No excuse not to deliver on the promises, Mr Abe

Japan’s Prime Minister now has a rare opportunity to push ahead with  reforms


The emphatic victory of his Liberal Democratic Party in Sunday’s elections has given the Japanese Prime Minister, Shinzo Abe, a rare opportunity to push through the long-term reforms long needed to put the world’s third largest economy on a new, more vigorous footing.

It is vital such a chance is not thrown away – and vital, too, that, armed with a mandate unprecedented in recent times, Mr Abe does not instead set his country on a path of nationalist confrontation with its neighbours.

Since he regained the prime ministership last December, he has made an encouraging start. Under what has been dubbed “Abenomics”, monetary and fiscal policies have been loosened. The result has been a surge in business confidence, as the stock market has soared 40 per cent since the start of 2013, while the yen has fallen, giving Japanese exporters, especially its struggling electronics companies, a needed boost. Consumers have yet to benefit, though Mr Abe insists they will. Sunday’s low turnout notwithstanding, the election result suggests they tend to believe him.

No less important, the outcome ends – for now at least – Japan’s so-called “twisted” democracy, under which opposing parties have each held one house of parliament since 2006, consigning the country to virtual political paralysis. Over that period, six prime ministers came and went, including a dismal first stint  from Mr Abe that ended, after only a year, with a popularity rating of 30 per cent. Now, barring a major surprise, he has three election-free years to push through the structural changes required for long-term success.

It is these that are the real test. Much-needed reforms include an overhaul of the pensions system, labour market deregulation, and agricultural modernisation to consolidate smaller units into larger and more efficient ones. But Japan is a highly traditional state. The steps required will inevitably bring Mr Abe into conflict with powerful groups like the unions and small farmers (these latter an important support base for the LDP). There is also the small matter of an increase in sales tax, set to double to 10 per cent in the next 18 months, which could jeopardise the current recovery.

There are other dangers, too. The Prime Minister has strong nationalist leanings which can have done him no domestic harm at a time when Japan feels threatened by the growing assertiveness of its traditional regional rival, China. Mr Abe would like to revise Japan’s pacifist constitution, drafted by the American occupiers after the Second World War. Seventy years on, a desire for a more powerful Japanese defence force is understandable. But nothing would be worse than to fuel further tensions in an already edgy region, where China and South Korea – ever mindful of Japan’s militaristic past – have long been upset by Mr Abe’s habit of playing down his country’s wartime atrocities.

Fortunately, in his second prime ministerial incarnation, he seems a wiser man, aware that the country is still wary of wholesale change to a constitution which on the whole has served it well. And aware, also, that Sunday’s vote, while impressive, is not a blank cheque. To borrow an old US political slogan: “It’s the economy, stupid”.

It is here that Mr Abe promises to focus – and he has promised much. His ability to deliver hinges on his ability to maintain his focus, while maintaining the unity of his party. A cabinet reshuffle this autumn will provide another pointer on how he plans to use last weekend’s victory – and whether he can make real progress towards the tricky structural reforms on which Japan’s future depends.

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