Japan - Shinzo Abe’s Legacy

Wall Street Journal

OPINION

REVIEW & OUTLOOK

Shinzo Abe’s Legacy

Japan’s longest-serving leader tried to make his country more normal.

By the Editorial Board

August 28, 2020

Japanese Prime Minister Shinzo Abe said Friday he’s resigning for health reasons, and it’s his country’s loss. His intentions were right even if he often struggled to overcome entrenched opposition to the reforms he knows Japan needs.

Mr. Abe leaves office as the country’s longest-serving prime minister, having entered the post (for the second time) in 2012. His first turn in the top job, in 2006-2007, was cut short by the same ulcerative colitis that’s prompting him to depart now. Mr. Abe’s eight years in office were characterized by his multifront campaign to turn Japan into a more normal country.

His agenda isn’t often described in those terms, but it fits. Domestically, “Abenomics” was an attempt to shake Japan out of the no-growth torpor into which it had fallen after the economic bubble collapse of the 1990s. His goal has been to turn the world’s third-largest economy into a normal, functioning market again.

Following the model of former Prime Minister Junichiro Koizumi, Mr. Abe refused to accept stagnation. Freed of the burden of the banking crisis Mr. Koizumi inherited, Mr. Abe set about firing his “three arrows” of fiscal and monetary expansion and policy reforms.

Alas only the first two took flight against the headwinds of Japan’s sclerotic politics. Mr. Abe notched some important wins, such as a corporate-governance overhaul that has stimulated activist investing and pushed Japan Inc. to untangle complex, poorly managed conglomerates. He also took steps to allow more immigration, long a taboo in Japan.

But other tax and regulatory reforms remain undone. His agenda was hobbled by two consumption-tax increases he found himself politically unable to resist, and each of which set back growth. Mr. Abe’s main economic legacy will be the extraordinary easy-money policies unleashed by his handpicked Bank of Japan governor, Haruhiko Kuroda.

Normalization also became Mr. Abe’s theme on foreign policy. The challenge has been to persuade the Japanese public to accept greater regional responsibility in military matters despite the country’s history. Here again Mr. Abe missed his major goal when he was unable to amend the constitution to remove an explicit commitment to pacifism.

But he invested to boost capabilities for the country’s Self-Defense Force, and he spent political capital in deepening Japan’s alliances with its neighbors and allies such as the United States and Australia. His early outreach to President Trump—an avowed protectionist and longtime skeptic of trade with Japan—was wise and led to a positive relationship. Mr. Trump missed a chance to repay the favor when he withdrew the U.S. from the Trans-Pacific Partnership trade deal that Mr. Abe had counted on to force domestic reform.

Despite some diplomatic missteps such as his handling of the dispute with South Korea over wartime abuse of Korean women, Mr. Abe’s diplomacy and commitment to the military will stand Japan in good stead as China continues its regional expansionism.

Japan’s ruling Liberal Democratic Party will select Mr. Abe’s successor. Plenty of work remains to be done to reinvigorate Japan’s economy and prepare the country and its voters to play a more active role in world affairs. Mr. Abe leaves a foundation on which that successor can build.

Appeared in the August 29, 2020, print edition.