What Now for Abe with his New Mandate?

The Japan Times

Nov 1, 2017

Shinzo Abe, who was re-elected Wednesday as prime minister following yet another landslide victory by the ruling coalition in the Oct. 22 general election, is on a more solid political footing than when he took on the election gamble in late September. On the back of his fifth-straight triumph in national elections, Abe winning a third term as chief of his Liberal Democratic Party next year now looks all but certain, possibly keeping him as prime minister through 2021. The next question is how he will use his new mandate and his likely extended lease on power.

In calling the snap election, Abe said he was asking voters for a new mandate for his administration to cope with the security threat posed by North Korea’s ballistic missiles and nuclear weapons programs and the demographic challenges of the nation’s aging and declining population — both of which he called national crises.

The prime minister has maintained a tough position toward North Korea, calling for a tightening of the screws to force Pyongyang to give up its nuclear and missile development and ruling out dialogue with the Kim Jong Un regime. He has thrown Tokyo’s full support behind the U.S. administration of President Donald Trump, which maintains that all options — including military — are on the table in dealing with North Korea. Abe is expected to try to cement tight cooperation between Japan and the United States on the issue when Trump visits Tokyo next week as part of the first Asian tour of his presidency.

Following the victory of his LDP-led coalition, Abe said responding to the aging population and low birthrate “will be the key to the nation’s sustained growth” and “the biggest challenge of Abenomics.” His even firmer grip on power after the Lower House election should put him in a better position to tackle structural problems. Abe proclaims he’ll reform the social security system into one geared to serving all generations — by beefing up support for children and child-rearing families.

But it still needs to be scrutinized whether the policy he suddenly proposed prior to the election to make preschool education and nursery services for children free — by diverting some of the revenue from the next consumption tax hike that was originally earmarked for repaying government debt — is the right tool for that. As the prime minister acknowledged, the policy makes the government’s target of achieving a primary budget balance — deemed a milestone in Japan’s bid for fiscal consolidation — by fiscal 2020 impossible. His administration needs to come up with a new road map for fiscal rehabilitation as quickly as possible.

Nearly five years after his administration took power, the economy appears to be in good shape. The GDP has expanded for six quarters in a row for the longest growth streak in 11 years. Big companies are enjoying record-level profits, and the Nikkei 225 average on the Tokyo Stock Exchange, which more than doubled under Abe’s watch, hit a 21-year high this week. The labor market is now the tightest since the 1970s.

At the same time, the annual 2 percent inflation target, set by the Bank of Japan in 2013 in its quest to bust deflation, remains elusive. Growth in consumer spending continues to be weak as wage gains remain stagnant. Abe’s latest call on the big business community to raise their employees’ wages by 3 percent next spring — after this year’s pay raises fell short of the previous years’ levels — highlights slow wage growth and a weakness in personal consumption as the missing components of the virtuous cycle of the economy that his administration has struggled to achieve.

Also likely on the political agenda will be a constitutional amendment. As a result of the Oct. 22 election, political forces that favor amending the Constitution, including the ruling coalition of the LDP and Komeito, now occupy nearly 80 percent of the seats in the Lower House, along with the two-thirds majority that they hold in the Upper House. Abe, who earlier this year sought a constitutional amendment by 2020, has indicated that he would seek to deepen discussions on the issue to build a broad consensus on an amendment within both the ruling and opposition parties. He reportedly plans to get the LDP to submit the party’s draft amendment to the regular Diet session next year.

As it is, however, the forces that either favor or condone an amendment differ on the specifics of what to change in the Constitution, how and why. There is no consensus yet within the LDP-Komeito coalition or even among LDP lawmakers on Abe’s proposal to revise the war-renouncing Article 9. The prime minister should consider carefully whether amending the Constitution is a priority issue on which he should expend energy and resources given the mounting policy challenges facing his administration.

(https://www.japantimes.co.jp/opinion/2017/11/01/editorials/now-abe-new-mandate/#.WfwrmYYxWuU)