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Shinzo Abe, Japan’s longest-serving prime minister, resigns due to ulcerative colitis. It leaves behind a Japan that is economically stronger and socially more liberal than the one it inherited.
When Shinzo Abe took over the leadership of Japan in late 2012, he was extremely skeptical. After a short and unimpressive term in office in the mid-2000s, it seemed unlikely that Abe would rise to the challenge of Japan’s faltering economy and inequality. And the fact that it emerged from a right-wing political bloc seemed to presage a less liberal Japan.
But Abe quickly defied the skeptics. He quickly gathered a group of capable advisers around him, including economics professor Koichi Hamada, Bank of Japan Governor Haruhiko Kuroda, political ally Yoshihide Suga, and his own wife, Akie Abe. As a result of his wise advice, Abe’s second term in office was nothing like the cautious conservatism that characterizes most governments of the Liberal Democratic Party of Japan, which he has long ruled.
First, Abe succeeded in reviving Japan’s economy. At the Bank of Japan, Kuroda embarked on the most daring quantitative easing program in the world, buying even a significant portion of the country’s stock market. Although this did not drive inflation to the 2% target level, it did lift Japan out of deflation and appears to have stimulated both consumption and (eventually) business investment. Despite a severely aging society and the aftermath of a devastating tsunami and nuclear accident in 2011, Japan enjoyed the longest uninterrupted period of economic growth since the 1980s.
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Monetary easing was just an arrow in Abenomics’ quiver, as Abe’s program was called. The second, the fiscal stimulus, was more difficult to implement. Concerns about the sustainability of the country’s debt led Abe to implement multiple increases in excise taxes, which likely slowed growth. Hit by conflicting economic and political pressures, the Abe administration was forced to chart a middle path in fiscal policy, which was ultimately not a major factor in Japan’s recovery.
Abenomics’ third arrow was a broad program of structural reform. Although Abe’s detractors scoffed at the lack of quick results and some reforms were hampered by political opposition, overall this program laid the foundation for Japan’s long-term economic health. Abe took on Japan’s most sclerotic sector, the politically powerful agricultural industry, and scored important victories, fostering competition and lowering barriers to food imports. That will ultimately result in more efficient and productive farms and greater food security for the island nation.
Japanese Prime Minister Shinzo Abe removes his mask while speaking to reporters at the prime minister’s official residence in Tokyo. Photo: PTI
Abe also became a general champion of trade deals and globalism, even as the United States plunged into sullen protectionism under Donald Trump. It concluded a major trade deal with the European Union and kept the Trans-Pacific Partnership alive after the reckless withdrawal of the United States.
At home, Abe tried to reform Japan’s inflexible and unproductive corporate culture. His administration created a new corporate governance code and an investor management code, aimed at increasing shareholder control and profitability and diminishing the power of traditional and aging managers. A 2018 review attempted to unravel cross-corporate holdings, a traditional Japanese practice that encourages productive companies to support unproductive ones.
Both anecdotes and government data suggest that companies are following the new codes, and corporate profits have risen, boosting tax revenue. Japan is also developing a strong private equity industry, which will help consolidate a family business sector that suffers from a lack of heirs. Hopefully, it will also propel companies toward a more productivity-focused culture. Abe has also tried to reduce the punishing and unproductive overtime that many Japanese companies force workers to put up with.
But Abe’s biggest economic reform has been expanding Japan’s workforce, through gender equality and immigration, two things his conservative party had long resisted. Abe urged companies to increase hiring of women, provided federally funded daycare centers, encouraged more men to take paternity leave, and used preferential government hiring to reward companies that hired women. Japanese women’s employment, which stalled in the 1990s, accelerated during Abe’s tenure:
Abe also opened his homogeneous country to immigration in an unprecedented way, creating a new guest worker law that offered a path to permanent residence, as well as a new fast track for skilled immigrants. The result was an increase in foreign workers:
Japanese Prime Minister Shinzo Abe wearing a protective mask attends a plenary session in the upper house of parliament in Tokyo
The rise of gender equality and immigration, although due to economic reasons, is transforming Japanese society. Now firmly established in the world of work, women are more vocal about defying sexual harassment, demanding promotions and insisting that men take more care of children at home. Meanwhile, Japan is becoming a more diverse society, with one in eight young people in the capital city born in a foreign country. Many languages can be heard on the street thanks to an unprecedented tourist boom, and the nation is welcoming more mixed-race celebrities.
Abe did not simply preside over this liberalization and opening up of Japanese society; he actively encouraged him, often in the face of fierce opposition from right-wing forces that many feared would be his base of support. When a hate group emerged early in Abe’s term to threaten and harass the country’s Korean ethnic minority, Abe openly criticized the racists and passed the nation’s first law against hate speech, which was later used to prosecute. to group members.
So while Abe resurrected Japan’s economy and laid the foundation for future economic strength, his greatest achievement was starting the transformation of a nation that many observers had concluded would never be allowed to change. Now it is possible to glimpse the future of a very different Japan: a liberal, dynamic and open society that is progressive in both economic and cultural terms.
At a time when many world leaders are retreating into nationalism, protectionism, racism and authoritarianism, Abe defied expectations and became a champion of the notion of liberalism. Leave a legacy that future Japanese leaders will fight to match. But for the sake of your country’s continued strength, dynamism, and prosperity, you must try.
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