28/11/2014
Pablo Guerrero, political analyst.
The Prime Minister of Japan, conservative Shinzo Abe, announced last November 18 the dissolution of the House of Representatives of the Diet (lower house of the Japanese Parliament) and called for early general elections to be held on December 18. It is highly unlikely that the Japanese political landscape will change in such a short period of time as much as to make the coalition government headed by Abe, made up by the historic Liberal Democratic Party (LDP) and the Buddhist party Komeito, lose their majority – currently overwhelming – in the House of Representatives. According to the polls, the LDP would reduce its parliamentary representation by 55 seats maximum, allowing for the comfortable survival of the ruling coalition. However, though the snap elections seem to obey Abe's desire to acquire a renewed popular mandate enabling him to thoroughly renew his Cabinet and implement the many pending reforms, it is very difficult not to interpret the upcoming elections as a sort of plebiscite around the so-called Abenomics, i.e. the program of expansionary economic measures adopted by Abe in 2012 to pull Japan out of stagflation.
Measures that, two years after their launch and despite a promising first phase, which pushed Abe to proclaim that Japan 'was back,' have not helped to invigorate the Japanese economy in a permanent way. Indeed, Japan, the third largest economy, has officially entered recession in 2014, having recorded a GDP contraction of 0.4% in the third quarter and a decrease of 1.9% between April and June. Of the three 'arrows' of Abenomics, monetary easing, fiscal stimulus and structural reforms, only the first has been applied thoroughly in the form of massive injections of liquidity by the Bank of Japan. The targeted fiscal stimulus has been replaced by a stark and unpopular austerity, while the urgent structural reforms have been reduced, as has happened in some states of the euro-zone, to a minimum. Hence the Japanese labour market continues being extremely rigid and insurmountable barriers to imports of certain agricultural and livestock products still persist, defended by powerful interest groups linked to the PLD. The Abenomics, besides not reporting the expected benefits given the absence of tangible reforms, have extended the application of the fiscal and monetary stimulus which, after more than two decades of implementation, have proved to be counterproductive to overcome the economic stagnation suffered by Japan since the beginning of the 90s. In fact, the weakness of the Japanese economy is so great at present that Abe has been forced to postpone to 2017 a further increase of the VAT, which was already raised last April from 5% to 8%.
In any case, despite the profound social impact of the poor economic performance of the country, the opinion of the Japanese electorate on the foreign and defence policies conducted by its government will no doubt take their toll on the December elections. The Prime Minister's announcement to reinterpret the pacifist Japanese Constitution, and in particular its crucial Article 9, so as to give greater powers to the Japanese Self-Defence Forces, has raised some concern in China and South Korea. Beijing and Seoul have reacted in the same way after Abe's visit to Yasukuni Shinto shrine, which honours 2.5 million Japanese soldiers fallen in military conflicts. If that were not enough, the firm attitude of the Japanese Government before the Chinese territorial claims in the East China Sea has added tension to the deteriorated relations with Beijing. The meeting between Abe and the Chinese President, Hi Jinping, during the last summit of the Asia-Pacific Economic Cooperation (APEC), should be the first step in the adoption of confidence-building measures between the two countries. A necessary and urgent goal, as Sino-Japanese understanding is absolutely necessary for the Asia-Pacific region to realise their immense potential and progress steadily along the path of political and economic development.