhjd8sch-1369141346.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/24208/original/nhjd8sch-1369141346.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/24208/original/nhjd8sch-1369141346.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1006&fit=crop&dpr=1 754w, https://images.theconversation.com/files/24208/original/nhjd8sch-1369141346.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1006&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/24208/original/nhjd8sch-1369141346.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1006&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Shinzō Abe, delighted to hear of 3.5% growth.</span>
<span class="attribution"><span class="source">TTTNIS</span></span>
</figcaption>
</figure>
<p>The pros and cons of “Abenomics” have been vigorously debated. Some commentators have condemned the strategy as fundamentally flawed. For one US commentator it is <a href="http://www.businessinsider.com/kyle-bass-you-have-to-be-sh-ing-me-2013-5">one Ponzi scheme on top of another</a>. Others are concerned about the <a href="http://www.businessweek.com/articles/2013-01-02/japans-central-bank-is-pressed-to-boost-money-supply">apparent erosion</a> of central bank autonomy. </p>
<p>As cash is pumped into the economy firms have invested in speculative activities, driving a rise in share values. Investment banks and brokers have benefited, but core business investment has remained very sluggish, with would-be borrowers reluctant to take on debt. </p>
<p>A cheap yen may have stimulated exports, but it has also increased the <a href="http://online.wsj.com/article/SB10001424127887323741004578417842891174664.html">cost of imported energy</a>, already ballooning following the Fukushima nuclear disaster. The past tendency of government spending to be diverted by political agendas – usually those of Abe’s own Liberal Democratic Party - into unproductive infrastructure projects increases scepticism about its potential for stimulus.</p>
<h2>Don’t forget the third prong</h2>
<p>Even the optimists, though, agree that the expansionary monetary and fiscal policies will only deliver the desired outcomes if the third element, structural reform, can be promptly implemented. Reform is vital for sustained economic growth, and without it the government’s debt burden could become totally unsustainable. </p>
<p>Japan already has one of the world’s highest debt to GDP ratios. The combination of even higher debt - increasingly held overseas - and stagnant revenue is potentially disastrous. But delivering on structural reform and greater efficiency through labour market change will be tough.</p>
<h2>It’s the demography, stupid</h2>
<p>Demographic change remains at the heart of all workforce issues. Japan has the world’s <a href="http://www.economist.com/blogs/dailychart/2010/11/japans_population">fastest ageing population</a>, and estimates suggest that by the middle of the century nearly 40% of the population will be of retirement age. In that time Japan’s population will have <a href="http://www.upi.com/Top_News/World-News/2013/03/28/Japans-population-decline-highlighted/UPI-11001364445270/">fallen to around 100 million</a>, compared with over 120 million today. </p>
<p>Immigration presents one possible solution, but it is still a fraught issue in Japan. While there are a significant number of workers from other parts of Asia – temporary and permanent, legal and illegal – any kind of open door policy remains politically difficult, particularly in the absence of growth and improved employment prospects for Japanese nationals. </p>
<p>Making better use of highly qualified women seems an obvious solution to worker shortages associated with the changing demographic profile. However, this is in conflict with the traditional <a href="http://www.economist.com/blogs/banyan/2011/08/japans-sexist-labour-market">Japanese pressures on women</a> to care for the elderly within the family, to have more children and reverse the decline in the birthrate, the persistent unequal career prospects for women, and their reluctance to put up with the work demands conventionally accepted by many of Japan’s male workers. </p>
<p>Above all, increasing women’s workforce participation requires modifying deeply held Japanese cultural traditions. This may be almost impossible to achieve in the shorter timescales required by Abe’s economic strategy.</p>
<h2>Too early to judge success</h2>
<p>Abe was not elected because the Japanese were confident that he could bring them out of stagnation - confidence in politicians remains at an all time low - but rather because he at least seemed to have a concrete strategy that offered a better chance of success than those of his opponents. To what extent the positive signs in Japan’s economy are the outcome of Abenomics rather than a lucky set of circumstances is difficult to judge at this point. </p>
<p>Earlier Japanese history perhaps gives cause for optimism. Expansionary government expenditure, low interest rates and currency depreciation helped <a href="http://www.japaninvestor.net/2010/08/how-japan-recovered-from-great.html">Japan’s rapid emergence</a> from the Great Depression. </p>
<p>We must take the positives from recent events. Japan still has its problems, but it remains the world’s third largest economy and its prosperity matters for us all.</p><img src="https://counter.theconversation.com/content/14447/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>I do not have any interests to disclose that might relate to this article.</span></em></p>Amid the doom and gloom of recent world economic reports, Japan has provided a rare source of good news. In the first quarter of the year, its economy grew by 0.9%, indicating an annual growth rate of…Janet Hunter, Saji Professor of Economic History, London School of Economics and Political ScienceLicensed as Creative Commons – attribution, no derivatives.