Japan: A new era or a step back?

In the elections in December, Japan voted in the conservative Liberal Democratic Party, making Shinzo Abe the Prime Minister.

This marks his return to the premiership following his resignation in 2007; it also makes him the seventh prime minister in the space of six years.

Abe’s party holds a majority in the House of Representatives, but are forming a coalition government with the New Komeito party, securing 325 members of the 480 seat lower house. This enables the coalition to override the Upper House (the House of Councillors), where the Democratic Party are the largest party.

Abe has assembled a cabinet made up of economic specialists in order to kick-start the failing Japanese economy. He doesn’t have long to impress, however, as the Upper House elections are due to be held in August 2013.

In 2007, Abe resigned from office after his party lost control of the Upper House and his opinion polls plummeted. Ahead of the 2012 election, he told Japanese media that he had learnt from that: “I have experienced failure as a politician and for that very reason, I am ready to give everything for Japan,” he said.

The new Abe era
His return to the frontline will see a campaign for a stronger international role for Japan at a time when the Japanese public are raising concerns over the country falling behind China economically and diplomatically.

Abe is calling for an amendment to the longstanding pacifist post-World War II constitution in order to strengthen the country’s military strength. The country will bide their time by gaining support from their Asian neighbours at a time when both America and China are bolstering their military presence in the region.

Maintaining regional relations will be especially important as territorial disputes with China, Russia and South Korea seem to be coming to a head. Abe has started his term by dispatching special envoys to all three countries to try and ease relations, but he is expected to take a firm stance on the issue.

Mr Abe will also be meeting with President Obama in the new year to discuss both the continued presence of US military bases in the country and closer trading ties as a member of the Trans-Pacific Partnership. The new leader is also looking to improve relations with China, take a hard line against North Korea and no doubt work with the new President of South Korea but their main focus seems to be on the home front, the economy.

Other issues that will confront the new coalition government include calls for the independence of the central bank in order to meet policy objectives, along with a 10 trillion yen investment in the economy and emergency spending.

Economic woes
Shinzo Abe has tasked his Cabinet with fixing the floundering economy and he confirmed this at a news conference: “We will deliver results with three arrows: bold monetary policy, flexible fiscal policy and growth strategy” the new Prime Minister declared.

His economic team includes Finance Minister and Deputy Prime Minister Taro Aso, and Akira Amari, the minister who will be heading the economic rebirth of Japan. Both are closely connected to the Prime Minister and held key policy posts at the Liberal Democratic Party.

A core ambition for the new government will be to solve the yen’s appreciation whilst ending deflation. The Japanese economic turnaround will be centred at the ‘economic rebirth’ headquarters, that Abe hopes to set up as a central command.

His first Cabinet Meeting held on Boxing Day (26^th December) saw ministers ordered to create a supplementary budget for the current fiscal year, through March and a full year budget for the new year, with the aim of ‘removing barriers’ and thus ending deflation. “We will develop a growth strategy in the form of a concrete road map, and the government will commit to it,” Amari told the press.

Toshimitsu Motegi, the new industry minister will be watching eagerly to see competition increase across all sectors of industry. Motegi needs to understand the reality that China is clearly emerging as the largest producer of automobiles, steel, TVs and personal computers whilst neighbouring South Korea and Taiwan are key suppliers of innovative products such as smart-phones and 3D-TVs. To remain competitive, Japanese industries will need to increase their investment in research and development in line with China.

Saving the economy is key to winning the upcoming Upper House election in August 2013. A majority will pave the way for educational reform, military strength growth and a turnaround in the industry sector.

Fostering an alliance
On gaining the Upper House, the economy should begin to show signs of improving, but already preparations are underway for major reviews of the countries standing within the international community, as well as reviews of reforms on the Constitution and education system.

The new Government is trying to repeal the ban on collective defence by changing the Japanese constitution. This is a positive move for America, which has one of its largest military bases in Japan. With approximately 50,000 US military personnel, they are a vital ally for Japan if a conflict does arise.

Abe believes that American budget cuts and a decreasing America military presence in Asia will increase instability in the region, especially given the disputed islands and the North Korean nuclear programme, Abe concludes that Japan ‘must foster an alliance with the United States that can hold up under these circumstances.’

Such a move though will send shivers down the backs of the near neighbours especially those that fell victim to the wrath of Japan. “Japan’s history of aggression is what every close neighbour in Asia and the global community at large are highly concerned about” said Hua Chunying, a spokeswoman for the Chinese Foreign Ministry.

Nevertheless, Chunying believes that the friendship between China and Japan is important: “a healthy and stable Sino-Japanese relationship meets the fundamental interests of the two countries,” she stressed.

“We hope the new Japanese government can work together with China and make real efforts to overcome the difficulties and get the bilateral relationship back on track,” said Chunying.

On the other hand, South Korea’s new leadership should lead to better relations between the two countries. Korean academic Chun Chae-sung believes bilateral relations between Korea and Japan had shown signs of improvements from the beginning of their new government.

However, Chun thinks it’ll be difficult this time due to the Japanese political shift to the right, a shift that has not gone unnoticed by both North and South Korea.

What lies ahead?
Should Prime Minister Abe be successful in performing an economic turnaround, Japan may see major changes in their standing in the international community. A closer relationship with the American government would enhance not only military cooperation but trading relations, and increased standing in the Far East will be important to defend themselves against the growing and evolving Chinese economy.

The first opinion polls for Abe and his cabinet were encouraging, showing support between 52-62%, something he will want to maintain for the upcoming Upper House election. The public have put their trust in him in the hope that he can rescue the economy, but if he fails, Japanese recovery will be even slower than many thought.