Abe’s Rousing Reprise

They call Shinzo Abe “recycled” because during the past decade, he spent less than a year serving a very forgettable term as prime minister of Japan. And today he is premier again.

Last month, Abe led his party to a landslide election victory on a campaign promise to get tough on China and resurrect a Japanese economy that had been brain dead for almost three decades.

Some skeptics call this triumph of the Liberal Democratic Party “the return of the dinosaurs,” a reference to its erratic rule over the decades that led to Japan’s economic decline.

I asked a diplomat from an Association of Southeast Asian Nations country who once served as ambassador to Japan if Abe would do better the second time around. “Oh, he will do better,” the diplomat replied. Then he added, “Anybody will do better than his predecessor.” That’s not saying much for Abe.

But elsewhere there’s optimism for Abe, mainly because he has adopted an economic policy that represents “thinking outside the box,” which no Japanese government was capable of before Abe II.

In the 1980s, a real estate bubble forced the Japanese economy into a recession and the LDP continued to dole out huge loans to corporate giants that proved to be both weak and deadbeats. It kept on coddling special interests that were economic parasites. The government spent large sums on public works but choked back on spending before the economy could rise out of the deflation.

Until Abe’s second stint as prime minister, which is barely a month old, no government dared inject the economy with a sufficient dose of stimulus — in this case, a $116 billion shot in the arm that is supposed to create 600,000 jobs. The paralyzed economies of the developed world are watching how Japan’s economy performs now that it’s free of its irrational fear of debt and deficit. Maybe the US can learn a thing or two from the unfolding Japanese drama.

That stimulus, by the way, will also benefit the economies that trade with Japan. There’s at least one news report that, according to Credit Suisse, Indonesia leads a string of nine Asian economies that will benefit from the stimulus. That’s because Indonesia not only exports commodities to Japan but also imports a lot. And it’s no coincidence that most of those benefiting economies are Southeast Asian: they have always been among Japan’s keenest trading partners and recipients of Japanese foreign direct investments.

It’s of more than passing significance therefore that Abe’s first foreign trip soon after this election as prime minister should be to Southeast Asia: Vietnam, Thailand and Indonesia. Many observers say that this was obviously an effort to counterbalance China’s increasing influence in the Asean region. That may be so. But as long as he came to woo and not to make a common hostile cause against China, he can’t be faulted.

While in Indonesia, he said: “China is positive for Japan in the economic sector but China must also be responsible in contributing to a more peaceful and stable region.”

What he said of China applies to Japan. Both economies are hurting because of their sparring over the Diaoyo/Senkaku islands. Both can contribute to the stability of Asia by resolving their dispute through diplomacy and negotiations based on international law.

It would help if China were less gunboat-assertive and more diplomatically talkative about its territorial claims. It would also help if Japan finally unburdened itself of a dark chapter of its history — on its atrocities during the Pacific War — instead of trying to rewrite it.

In the economic realm, Abe may have achieved transformation. But in facing up to Japan’s moral responsibilities in World War II, he has not changed. He has yet to mutate his dinosaur genes.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s