Asia Timur

Abe Needs to be Back on Track!

ABEJapan experienced as one of the miracles in the world economic development from the 1960s which introduced Japan as the strong economic modern country. But, after the 1990s, when the ‘bubble economy’ stroke, Japan lost its highly-developing days and enter the ‘lost decade’. Since then, Japanese economy has been slowing down each year, while at the same time waiting for someone coming to fix that economic disaster. Abe Shinzo is not a new person in Japanese politics, since his grandfather used to be the Prime Minister and his father was once a Foreign Minister of Japan. In 2006 when he first time reigned in power, Abe could not show much about his visions to develop Japan, instead his cabinet was filled with many undisplined persons and famous with many blunders, and unfortunenately a serious stomach problem led him into resignation. But, in 2012, when he made a political come back as a prime minister, Abe somehow brought innovative visions to fix Japanese economy. The so-called ‘Abenomics’ with the three arrows made people believe that Abenomics would bring Japan into a new future. In the early time, Abe seemed to be very focus on his economic reform programs. Moreover, while he couldn’t manage his cabinet properly on his last leadership, this time Abe showed his leadership showed with the very disciplined cabinet. Abe seemed to be reliable to bring Japan into a new economic development. But, after the 2013, he seemed lost his track and walked towards a goal which not relating to his economic reform. Since that time, Abe’s approach is heavily focused on high-profile security issues. Nevertheless, a focus economic reform is what Japan really needs now. Thus, in my opinion, Abe needs to be back on his previous track on economic reforms.

Abe Lost His Focus

Optimism on the ‘Abenomics’ program echoed throughout the country. It was in this challenging context that Prime Minister Shinzo Abe, in late 2012 and early 2013, rolled out a comprehensive approach to reviving the Japanese economy, summarized by three policy arrows: aggressive monetary easing, flexible fiscal policy, and structural reforms to raise potential growth. The idea was this: An escape from deflation triggered by monetary easing and fiscal stimulus would lower real interest rates and stimulate investment, consumption, and—with the yen at least temporarily weaker—exports. Structural reforms would boost confidence in the near term and ensure that higher growth was sustained over the longer term. Lower real funding costs and higher growth would improve debt dynamics. And a credible medium-term fiscal plan would curtail risks of a government bond rate spike and allow for a measured pace of adjustment. Complementarities among policies would be the key—all three arrows would be required for success. But if all went according to plan—a big and highly uncertain if—a more dynamic Japan would emerge, with higher growth and lower risk of a fiscal crisis in its future.[1]

Those innovative idea sounds compromising for the Japanese people. In the two-first quartal of Abe’s leadership, many traders gave very good sentiments toward Japanese capital market.[2] But, began in the middle of 2012, Japan faced a major distraction towards its political body; the Senkaku Islands claim. Since then, Abe conducted many diplomatic agenda to counter Chinese influence in the East Asia Sea. Abe conducted several meetings with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) gathering in Beijing. During the those years, tensions have escalated between Japan and China over islands in the East China Sea or known in Japan as the Senkaku Islands. Diplomatic ties between the two countries have been frozen since 2012, when Japan purchased the islands, and Abe has also come under criticism in China for his 2013 visit to the Yasukuni Shrine to Japan’s war dead, which includes World War II war criminals.[3]

Futhermore, since August 2013, he seemed overwhelmed with his own agenda to reform the pacifistic Article 9 Japanese Constitution. Since then, Abe was busy with dealing and negotiating to the coalition party or the opposition party to support his agenda to build Japan independent from the US in terms of security. Abe’s overriding wish is to amend the Constitution raises important questions. There are strong arguments that it would be honest to admit that, in spite of the renunciation of war, the SDF is as strong as any army, well enough trained to defend any intruders on Japan’s interests. Critics of the present system say that it leaves Japan’s security dependent on a declining United States whom seeing Japan as an unimportant matter. Supporters of completely rewriting the Constitution claim that it would give Japan freedom to make its own choices and become the same as any other normal country, even if it means scrapping the fine words of Article 9 forever renouncing the threat or use of force as a means of settling international disputes.

Moreover, by hearing his speech on February 2015 at the 189th Session of National Diet, we can see that Abe did not say much about his economic reform, but he did say much about the security issues that Japan needs to embrace in the future. In his concern, to protect every Japanese in this globe needs to be done by the one and only way, to reform the Article 9.[4] After that, in mid May 2015, Abe did press conference relating to the decision of his cabinet regarding the “Legislation of Peace and Security” which he delivered strong opinion to the Japanese mass media that revising those laws is very important for Japan. Furthermore, in that time he mentioned that they have decided to revise the Act on Cooperation for United Nations Peacekeeping Operations and Other Operations (PKO Cooperation Act) and newly establish the International Peace Support Law. In doing so, Abe said that they will further broaden the scope of Japan’s international contribution. In addition, the government will amend legislation to enable logistics supports to armed forces of foreign countries including the U.S. Forces which carry out activities for the peace and security of Japan.

