Abe's Juggernaut

 

Ever since Franklin D. Roosevelt began his presidency in 1933 with an unprecedented burst of legislation and other government initiatives to try to stem the tide of the Great Depression, the “first hundred days” has been the benchmark for judging every new administration. Few if any have lived up to that demanding standard.

Japan’s Prime Minister Shinzo Abe is an entirely different kind of politician from the American model, facing an entirely different situation. Yet the start of his new government, which won a landslide majority in mid-December, has the much the same feel of the first frenzied 100 days, a benchmark that it passed on April 4.

In those 100 days Abe has not made one misstep. No cabinet member has resigned for making a gaffe or for even a minor scandal. It is about this time that the cabinet’s approval ratings begin to start the long decline into the teens leading to the boss’s resignation. The Abe cabinet’s ratings are actually climbing – 65 percent approval in the Asahi poll; 72 percent in the Yomiuri. It all seems very un-Japanese.

Abe knows the drill from personal experience, as he was the first of the recent spate of one-year prime ministers, serving from September, 2006, until he resigned in September 2007. At the time of his resignation, he was suffering from deep disapproval ratings, which translated into a major defeat for his Liberal Democratic Party (LDP) in that year’s House of Councillors election.

So it was a surprise when his party decided to give him a second chance, and it is evident that he used his several years in the political wilderness to reflect both on his own mistakes as premier but also, as an opposition member of parliament, the mistakes made by the predecessor government. He is said to carry around a booklet with notes on his mistakes as a reminder.

Of course, his government’s most far-reaching100-days initiative was his plan to bring the Japanese economy out of the doldrums, dubbed “Abenomics” even before the new government took office. He pushed for the early resignation of the Governor of the Bank of Japan and had installed his own nominee, Haruhiko Kuroda to head the central bank.

Kuroda has lost no time seeking to implement Abe’s inflationary monetary policy through aggressive buying of government bonds, essentially doubling its holdings in two years and doubling the amount of money in circulation. “This is monetary easing in an entirely new dimension,” Kuroda said at a press conference after announcing the bank’s decision on April 4. The bank is aiming for a 2 percent rate of inflation.

These plans of course, are not without critics, who wonder whether the injection of this much money into the economy will spark a corresponding increase in demand, leading to higher growth and more jobs. True or not, the decision feels like – indeed, it is – bold action, which sits well with the population used to the more timorous efforts of previous governments.

The concern over increasing demand is one reason for the second pillar of Abenomics, namely .more spending on public works and structural reformation. Neither h as really got rolling as yet, leaving some to worry whether the government is placing too much attention on monetary policy, to the exclusion of other tools. The spending is said to have opposition in the Ministry of Finance, which wants to return to deficit reduction as soon as possible..

Success depends a lot on bending the civil service to the will of the politicians. Ending “bureaucrat-led politics” was a main theme of the previous government, but it went about it in a clumsy way that alienated key civil servants needed to implement its programs. The Abe government has shown more finesse in managing the bureaucracy, partly by co-opting important bureaucrats into policy making.

Structural reform seems is more distant. The last real effort to reform the bureaucracy was former premier Junichiro Koizumi’s plan to privatize the postal service, a plan that died on the vine. There is, however,  a good chance for major restructuring of the electric power system, breaking the monopolies that Japan’s ten utilities have over individual rate payers.

Such a reform, recently endorsed by the cabinet, has momentum because of the unpopular rate hikes that utilities need to cover the costs of importing fossil fuels to replace the power from the 48 nuclear reactors that are shut down. More money is needed to comply with stricter safety measures to be promulgated this summer so that some of the plants can return on line.

Nor has Abe neglected foreign policy. His administration kicked off with an unprecedented diplomatic blitz that took high-level LDP leaders, including Abe himself, to visit half a dozen Asian countries. Abe has maintained the pace by visiting the United States, Mongolia, and soon a trip to Moscow.

It is widely predicted that he and President Vladimir Puten will reach an agreement resolving the long-standing territorial dispute over the southern Kuril islands, known to Japan as the “Northern Territories.” The proposal on the table would essentially divide the four disputed islands between the two countries.

If Abe is able to come back with such an agreement, it would be a triumph and a major boost for his party in the run-up to the July election for half of the House of Coincillors, the upper house of Japan’s bicameral parliament. Considering that Abe resigned his first government after a poor showing in the 2007 election, any major success this time would certainly be sweet. “I cannot die without winning,” Abe has said.

One of the lessons Abe learned from his first tour as PM, was to put domestic, economic issues ahead of his conservative hobby horses, such as amending the American-written constitution and watering down its pacifistic provisions. He has shown considerable self-restraint during the first 100 days from pushing these ideological issues, but he had not abandoned them.

Once the upper house election is out of the way, he may pivot back to these issues feeling that having satisfied the public’s main economic concerns with his initial initiatives, that the public will give him some slack when it comes to his more ideological priorities.