Big election win for Abe could strengthen vested interests

By Linda Sieg

Will the real Shinzo Abe please stand up?

Abe, back as Japan's premier in a rare second term, is expected to lead his ruling bloc to victory in a July 21 upper house election, but what he will do with the mandate is a puzzle.

Pessimists fear too decisive a win will weaken commitment to reforms needed to end the stagnation that has long plagued the economy.

The risks are twofold.

First, a massive victory by Abe's Liberal Democratic Party (LDP) could generate complacency even as swollen ranks of conservative lawmakers strengthen the hand of the vested interests that have long been the LDP's core constituencies.

Second, Abe may use his mandate to push a conservative agenda centered on revising the pacifist constitution - recognizing Japan's right to maintain a military - and recasting its wartime history with a less apologetic tone, distracting from difficult economic reforms.

"If they win, the government will be very stable, but stability creates laxness," said former Economics Minister Hiroko Ota, a member of an advisory panel on deregulation - touted by Abe as a key component of his "Third Arrow" growth strategy.

The first two "arrows" in the "Abenomics" policy prescription were hyper-easy monetary policy and fiscal spending, neither of which faced much political opposition.

"The issues that remain face strong opposition and that is why they were not possible so far," Ota told Reuters. "That is why we need to remain intensely on guard."

Pledging to revive growth in the world's third-biggest economy, bolster its defense posture and alter the constitution, Abe took office after the LDP's general election win last December. That was just over five years after he abruptly resigned from the country's top job due to ill health and a humiliating loss in an election for parliament's upper chamber.

But the LDP and its junior partner, the New Komeito, still lack a majority in the upper house, which can block legislation. Abe and his allies need a win there both to end the "twisted parliament" that has foiled policy implementation since 2007 and to wipe away the bitter memory of his earlier defeat.

Buoyed by a stellar win in the June 23 Tokyo local election, the LDP and New Komeito look on track for a solid majority in the upper house contest. Some political sources say Abe's party may win a majority on its own.

Pessimists fear that too big a win for the LDP would bolster the opposition to regulatory reforms from lawmakers with close ties to industries and sectors that would suffer from change.

"Winning the upper house election is not the key to pushing through the structural reforms that Japan needs because the vested interests are only going to get stronger," said Jeffrey Kingston, director of Asian studies at Temple University's Japan campus.

Others, such as LDP lawmaker Kozo Yamamoto, said a big win would give Abe the clout to push unpopular economic reforms such as steps to make it easier to fire unproductive employees and downsize away from unprofitable sectors.

"We can't do it now, but if the LDP and New Komeito win a majority, we can do it," Yamamoto said.

The party and Abe's advisers are divided between those who favor old-fashioned industrial policies with the government targeting winners, and a pro-deregulation camp that wants the government to get out of the way to spur innovation.

Financial markets disappointed by the "Third Arrow" measures want to see signs the latter group is gaining the upper hand. "What markets will be looking for is a very clear commitment to specific medium-term, growth boosting structural reforms," said Alastair Newton, senior political analyst at Nomura Securities.

"There has to be more substantive delivery in the reform agenda once the election is out of the way to sustain the more positive sentiment about Japan."

Abe aides say he has learned a harsh lesson from his troubled 2006-2007 term, when his focus on revising the U.S.-drafted constitution, promoting traditional values and fostering patriotism in education instead of pocket-book policies close to voters' hearts was a key reason for his early exit.

Few believe, however, that the priorities of the 58-year-old grandson of a prime minister have fundamentally altered. Some still fear he will be tempted to spend political capital on contentious policies such as lowering the legislative hurdle to constitutional revision as a prelude to revising Article 9 to loosen limits on the military.

Observers also wonder whether Abe will visit Tokyo's Yasukuni Shrine on the Aug 15 anniversary of Japan's World War II defeat, a pilgrimage he avoided as premier the first time. A visit to the shrine, where Japanese wartime leaders convicted as war criminals by an Allied tribunal are honored with war dead, would inflame tensions with China and South Korea, which suffered under Japan's past militarism.

"Structural reform would be easier to promote (if the ruling bloc wins big) but the question is, what is his agenda?" Junji Annen, a Chuo University Law School professor who sits on the same deregulation panel as Ota, told Reuters. "Is it economic revitalization or constitutional reform? Only Abe knows."

The two, however, may not be mutually exclusive. Abe's agenda also aims to boost Japan's regional and global security clout but exercising influence - especially in the face of a rising China - requires a strong economy.

"A country that has lost economic power cannot maintain its national power," Abe told a recent news conference, adding he would focus on reviving the economy after winning the poll. "To ensure national power and pride, we need to regain a strong economy."

© (c) Copyright Thomson Reuters 2013.

©2021 GPlusMedia Inc.

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The upcoming national elections will be a true test of the confidence of the Japanese voting majority concerning the proposals set forth by Prime Minister Abe and his LDP. Prime Minister Abe has projected an image of an economic reformer who is willing to turn Japan upside down in order to shake up a stagnant economy, and return Japan to prominence. Having said this, the challenge is whether or not Prime Minister Abe will be able to successfully meld his Conservative Political agenda with his Economic Revitalization agenda, in a manner which will encourage development and not discourage development. Reforming the Japanese Economic System is a formidable task, and should take center stage and remain center stage. Reforming the Constitution, while important, should not constrict the progress already achieved under Prime Minister Abe's leadership. As the Prime Minister stated, "A country that has lost economic power cannot maintain its national power,” Abe told a recent news conference, adding he would focus on reviving the economy after winning the poll. “To ensure national power and pride, we need to regain a strong economy.” Thank you very much. Respectfully Submitted: Mark Kazuo Bradley Honolulu, Hawaii.

1 ( +1 / -0 )

What regulations has he curtailed to allow this to occur?

Or is this just more of the same big spending, borrowing that has failed the EU and USA

-1 ( +1 / -2 )

Big election win for Abe could strengthen vested interests

I realize that it is impossible to predict the future, but I would say that this should read 'Big election win for Abe WILL strengthen vested interests" as history shows the LDP is always lining the pockets of it's supporters.

2 ( +3 / -1 )

Sadly, too many people don't care enough to vote. They care enough to complain, but not to vote. Giving the Abe Gov control of both the upper and lower houses will enable his government to do whatever they like. His plans to change the constitution, strengthen the military and denounce history are really scary. This loon and his cronies will start another war in Asia.

-1 ( +1 / -2 )

Elections should not be called by those in power - there's a basic safety in balance. The world is crazy, I say.

-2 ( +0 / -2 )

The upper house elections are held every three years by law. The term is six years. Those elected in 2007 are up for re-election this month.

1 ( +2 / -1 )

All politics in Japan is about vested interestes. Look at the mess DPJ made of things precisely because they couldn't properly manage those interests.

0 ( +1 / -1 )

Oh, the poor left wingers are already crying the blues and the election hasn't even taken place yet. Lol, guess they want another 20 years of stagnation.

-3 ( +0 / -3 )

Not "could" will.

The last 20 years of vested interests have been cause by the right's terrible decisions and their own self interests. They were the one's who got the country in the whole it has been and then fiddled while the country burnt- 30,000 suicides a year says a lot. More deaths than what were caused by Hiroshima and what did the government do about it nothing, that is until Noda and his lot came in and started to implement some programmes.

While Abe was in last time all he was interested in was patriotism. He may be keeping his mouth zipped for now but wait til after the election when we can see what his real plan for things is.

Had a visit to the Kochi to see Ryoma Sakamoto. Pity that everyone has forgotten about him

0 ( +0 / -0 )

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