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Japan: 'Abenomics' Has NOT Resigned

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Japan: 'Abenomics' Has NOT Resigned September 2, 2020 Japan: ‘Abenomics’ has NOT resigned Prime Minister Abe’s successor is likely to focus on continuity The LDP will elect a new leader in two weeks who will succeed Shinzo Abe as Japan’s prime minister. Continuity is expected in terms of fiscal and monetary policy, but it will not be easy to handle the pandemic, prepare for the Olympics, engage on the global stage, and enact further regulatory reform all while striving to win the hearts and respect of a nation. Even so, candidates willing to face the challenge are already lining up Source: Håkan Hedström, NHK 2020 ceremonies. Instead, he was making headlines with the government’s handling of the I cannot be prime minister if I cannot make last Friday by resigning from his post as prime COVID-19 crisis. Indeed, the Cabinet’s the best decisions for the people. I have minister due to health reasons, only days after approval rating fell to a record low of 34% in decided to step down from my post ... before having become Japan’s longest serving prime a poll conducted by Japan’s major public TV accomplishing my goals. minister. Prior to the start of his second term broadcaster NHK (Nippon Hoso Kyokai). 69% in 2012, Abe served as prime minister from of those polled opposed Abe serving as PM Shinzo Abe 2006 to 2007 before having to step down, Liberal Democratic Party (LDP) leader for a also due to health reasons. fourth term. It is also interesting to note that Had the COVID-19 pandemic not erupted despite falling support for the Cabinet, the Abe’s public support had faltered recently Prime Minister Abe would have been in the overall support rate for the LDP remains far following a vote-buying scandal involving a global spotlight last month during the above that of opposition parties. The former Cabinet member and dissatisfaction Olympic and Paralympic opening and closing opposition camp remains highly fragmented, and even though the Constitutional Democratic Party (CDP) and the Democratic Cabinet approval had been waning proir to PM Abe's resignation Party for the People (DPFP) will merge, both together have a support rate of less than 5% 70% in the latest polls. Approve Disapprove 60% Candidates are already lining up 50% A few high-ranking Liberal Democratic Party members have already announced their 40% intention to stand as new LDP leader candidates and, if selected, prime minister 30% until the term ends in autumn next year. 20% Candidates currently include the former NHK Cabinet Approval Rating under PM Abe Foreign Minister and faction leader Fumio 10% (January 2013 - August 2020) Kishida and the former Defence Minister and No data for Oct. 2019 due to typhoon faction leader Shigeru Ishiba, who has been a 0% prior contender for the position of LDP 2013 2014 2015 2016 2017 2018 2019 2020 President. It is Chief Cabinet Secretary Yoshihide Suga, however, who currently seems to be the main contender, enjoying PM Source: NHK Abe’s support as well as that of three of the [email protected] Progress was intended to be achieved by Politicians preferred as next Prime Minister (in %, June 2020 increasing female employment in the poll)en workforce, bolstering productivity through ISHIBA, Shigeru robotics, drones, artificial intelligence, FinTech, Big Data and automated driving, as well as ABE, Shinzo fostering new developments in fields like YOSHIMURA, Hirofumi environmental research, medicine, tourism KOIZUMI, Shinjiro and housing. All these measures were KOIKE, Yuriko designed to increase capital expenditure and KONO, Taro to lift productivity. By 2025, the birth rate was EDANO, Yukio expected to rise, helped by such endeavours as improving childcare facilities. Finally, the SUGA, Yoshihide nursing care infrastructure was to be SHII, Kazuo improved by 2020 in order to prevent workers KISHIDA, Fumio from having to leave their jobs to take care of NODA, Seiko ailing elderly family members. NISHIMURA, Yasutoshi While Abe’s aggressive monetary policy easing - 5 10 15 20 25 deserves a high rating in terms of achievement, fiscal consolidation has been Source: www.go2senkyo.com; Note: The salmon colour refers to candidates who are eligible to become LDP President moving into focus again since autumn last year, when the consumption tax rate major LDP factions. Meanwhile, Deputy Prime his cabinet members, the prime minister and increased from 8% to 10%. More time is Minister and faction leader Taro Aso, his new government will take office. New needed to tackle structural reform, however, Economic Revitalisation Minister Yasutoshi snap elections for the Lower House cannot be and as such Abe will only receive partial credit Nishimura as well as Defence Minister Taro ruled out for later this year as long as for