Commentary / Japan

Japan faces a consequential decision in possible snap election

Voters confronted by a stark choice with ramifications for the nation and the region

by Stephen R. Nagy

The possible snap elections this October will be a referendum on the Abe administration’s five-year track record in power that has been marked by economic growth, growing security ties and political stability. Stable leadership has brought deregulation, improved corporate governance standards and a host of other policies. Achievements include increased employment, capital investment and increased corporate profits.

At the same time, a series of scandals and gaffs involving members of Prime Minister Shinzo Abe’s Cabinet and even himself has shaken his support among his conservative base. This drop resulted in a Cabinet reshuffle in early August, which allowed him to regain some of his support.

While Abe’s second stint as prime minister has not been without problems, missteps and questionable relationships, the characterization by some commentators as a “long list of broken promises and unrealized goals” and a failure is grossly inaccurate.

It is in this environment that voters are now faced with a dilemma of whether to continue to support a leader that has brought political stability, increased security and economic prosperity in the possible snap election or do they shift their support for an opposition in disarray. Citizens and investors should be concerned as well, because a change in government in Japan could lead to a return to the revolving door of prime ministers and policy inconsistency that plagued Japan for much of the past 20 years.

Right-wing associations

Abe’s refusal to distance himself from right-wing organizations such as Nippon Kaigi (the Japan Conference) has tarred him with a far right-wing reputation, despite his track record as a pragmatic leader who governs more from the center than we would have expected by examining his political career before becoming prime minister.

These groups are problematic for Abe as they argue that in order to reinvigorate Japan, the Constitution needs to be revised to include some of the following principles: 1) To nurture patriotism and position the Imperial family at the center of Japan’s identity; 2) To create a new constitution based on Japan’s traditional characteristics; and 3) To safeguard the sovereignty and honor of Japan.

While these proposals are supported by some political elites with roots in Japan’s Imperial past, they do not represent mainstream Japanese citizens nor post-bubble era Japanese with no ties to Japan imperial past.

Concurrently, Abe has pushed the controversial security legislation that the public has misgivings about due to deeply held postwar pacifist norms and a lack of security literacy among quotidian Japanese.

To gain back some of his credibility among voters, Abe pushed out some of the more extreme elements of his Cabinet during the recent reshuffle, suggesting a more centrist approach to governance and the avoidance of ideology-based politics that could upset trade relations with both China and South Korea, important markets for Japan’s export dependent economy.

The jury is still out though on whether these changes will be enough to allay the concerns of voters or prevent a political insurgence from within the LDP to push Abe out. What is clear though is that questionable right-wing associations and controversial policies are leading voters to explore other political alternatives that may lead to further political, economic and foreign policy insecurity.

Lukewarm reform efforts

Critics of Abe have argued that Abenomics has only half succeeded mostly because of a lukewarm commitment to essential structural reform. Whereas large exporters benefit from the yen’s devaluation, domestically oriented small and mid-size businesses as well as families are said not to receive the benefits of Abenomics, only the higher prices on imports. Others have argued that Abenomics has been hobbled by “Japan’s consensus-based society, not favoring top-down decision-making” stressing that “it takes time to change long-standing policies, in particular those relating to labor markets.”

In contrast, the International Monetary Fund’s Country Report on Japan, released in July, outlined a series of nuanced assessments on the successes and shortcomings of Abenomics. The IMF stressed that “structural impediments underlie Japan’s struggle with stagnant growth and deflation” and that “Abenomics has improved economic conditions and engendered structural reform, but key policy targets remain out of reach under current policies.” The report underscored that policymakers should be more committed to labor market reform, increasing the number of foreign workers and the adoption of horizontal labor mobility policies in order for Abenomics to garner more momentum. In short, greater commitment by political leaders in pushing through structural reforms is needed.

Security, economic deeds

Abe’s star has shined most brightly in the areas of security and economic policy, a welcome relief to voters and investors. Sustained strategic commitment to expanding the number and quality of security partnerships in Southeast Asia, South Asia as well as with extra-regional powers such as Australia, the United Kingdom and France are noteworthy achievements in that they strengthen Japan’s security while abiding by Article 9 of the war-renouncing Constitution.

Focusing on capacity building, multi-layered and multidimensional security cooperation with ASEAN and other countries, Japan has taken an important role in alleviating some of its own and its neighbors’ security concerns. This has been welcomed not only by Southeast Asian and South Asian countries but also by Japanese voters who have growing concerns about North Korea’s belligerence and Chinese behavior in the East China Sea and South China Sea. This has become even more pronounced in light of the missile and nuclear tests by Pyongyang this summer and China’s island-building activities in the South China Sea.

While security achievements have infused a sense of stable stewardship into Japan’s foreign policy, in the economic realm yen devaluation has increased the competitiveness of Japanese exports in and outside the region. These policies alongside the relaxation of visa requirements for Southeast Asian countries and China have boosted the number of tourists from the region into Japan. Tourism- related industries such as hotels, restaurants, ski and hot spring resorts, temples and some rural areas have been transformed from a domestically oriented tourist business model to one that actively seeks out and accommodates foreign tourists.

Government policies to promote corporate governance and economic leadership in terms of reaching a broad accord on a Japan-EU Economic Partnership Agreement in July and Abe’s commitment to realizing the Trans-Pacific Partnership 11 are important markers that the current leadership in Tokyo is committed to bolstering trade, deregulation and creating new trade rules that project intellectual property rights.

Japan’s choice

Pragmatism, not ideology, has driven Japan’s security and economic achievements since 2012. Much more needs to be done to ensure that rural areas benefit from policies associated with Abenomics that are positively impacting Japan’s urban areas such as Tokyo, Osaka and Kyoto. To date, reforms initiated under Abe haven’t much effect on the rural areas that are plagued by a rapidly graying population and an exodus of youths.

Voters in the potential snap election face a stark choice that will have ramifications for their fellow citizens, investors and the region. They should rationally assess both the successes and shortcomings of the LDP under Abe and what they mean for Japan’s future. Continued and deepening commitment to structural reform, “womenomics” and migration reform will reinvigorate Japan and provide it with a leadership role in the region. It would be a beacon for developing countries by demonstrating that in East Asia open and democratic societies can prosper.

Stephen R. Nagy is a senior associate professor in the Department of Politics and International Studies at International Christian University in Tokyo. An earlier version of this article was published in the World Commerce Review on Sept. 11.