TV & Radio
Sep 28th 2006
From The Economist print edition
The new prime minister of Japan has to win trust at home and abroad
THE man who became Japan's leader this week is, at 52, the country's youngest prime minister since the second world war, and the first to have been born after it. His inexperience and his so far largely unarticulated intentions leave everyone guessing. If there is a prevailing opinion, it is that Mr Abe will not have the flair, the authority, or perhaps even the gumption to carry forward the structural improvements to Japan's economy wrought by his unconventional predecessor, Junichiro Koizumi. What authority Mr Abe can muster, it is suggested, will dwindle as defeat looms for his ruling Liberal Democratic Party (LDP) in next July's elections for the upper house. So it is feared that Mr Abe, a hardliner by instinct, will try to distract voters from a dismal domestic record by gratuitous nationalistic provocation of China, and South and North Korea. When they snarl in their different ways, he will scuttle back under America's skirts.
All possible, certainly. But there is a more hopeful prospect: that Mr Abe, representing a generational change, pushes forward reforms at home and reaches for a bigger role abroad, while undoing the damage to Japan's relations with its neighbours caused by Mr Koizumi's stubborn visits to Tokyo's Yasukuni shrine, a symbol of Japan's past militarism. Mr Abe was due to lay out his priorities to parliament on September 29th, after The Economist went to press. But the government line-up that he announced on September 26th (see article) hints that it is this second path that Mr Abe hopes to take.
In traditional fashion, Mr Abe has rewarded older politicians and party factions that early on backed his rise to power. But he has also appointed eager and youngish reformers to key cabinet posts. In foreign policy, he looks like relying on fellow conservatives like himself, but ones with a practical streak—notably Taro Aso, who stays on as foreign minister.
How to revive an ageing economy
Though Mr Abe inherits an economy that has grown for four consecutive financial years, that luck cannot last forever. Japan needs stronger foundations for growth, but they can be laid only by taking on powerful interests. Despite huge changes to the economy, some sectors—including some in manufacturing and much in services—remain largely unreconstructed. Foreign capital would do much to create prosperity and jobs. So Mr Abe needs to improve the climate for investment, including making it easier for foreigners—as well as locals—to acquire Japanese companies.
Growth, and a definitive end to long years of deflation, would bring the exchequer fresh revenues. But with an ageing and shrinking population this would not be enough to plug the budget deficit and bring down Japan's scary levels of national debt. The caps on annual government borrowing and cuts to government projects, both introduced under Mr Koizumi, must therefore continue, and there is much scope still for privatisation. But, unavoidably, taxes must also go up. Mr Abe has studiously suppressed a debate about raising the consumption tax. Even with elections next year, he must start talking about it, in the context of broader fiscal reform that encourages investment and helps people find work. Hardest of all, he needs to tackle the health and social-security costs that eat up so much of the budget. This means challenging powerful medical and pharmaceutical interests, as well as explaining to those who can afford it that they must pay more for benefits. The prize will be a perkier, more resilient economy.
Drawing Yasukuni's sting
Both at home and abroad, Mr Abe will have to put the case better than others have done for Japan's legitimate desire to play a bigger—more “normal”—role in the world. Long held back not just by a pacifist-sounding constitution, but also by a lack of imagination, Japan under Mr Koizumi made commendable moves towards a more muscular and constructive diplomacy that better matched its economic clout. Its naval supply ships have helped in the battle to defeat the Taliban in Afghanistan. It sent peacekeepers to Iraq. And, unprecedentedly, it took the diplomatic initiative in responding to North Korea's missile tests in July, winning a toughly worded UN resolution that eventually had China's support.
Mr Abe wants to go further. He would like to loosen Japan's constraints on “collective” self-defence that prevent both joint military exercises and the defence of allies under fire. Ultimately he wants to revise the pacifist constitution. These are desirable goals, yet they arouse deep suspicions among neighbours—notably China and South Korea. Only last year, China scuppered Japan's bid for a permanent seat on the UN Security Council. And bad relations between the two make it harder to draw China in as a “responsible stakeholder” in East Asia and beyond. On relations with South Korea, the signs are promising. Mr Abe and President Roh Moo-Hyun have agreed to meet. But the most important move that Mr Abe could make to help reconcile his foreign-policy ambitions with the neighbours' suspicions is to avoid visiting Yasukuni.
Given the right signal, China would jump at the chance to resume top-level summits that were suspended with Mr Koizumi. South Korea also says it wants a more “forward-looking” relationship with Japan. Drawing the Yasukuni sting (later a way needs to be found to honour Japan's war dead but not the 14 “Class A” war criminals also enshrined there) will even help with Mr Abe's next priority: strengthening Japan's security alliance with America, which would like to see Japan's relationship with China improve. Meanwhile, Mr Abe could better explain to Japanese voters the benefits of the alliance with America—something Mr Koizumi was not always ready to do. And he needs to add an economic dimension, perhaps by floating the idea of a free-trade agreement, such as the one America is pursuing with South Korea.
Mr Koizumi's decisions to visit Yasukuni seem to have been emotional. Mr Abe, a regular up to now, is a more pragmatic character. He has not yet signalled what he plans to do; but a cool assessment of both his and his country's interests would argue for staying away from the shrine.