For Prime Minister Shinzo Abe, whose government has entered its seventh year, 2019 will be a crucial year in his attempts to create a political legacy for his long-running administration — with the triennial Upper House election this summer serving as a key test. The extended boom cycle of the economy, now believed to have continued for a record-tying 73 months under Abe’s watch, will also be tested by the consumption tax hike in October and the growing uncertainty over the global economy, as illustrated by recent stock market volatility.

On the strength of his record of leading the Liberal Democratic Party-Komeito coalition to landslide victories in all five Diet elections since 2012, Abe was elected last September to his third three-year term as LDP president through 2021, putting him on a path to becoming the nation’s longest-serving prime minister. Now the question is on what issues does Abe intend to expend his resources and his remaining time in office to try to create a legacy for his administration.

A longtime advocate of revising the postwar Constitution, which hasn’t been altered since it was introduced in 1947, Abe has set a goal of amending the nation’s highest law by 2020 and the LDP has come up with a draft amendment, including a revision to the war-renouncing Article 9 to clarify the legal status of the Self-Defense Forces. An amendment needs to be proposed by a two-thirds majority in both chambers of the Diet — which the LDP-Komeito alliance currently has (with the help of pro-amendment forces in the Upper House) — for approval in a national referendum.

Abe might want to put an amendment on the Diet agenda before the Upper House election, when the coalition’s hold on the two-thirds majority will be contested. However, it is deemed difficult for the administration to handle such a politically divisive issue amid the tight political schedule before the Upper House race, including a nationwide series of local elections in April followed by the abdication of Emperor Akihito and enthronement of the new emperor. To keep the amendment bid alive, it will be crucial for the ruling coalition and its allies to retain their two-thirds majority in the Upper House. But even if Abe clears that hurdle, a gap remains on the issue between the LDP and Komeito, which is more hesitant toward revising Article 9 — a subject that could alienate its supporters.

This year will also again test the Abe administration’s bid to revive the economy by busting deflation — which has had mixed success over the past six years. The current boom cycle of the economy — which began just as Abe returned to the government’s helm in 2012 — is deemed likely to become the longest postwar period of expansion this month. However, the average annual growth of the economy during the boom cycle has been just 1.2 percent. While corporate profits have surged to record levels, aided by the yen’s depreciation under the Bank of Japan’s massive monetary stimulus and brisk overseas demand, wage raises have been disappointing — as illustrated by the fall in labor’s share of corporate earnings to a 43-year low — and growth in consumer spending has remained uneven and weak.

In October, the consumption tax will be hiked to 10 percent — a move that’s been twice postponed since the hike to 8 percent in 2014 caused a steep decline in consumer spending and pushed the economy downward. That the government has prepared a spending package of more than ¥2 trillion to offset the impact of the tax hike testifies to the fragility of consumer demand.

The surge in share prices on the Tokyo stock market — where the Nikkei average has more than doubled since Abe took the helm — has often been deemed to symbolize the bright side of Abenomics. But amid the increased volatility in stock markets worldwide, accelerated by growing uncertainty over the world economy and concerns over the risk of economic downturns in the United States and China, the Nikkei average ended the 2018 trading 12 percent lower than a year ago — the first year-on-year fall under Abe’s watch. Should market concerns over the global economy come true, Japan’s economy would certainly be impacted.

The past year saw the enactment of “work-style” labor reform legislation, as well as an amendment to the immigration control law to open the door wider to foreign workers as a means to address an increasingly serious domestic manpower shortage. But efforts to address the rapidly aging and declining population that’s at the root of the manpower shortage — which Abe once called a “national crisis” — remain slow. Structural reforms to generate new avenues of growth — billed as the “third arrow” of Abenomics along with monetary easing and aggressive fiscal spending — have yet to show much tangible results in boosting the economy. This is also an area where Abe should strive more as leader of a long-running administration.

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