any success. Kono, who were previously considered to be opposition parties lag in public polls. The top candidates, have announced that they will latest NHK poll shows that all opposition Foreign tourism and ‘womenomics’ are not stand for election. Kono would likely have parties together achieve an approval rate of considered Abe’s core achievements had better chances if the option of a broader only 11.1%. However, it is interesting to note On the positive side, it is interesting to LDP election process had been selected, and that half of those participants polled have no highlight the boom in inbound tourism that he may be a strong contender in future preference, have not yet made up their mind was enabled by relaxing visa rules and elections. Former Internal Affairs and or do not want to show their preferences. providing proper infrastructure. Particularly Communication Minister Seiko Noda, who neighbouring Asian countries made Japan one had announced her candidacy over the A look back at ‘Abenomics ‘— success and of their prime foreign sight-seeing and weekend, has also withdrawn following the failure shopping destinations. However, tourism LDP’s decision to hold simplified elections. ‘Abenomics’ (安倍ノミクス) has been the collapsed and effectively came to a standstill It is interesting to note that politicians buzzword since Abe was re-elected as Prime once Japan closed its borders following the favoured by the public, like Shinjiro Koizumi, Minister in December 2012. Abe’s ‘three eruption of the COVID-19 pandemic. the son of former Prime Minister Junichiro arrows’ ignited a stock market boom, Koizumi, Osaka Governor Hirofumi Yoshimura catapulting the broad Tokyo Stock Price Index Apart from the surge in inbound travellers, and Tokyo Governor Yuriko Koike, are either (Topix) up by more than 130% in the some believe that the focus on not LDP members or are viewed as needing following three years, to a good extent driven ‘womenomics’, which resulted in continuously more political experience. by foreign buying. The ‘three arrows’ stood increasing female labour participation, has for aggressive monetary policy easing, fiscal been one of the successful elements of the The election date has been set for consolidation and structural policies to boost ‘third arrow’. Strong progress has also been September 14 Japan’s competitiveness and growth made in the field of corporate governance and work-style reforms. The latter refers to 396 LDP Diet members from both the Lower perspectives. regulations that limit overtime work or and the Upper House are eligible to vote, In May 2016, PM Abe launched ‘Abenomics promote a change in habit like not wearing a while the 47 regional LDP leaders will each 2.0’. It outlined the plan for the ’dynamic tie during the hot summer. have three voting rights. This simplified voting engagement of all citizens’, a collection of 43 format comes into play in case an LDP long-term demand-side and supply-side President steps down before regular elections. initiatives including a nominal GDP target of The regular, broader voting format would JPY 600tn by 2021, up 20% from 2015. have been comprised of up to 788 votes, which would have benefitted candidates less reliant on inner circle LDP support. It is Abe's success in promoting inbound tourism and 'womenomics' important to know that candidates need to seek support from the biggest LDP factions, 3.5 Foreign Visitor Arrivals in Japan (mn, LHS) 31 dubbed ‘parties within the party’. The LDP comprises seven factions, with only 65 out of Japan Female Labour Force Employed (mn, sa, RHS) 3.0 30 396 members with voting rights not belonging to any faction. PM Abe belongs to 2.5 the mighty Hosoda faction (97 members). 29 Other strong factions include the Aso faction, 2.0 the Takeshita faction, the Kishida faction and 28 the Nikai faction. Each of these factions have 1.5 between 47 and 55 members. While not 27 1.0 transparent, negotiations among top representatives of the mighty factions are 0.5 26 likely to give some guidance before the vote. Once the new LDP President has been elected 0.0 25 on September 14, a special Diet session will Sep 04 Sep 06 Sep 08 Sep 10 Sep 12 Sep 14 Sep 16 Sep 18 Sep 20 be called to elect the new prime minister, most likely on September 17. After appointing Source: MIC, JNTB, Bloomberg; Note: Yellow line marks the begin of 'Abenomics' PM Abe’s geopolitical influence has set The Topix during PM Abe's second term as prime minister the standard, will his successor be able to build on this legacy? 1,900 It will be interesting to see how the difficult TOPIX issue of revising the constitution will be 1,700 tackled, a prime focus of PM Abe that he had wanted to get resolved before October 2021. 1,500 The revision of Article 9, a pacifist clause, is controversial both domestically and 1,300 internationally.
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