Abe Needs to Refocus

Nevertheless, a focus economic reform is what Japan really needs now. The slowing economic growth and the prolonged aged population brought Japan into another level of problem in the economic development. At first Abe seemed so focus with his economic guidance, but yet since the last 2012, he seemed lost his focus on economy and focused more into some high-profiled security issues. At least until this July, he spent most of his time in his reign to deal with the domestic politicians to agree with his agressive proposal on reforming the Article 9, rather than reforming its economic policies. Not saying that security issue is not an important matter for future Japan, but this approach swifted Japan’s national priority from economic into security. While Abe wanted to save Japan from the economic stagnancy, the change of the Article 9 would not affect Japanese economy significantly. The further Abe focused on security issues, the more difficult it gets for him to fix Japanese economic maze.

The aging population of Japan is one of the biggest threat for Japanese development. The ‘constrictive pyramid’ of Japanese population gives the government huge burden of money for the old people, while there is no much productive age to support governments spending on it. This problem became worse when the young Japanese seemed to be more reluctant to marry and have children.[5] At the same time, for the labor market trends in Japan after the bubble economy, that certain aspects of Japanese business practices do not show many signs of changing. For example, the lack of a substantial labour market for skilled, mid-career workers, the closed nature of the markets for suppliers, and the lack of a market for corporate control all reflect special features of the Japanese business system.[6] Regarding to this issue, somehow the Japanese government still have no eagerness to solve this problem that might put Japan under economic crisis in the future decades.

While in the other countries, people tend to protest the government by the lack capability of economic control, Japan nowadays is facing the ‘apolitic’ behaviour of the society. For instance, in this Japanese case, they have no interest in intervening politics while the truth Japan is facing huge economic decline in the past two decades and getting worse in the future. By these facts, and learned from Japan’s history of reformation acts, such reforms can only be achieved successfully by the focus ‘top-down’ approach rather than ‘bottom-up’ approach from the people,[7] Moreover, LDP as one of the dominant party in Japanese politics needs to be focus with the economic reforms because of their strong influence in the parliament.[8] Nevertheless, I believe the huge reform of Japanese economy had to be done firstly by the leader, in which the prime minister is responsible for it. If Abe is still prolonging his conservative view on security and not moving on from that matter, the true nightmare of Japan (declining economy) would not be able to be solved. In my opinion, Abe needs to be back on his last track which means he needs to prioritize his policies for recovering Japanese economy. Sooner or later, Abe will have no more ‘political capital’ to successfully conduct his economic reforms and trapped in his own ambition to bring back Japan into a militarized nation.

[1] Botman, Danninger, & Schiff, 2015, p. 3.

[2] Shinn, 2014.

[3] Weymouth, 2014.

[4] Abe, 2015.

[5] Fisher, 2013.

[6] Nakamura, 2004, p. 238-240

[7] Bailey, Coffey, & Tomlison, 2007, p. 113-115


Abe, S., ‘Policy Speech by Prime Minister Shinzo Abe’, February 12th 2015, Prime Minister and Cabinet Official Website (online), <;, accessed on July 7th 2015

Bailey, D., Coffey, D. & Tomlison, P., (2007) ‘Crisis of Recovery in Japan: State and Industrial Economy’, Edward Elgar Publishing, Inc: Northhampton.

Botman, D. J., Danninger, S., Schiff, J. A., (2015) ‘Can Abenomics Succeed? Overcoming the Legacy of Japan’s Lost Decades’, International Monetary Fund, p. 3.

Fisher, M., ‘Japan’s Sexual Apathy is Endangering the Global Economy’, Washington Post (online),  <;, accessed on July 8th 2015.

Holzhauzen, A., (2008) ‘Can Japan Globalize? Studies on Japan’s Changing Political Economy and the Process of Globalization’, Springer-Verlag: Berlin

Nakamura, M., (2004) ‘Changing Japanese Business, Economy and Society: Globalization of Post-Bubble Japan’, Palgrave Macmillan: New York.

Shinn, J., ‘Optimism is Growing that Abenomics will Succeed in Japan’, Institutional Investor (online), <;, accessed on July 8th 2015.

Tiberghien, Y., (2007) ‘Entrepreneurial States: Reforming Corporate Governance in France, Japan, and Korea’, Cornell University Press: London.

Weymouth, L., (2014), ‘An Interview with Japanese Prime Minister Shinzo Abe’, Washington Post (online),< o-abe/2014/11/07/47c26bc6-6686-11e4-bb14-4cfea1e742d5_story.html>, accessed on July 8th 2015.

[8] Tiberghien, 2007, p. 120-125.


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