What next for Japan?

Prime Minister Shinzo Abe’s Liberal Democratic Party (LDP) has won a decisive victory in Sunday’s elections to the lower house of the Japanese parliament.

Together with its coalition partner, the Buddhist-backed Komeito party, the new government has secured a super majority of 326 seats in the 475-strong House of Representatives.

The LDP’s individual strong performance, securing some 291 seats in all – although a four-seat reduction on its pre-election standing of 295 – is a vindication of Mr Abe’s gamble in late November of calling a snap election.

At the time, the government claimed that it needed to secure widespread public backing for a combined package of government spending, structural reform and an eventual increase in the country’s consumption tax from 8% to 10%, now scheduled to take place in the spring of 2017.

Abe has been quick to hail his victory as a popular endorsement of the government’s policies.

But the outcome represents less of an unambiguous vote of support for the administration and more of a strong sign of popular disillusionment with mainstream politics, and doubts regarding the effectiveness of Japan’s opposition parties, most notably the Democratic Party of Japan (DPJ).

Popular sentiment, according to a recent poll, remains finely divided.

Some 54% largely approve of the government’s so-called strategy of ‘Abenomics’, which focuses on the trio of fiscal and monetary policies and structural reform.

But around 46% remain sceptical of the government’s economic policies.

With voter turnout at a post-1947 historically unprecedented low of 52%, the election was determined by the opposition’s failure to present itself as an effective and credible alternative to the government.

Divided between the country’s second-largest party, the DPJ, and the third largest Japan Innovation Party, along with a plethora of ‘third pole’ smaller groupings, the opposition parties were caught of guard by the surprise announcement of an early election.

They had insufficient time to present credible policies to the electorate or, in the case of the DPJ, field enough candidates to have a chance of overturning the government’s majority.

Competing interests

Abe has made it clear that he will focus his energies on the economy.

He is launching a $16 billion to $25 billion stimulus package early in 2015 in an effort to boost consumer demand to compensate for rising food and import prices associated with a devalued yen.

However, it is unclear how the government will reconcile this with the long-term need to reduce Japan’s record levels of government debt, while also cutting social welfare spending and meeting the demographic challenges of a rapidly-ageing Japan.

This all has to happen at a time when the government has pledged to both cut corporate tax rates and refrain from increasing indirect taxation until spring 2017 at the earliest.

The government is likely to use its new ‘mandate’ to move swiftly to push through a number of unpopular policies, including:

• restarting some of the country’s 48 mothballed nuclear reactors
• promoting trade and agricultural liberalization as part of the contentious Trans-Pacific Partnership (TPP) talks
• enacting legislation to codify the country’s new collective self-defence provisions, to allow Japan’s military to participate in a broader range of activities in East Asia and globally
• strengthening security cooperation with the United States, particular over the status of US forces in Okinawa

The prognosis for success for Abe is unclear.

Many of these policy changes remain divisive at home and abroad, and the government is likely to face strong opposition from interest groups, particularly at the local level.

However, Abe can take comfort from the absence of any strong challengers within his own party.

Long game

His political position and authority within the LDP remain secure until at least 2016, when elections to the country’s upper house take place.

He can probably count on another four years in office, in addition to the two years he has already served.

In a Japanese political context, where leaders typically remain in power for less than a year, Abe has the luxury of time on his side.

This may enable him to think and plan ‘proactively’ and ‘strategically’ – two approaches that typify his policy-making style.

Time and renewed parliamentary strength is also likely to embolden him to strive to overturn some of the institutional and structural obstacles that have all too often bedevilled policy-making in Japan in the past.

In the process, the government may dilute some of the consensus that has been a hallmark of Japan’s political culture, but not perhaps before time if the country is finally to put in place genuine and lasting reform.

This article is published in collaboration with Chatham House. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Dr John Swenson-Wright is Head, Asia Programme at Chatham House.

Image: Japan’s Prime Minister Shinzo Abe attends a news conference. REUTERS/Toru Hanai