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As Prime Minister Shinzo Abe nears the end of his second term, the prospect of him serving a historic third term is getting close to reality. Consistent strategy and steady execution of economic policies are possible only under stable government — a bitter lesson Japan learned when the country experienced six prime ministers in six years until Abe returned to power in 2012. Given the hardships Japan’s leadership underwent back then, one would hope that the current government is not taking the political stability for granted. Slow progress on structural reforms, however, begs the question: Is too much time and money on Abe’s hands hurting Japan now?

Let us step back and revisit the much-hyped “three arrows” of Abenomics. We have seen some degree of success with the first and second arrows, namely, bold monetary easing and fiscal stimulus. In contrast, the third arrow, structural reforms, has so far missed the bulls’-eye by a big margin. Structural reform is undoubtedly the most critical component of Abenomics.

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