Chinese philosopher and military strategist Sun Tzu wrote, “The supreme art of war is to subdue the enemy without fighting.” With a majority in Parliament, Japanese Prime Minister Shinzo Abe likely won’t have to do much fighting in the Diet, as his adversaries are powerless.
In September, the prime minister called a snap election that was to be held on October 22. Despite what some of his critics might say about his sudden announcement, Abe succeeded in retaining a majority of the seats. But his fourth term could transform the country forever.
His fourth term will be dominated by three critical issues: constitutional reform, a magniloquent and petulant Kim Jung-un, and a fiscal mess. Will Abe handle these matters? Time will tell.
On the campaign trail, the prime minister pushed for constitutional reforms, which many analysts conceded would be nearly impossible without a massive number of seats. As the ruling bloc, Abe has a two-thirds majority – 312 out of 465 Parliament seats – and will only need some of the opposition to successfully change the constitution.
He wants to amend Article 9 of the constitution and to insert an additional provision to clarify the legal status of the nation’s Self-Defence Forces (SDF). Abe and his Liberal Democrats aver that present wording in the constitution could create confusion if a crisis should unfold. He wants it defined correctly.
The SDF is one of the most advanced military forces in the world today. However, as per Article 9 of the Japanese constitution, the nation’s army cannot be deployed to fight in overseas combat and international disputes. The source of the “pacifist clause” has been debated for years: Allied Supreme Commander Douglas MacArthur said it was proposed by Prime Minister Kijūrō Shidehara, while academics claim MacArthur made the suggestion himself.
Although Abe has secured a large majority, a constitutional change would require a referendum. The latest polls suggest that most Japanese citizens oppose the prime minister’s proposal. Nevertheless, Abe wants a new constitution by 2020, the year Japan hosts the Olympic Games.
Following his victory, Abe told the press:
“We won a two-thirds majority as the ruling bloc, but it is necessary to strive to form a wide-ranging agreement among the ruling bloc and opposition (to revise the constitution).
And then we aim to win the understanding of the people, so that we can gain a majority in a referendum.”
Constitutional Democratic Party of Japan (CDPJ) is the biggest and most arduous foe to Abe’s aims. Critics argue that it is the first step towards re-militarisation and risks placing Japan in unnecessary foreign entanglements.
Abe’s North Korea Problem
Japan has been the target of aggression by North Korea. Kim Jong-un has talked tough against the government and ordered the firing of missiles over the Japanese island of Hokkaido. Indeed, his presence is a daily threat to the economic powerhouse.
Speaking at a press conference in Tokyo on Sunday, the prime minister promised “counter-measures” and “strong diplomacy” against North Korea.
Short on details, Abe noted that his actions would exert “stronger pressure” on North Korea. He added that he would outline his plans with President Donald Trump next month.
Abe told reporters:
“I will pursue decisive and strong diplomacy to tackle North Korea’s missile, nuclear and abduction issues and put further pressure to get it to change its policy.
I will make sure the Japanese public is safe, and safeguard our nation.”
The Rise and Fall of Abenomics
The Japanese head of state is trying to salvage what is left of Abenomics in his fourth term in office. Since the global economic collapse, Abe has kept Japan the world’s third-largest economic power on an easy-money addiction with a loose monetary policy, a weak yen, and a crippling debt load. And it is unlikely that the prime minister will wean the nation away from these Keynesian compulsions.
There have been some hiccups in Japan’s stock market, but this has been one of the prime minister’s bright spots during his tenure.
In the wake of Sunday’s election, Japanese stocks hit their highest levels since 1996. The Nikkei jumped about 1% on Monday, expanding its winning streak to 15 sessions. The yen also tumbled to a three-year low against the U.S. dollar, boosting shares of Japanese exporters. A weaker yen is good for exporting businesses because it makes their goods cheaper to overseas consumers.
Over the last five years, the prime minister has embraced an easy-money orthodoxy, otherwise known as Abenomics. And it seems like the mega-money printing scheme will continue.
In the era of Abenomics, the Bank of Japan (BOJ) has instituted subzero interest rates, became the top shareholder in the Nikkei 225 Stock Average and exponentially expanded the money supply.
The government hasn’t fared any better. In 2013, the national debt surpassed one quadrillion yen (1,008,628,100,000,000 yen), which represents 230% of the gross domestic product (GDP). The cost to service this mounting debt bomb imbibes more than half of the country’s tax revenues each year, something that encouraged Moody’s to cut its long-term sovereign debt rating from Aa3 to Aa2.
To maintain the status quo and avoid fiscal disaster, Japan has considered issuing 50-year bonds – it currently offers a 40-year bond. If approved, Japan would join several other nations, including Ireland, Argentina, and Belgium, in selling ultra-long bonds on the open market.
Abe has also embraced big government ideas, like mandating higher wages, raising taxes, and running incredible budget deficits – policies approved by both Keynesians and their Abenomics cousins.
A Ruling Unpopular Prime Minister
Prime Minister Abe hasn’t exactly been the most popular leader in Japanese history. Though his approval ratings have experienced an uptick in recent weeks stemming from the North Korea crisis, Abe is distrusted by his party’s base. Whether it is the scandals that have plagued his administration or his objective to transform his military’s mandates, the voting public is cynical of Abe.
Sun Tzu noted that “all warfare is based on deception.” In order to win the hearts and minds of the public should a referendum take place, Abe may need to employ deceptive methods. As a politician, he will inevitably survive and thrive in this arena.
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