The news cycle has clearly shifted to covering Prime Minister Yoshihide Suga’s administration, but it is still prudent to take a bird’s-eye view on where Japan stands in the course of history following Shinzo Abe’s record tenure of nearly eight years — the longest serving-administration since the Cabinet system was established under the Meiji Constitution.

Starting with diplomacy, Japan has a long-standing security alliance with the United States. The U.S. maintains troops in Japan, including Okinawa, where the number of active-duty military personnel, mainly in the Air Force and Navy, easily exceed 20,000.

On the other hand, China is the nation’s top trading partner — both in terms of exports and imports.

Given these two simple facts, the only way forward for Japan’s survival is to maintain its alliance with the United States and deepen its economic ties with China while building mutually beneficial relationships with both — at least for the time being.

In that sense, Prime Minister Abe’s foreign policy merited a passing grade. In regard to the United States, it is often talked about him having a close relationship with President Donald Trump, but former U.S. President Barrack Obama’s visit to Hiroshima and Abe’s visit to Pearl Harbor carry more historical weight.

“No more Hiroshima” and “Remember Pearl Harbor” are utterances that symbolize the unfortunate World War II experience of both countries. But the two leaders’ respective visits, with the stop at Pearl Harbor being a first for a sitting prime minister to accompany a U.S. president there, attest to the historical reconciliation achieved between the two countries.

In terms of Japan-China relations, although President Xi Jinping’s visit was postponed due to the COVID-19 pandemic, the Chinese leader was scheduled to visit Tokyo as a state guest. That mere fact is confirmation that relations are on an even keel with China.

Among Abe’s diplomatic achievements, the establishment of the Trans-Pacific Partnership agreement is a feat with great geopolitical significance.

For natural-resource-deprived Japan, protecting the free trade system is a matter of life and death. And despite the Trump administration withdrawing from the TPP, Abe, to his credit, managed to realize a new trade agreement without the United States. Abe’s diplomatic push was arguably one of the first instances where Japan pursued a policy that ran counter to the actions of an incumbent U.S. president.

Considering the aforementioned results, diplomacy should be given greater consideration. It is without question that relations with neighboring South Korea and North Korea have chilled in recent years and his personal meetings with Russian President Vladimir Putin have yielded few results. And though the nation’s efforts have faltered at times, it should be noted that the weight of the issues faced by Japan and its national interests are completely different from those of the United States and China.

As the conflict between the two superpowers intensifies, the argument that Tokyo should step up pressure against Beijing is also gaining currency.

The situation reminds me of a conundrum once faced by Otto von Bismarck, the Prussian statesman who was instrumental in the unification of Germany.

At that time, the Austro-Hungarian Empire (under the Habsburg Monarchy) and Russia were in a fierce struggle for supremacy over the Balkan Peninsula.

However, Bismarck unscrupulously formed ties with both Austria and Russia and negotiated the League of Three Emperors agreement.

The young Kaiser Wilhelm II didn’t comprehend Bismarck’s vision. The Kaiser dismissed the senior statesman and refused to renew his nation’s treaty with Russia, believing that Germany couldn’t have it both ways and maintain an alliance with Austria. That kind of simplistic thinking eventually led to the catastrophe that was World War I. We need to learn more from history.

In domestic affairs, looking at changes in GDP per capita and purchasing power parity, Japan has fallen behind the United States and Germany in absolute terms, including growth rate.

Japan has dropped to 33rd in the world, sixth in Asia, and the lowest among the Group of Seven nations.

How should this be interpreted? In the end, politics, especially domestic affairs, is about how best to enrich and improve the lives of a nation’s citizens. So if you look at these figures, Japan has become a poor country among developed countries in relative terms. So as it pertains to the economy, it is hard to give Abe a passing grade.

It is often pointed out that Japan is the second largest economy in the G7 after the United States. But that’s simply because Japan has a large population. The citizens are still less well off.

What is the main cause of the economic sluggishness?

In Japan, there are two schools of thought.

One is that deflation is the root of all evil, which has led to a so-called reflationary policy in which the central bank tries to increase the monetary supply to boost economic activity until the inflation rate reaches 2 percent. And yet, despite years of quantitative easing, prices have not moved, so the policy has shapeshifted to mobilize public spending until the inflation rate reaches 2 percent.

The other is that the economic downturn undermined the creation of new industries and businesses similar to Google, Apple, Facebook and Amazon — as well as unicorn startups with potential. Looking at where Japan’s tech industry is, deflation is not the cause, but the result.

I subscribe to the latter idea, but in any case, how to control the COVID-19 epidemic and revitalize the economy will be one of the biggest challenges for the new administration.

In addition, Japan’s biggest medium- to long-term issue is the declining birthrate, as Emmanuel Todd, the famed French historian, demographer, anthropologist, sociologist, and political scientist at the National Institute of Demographic Studies in Paris, points out.

The nation’s fertility rate has fallen for the third consecutive year, so even in this regard, Abe’s domestic policy has fallen short of a passing grade. It goes without saying that the root cause of the declining birthrate is gender discrimination, which was highlighted by the World Economic Forum’s gender gap index. Japan came in at 121 out of 153 countries.

Eliminating gender discrimination and turning the declining birthrate around will also be major hurdles for the new Cabinet to overcome.

Haruaki Deguchi is the president of Ritsumeikan Asia Pacific University in Beppu, Oita Prefecture. A lecturer and author of more than 40 books, he founded Lifenet Insurance in 2008 after a career spanning nearly 35 years at Nippon Life Insurance Co.

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