Tuesday, July 23, 2013
Conservative Shinzo Abe Wins Japanese Elections In A Landslide - And Why It's Important
Japanese PM Shinzo Abe and the Liberal democratic Party (LDP)won a landslide victory in Japan's elections, taking control of Japan's Diet and breaking the political gridlock that has stalled a number of reforms aimed at helping Japan's economic recovery.
The coalition—comprised of the LDP and its smaller ally, New Komeito—will now control both houses of parliament for the first time since 2007.
Abe's win was based on two issues; The credit given to him by the Japanese in restarting Japan's economic engine after a long period of decline and a more conservative, proactive stance on foreign policy.
Japan's economic problems are based on deflation and economic stagnation, something Abe has tried to address with quantitative easing from Japan's central bank, tax cuts, especially for corporations, reducing Japan's social welfare state, a fiscal stimulus and major structural reforms. Unlike our own stimulus here, Abe's 'shovel ready ' public works jobs are actually getting built, and his programs have poked the moribund Nikei index as stocks have climbed.Unemployment isn't really the problem in Japan. Growth, startups and investment is. Abe is attempting to restart Japan's economy and boost consumption and he's had some degree of success. It remains to be seen whether the real structural reform Japan's economy needs are implemented.
Opening Japan's domestic markets, for instance is something that's staunchly opposed by a number of Japanese constituencies like the farmers, many of whom have large support in the Diet and in the LDP. Deregulation of a number of Japan's industries is also something Abe says is long overdue,but again there are some entrenched interests against it.It remains to be seen whether Abe can muster the votes in parliament to get policies like this implemented.
The other issue Abe scored big on with Japanese voters was foreign policy. According to Article 9 of Japan's constitution, written originally by General Douglas MacArthur after WWII, Japan is one of the few nations in the world where an anti-war stance is official policy. Abe favors revamping Japan's military, 'revisiting' Japan's constitutional pacifism and a far more nationalist stance.
This doesn't sit well with Japan's neighbors, who understandably have bad memories of the last time Japan embraced a more aggressive foreign policy. China in particular has been fairly outspoken about Abe's stance on this.
Japan sees China and particularly North Korea as threats to its security, and there's a huge constituency in Japan for bolstering Japan's defenses. This worked for Abe during the election, as a direct consequence of the Obama Administration's failure to stop North Korea from missile launches and actually attempting to bribe China to lean on North Korea by removing our missile defense systems in the region. .Japan, like Europe had gotten used to America defending it and this came as a huge shock.
Japan will almost certainly spend more time and effort on its military and defense as a result. Whether the Obama regime will embrace this and consolidate it as part of our long standing alliance with Japan is another question.
As General MacArthur said many years ago, the Western Pacific is America's strategic redoubt. It's key to our ability to be able to fight a war on two fronts if necessary. That hasn't changed. If we forget that, forsake long time allies and remove ourselves from th equation, someone else is going to step into that vacuum.
That's why this is far more important than just an election.