A win would clear the way for Abenomics

With a clear victory in sight this weekend, Shinzo Abe will have no excuse not to push ahead with reforms.

Wall Street Journal

Japanese Prime Minister Shinzo Abe’s gamble to call early elections may pay off in spades. While few observers expected his ruling party to lose its majority, it now appears that Abe may actually gain seats. That could prove to be as much a curse as a blessing: after this election, there can be no more excuses for him to hold back on reform. The question is whether Abe is as committed as he says he is.

The ruling Liberal Democratic Party currently holds a commanding 295-seat majority in Japan’s lower house. Yet it is possible that on Sunday the party may increase its share to more than 300 of the chamber’s 475 seats, easily keeping its supermajority with coalition partner Komeito. The most optimistic estimates suggest the LDP could even achieve a 317-seat supermajority of its own.

These projections are surprising given that the government’s economic policy seems to be failing. Abe has spent his two years in office promising more radical action than any Japanese leader in recent memory. But while his monetary expansion and fiscal stimulus made waves early on, Abe steadily watered down many of his more far-reaching proposals, such as labour-market reform, corporate-tax reform and real reform in sectors like agriculture and pharmaceuticals.

Meanwhile, the one promise Abe made good on -- increasing the sales tax earlier this year -- has been blamed for sending Japan back into recession and forced the prime minister to walk back from implementing a second planned sales-tax hike. In addition, negotiations on the Trans-Pacific Partnership appear to have stalled, despite assurances from both Tokyo and Washington that an agreement is close. The media line is that Abenomics may be finished before it really got started.

With a clear victory this weekend, Abe would inherit a new political world. Not only will he have four more years to carry out his plans, but he will likely find himself in the strongest position of any Japanese leader in recent memory. That means there will be no excuse for him not to push ahead on reform without restrictions, self-imposed or otherwise. We could then judge Abe solely on his own merits: by the clarity of his post-election case for reform, by the energy he commits to pushing through the necessary legislation and by the sophistication of his approach to win over skeptics.

In the past two years, Abe has chosen to focus on smaller goals while deferring the hard choices to the future. With a strong win on Sunday, he should change tack and boldly grapple with the major issues facing Japan, including an obstructionist agricultural sector and a bureaucracy reluctant to give up its regulatory role. Regardless of the size of his victory, Abe should claim a mandate and bulldoze through with his plans.

But this presumes that Abe truly wants to reform Japan. More than a few voices believe he has adopted the language of reform only to ensure enough parliamentary strength to carry out his foreign and defense policies. These policies, they say, are what really capture his heart, including increasing the size of the military, dropping the ban on collective self-defense and forging new security partnerships throughout Asia.

These are laudable goals. But Mr. Abe’s primary focus must remain on Japan’s economy. Even if foreign policy is his main interest, none of his goals will be achievable if Japan remains mired in a recession that reduces the amount of money available for self-defense forces or that solidifies the impression that Japan’s best days are behind it.

Instead, what will gain attention abroad and stir Japanese at home is a recommitment to the goals that swept Abe into power in 2012. If the voters hand him another electoral victory, he should reward their faith by moving as aggressively as possible down the path he has already laid out. If he fails to do so, he has no one to blame but himself.

Michael Auslin is a resident scholar at the American Enterprise Institute in Washington and a columnist for WSJ.com.

This article first appeared in the Wall Street Journal. Reproduced with permission. 

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