By Michael J. Green & Nicholas Szechenyi —
On July 10, Japan’s ruling coalition won a comfortable victory in elections for the Upper House of the Diet (parliament), solidifying Prime Minister Shinzo Abe’s political power as he seeks to implement a policy agenda centered on economic revitalization and defense policy reform. Polls ahead of the election showed voters were most concerned about the economy, but the large margin of victory has invited speculation that he could focus on other priorities such as revising the constitution when parliamentary debate resumes this fall. Abe indicated during postelection interviews that constitutional revision would be discussed in relevant Diet committees but vowed to redouble his efforts to boost the economy and meet public expectations for growth.
Q1: What were the key themes in the election?
A1: The election was mainly a referendum on Abe’s economic policy, dubbed “Abenomics” and composed of monetary easing, fiscal stimulus, and structural reform. Abe has pledged to fight deflation since he began his second stint as prime minister in December 2012, but an aggressive monetary easing policy thus far has fallen short of inflation targets. Growth has emerged in fits and starts despite record-setting national budgets and several rounds of fiscal stimulus, much to the dismay of fiscal hawks concerned about public debt, which is approximately 240 percent of GDP. Japan’s economy grew at an annualized 1.9 percent in the first quarter of 2016, but Abe recently postponed the second stage of a consumption tax increase for fear of a potential downturn. The structural reform agenda was unveiled in stages over the past three years and features numerous initiatives, including trade liberalization, corporate governance, and women’s empowerment, which have not provided a jolt but could support a path to sustainable growth over time. Opposition parties led by the Democratic Party (DP) dubbed Abenomics a failure and criticized Abe’s emphasis on fiscal stimulus instead of social welfare to narrow the economic divide. They also took issue with defense reform legislation passed last fall that expands the operational parameters for Japan’s Self-Defense Forces, including collective self-defense, or the ability to come to the aid of allies under attack. Some also suggested that Abe would move quickly to revise the war-renouncing clause of the constitution and abandon Japan’s pacifist principles, but these scare tactics did not weaken the ruling coalition’s control of the chamber.
Q2: To what degree has Abe consolidated his political power?
A2: Abe’s Liberal Democratic Party (LDP) fell just short of securing a majority in the Upper House on its own but together with the Komeito Party retains a comfortable majority. The ruling coalition already has a two-thirds majority in the more powerful Lower House and can override any opposition from the Upper House. The outcome of this election therefore simply reaffirmed Abe’s control of the legislature, and the polls won’t reopen for some time. The next election for the Upper House isn’t until 2019, and a Lower House poll need not be held until 2018. Abe also does not face a challenge from within the LDP; he is in his second term as party president, which expires in 2018, but the party could change the rules mandating a maximum of two terms to extend his tenure. Abe also benefits from a weak opposition. The DP, a disparate group that ruled for the first time from 2009 to 2012, but lost the confidence of the public in the aftermath of the 2011 Great East Japan Earthquake, partnered with smaller opposition groups including the Communist Party in a desperate attempt to thwart Abe’s agenda but did not mount a serious threat. All of these factors point to sustained leadership under Abe, though under the watchful eye of voters concerned fundamentally about economic growth.
Q3: Will Abe remain focused on economic issues?
A3: Abe vowed to press forth with his growth strategy and is expected to introduce a $90 billion supplementary budget this fall to provide economic stimulus. He could also move to ratify the Trans-Pacific Partnership (TPP) trade agreement, reviled by the agricultural sector (a core LDP constituency) but touted by Abe as a means to strengthen Japan’s economic competitiveness and leadership on regional economic issues with the United States and other like-minded countries. There is a good deal of speculation that Abe could take this latest electoral victory and pivot away from the economy to other issues such as revising the constitution, which requires two-thirds support in both houses of the Diet and majority support in a public referendum. Abe’s ruling coalition can surpass the two-thirds threshold in the Upper House together with smaller center-right parties, but he most likely will not expend political capital on the constitutional debate at the expense of economic policy. Abe was criticized for expounding on the constitution and paying little heed to economic matters during his first term as prime minister in 2006–2007. Moreover, he understands that economic power is fundamental to Japan’s capacity to expand its leadership role in security affairs, another one of his priorities, and that necessitates a sustained commitment to the growth strategy. There will be room for the constitutional debate to be sure, but it will not be the only issue on the docket.
Q4: Are there strategic implications for the United States?
A4: The U.S.-Japan alliance is a cornerstone of Japanese foreign policy, and Abe has focused intently on strengthening bilateral economic and security ties. He entered the TPP negotiations and pursued defense policy reforms and new bilateral defense guidelines with the United States to bolster the security alliance, and he also has championed global rules and norms as chair of the G7. Abe is advancing an agenda that supports U.S. interests, and political stability in Japan, prolonged as a result of this election, favors sustained strategic alignment between the two countries.
Dr. Michael J. Green is senior vice president for Asia and Japan Chair at CSIS and chair in modern and contemporary Japanese politics and foreign policy at Georgetown University. Mr. Nicholas Szechenyi is a senior fellow and deputy director of the CSIS Japan Chair. This post first appeared as a CSIS Critical Questions here.
Dr. Michael Green is senior vice president for Asia and Japan Chair at CSIS. He is also an associate professor of international relations and director for Asian studies at Georgetown University.