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Japanese Premier Urges Speedy Action to Further Aid Economy Japan’s Leader Urges Swift Action to Strengthen Economic Recovery
(42 minutes later)
TOKYO — In his first cabinet meeting since his party’s sweeping election victory over the weekend, Prime Minister Shinzo Abe on Tuesday warned his ministers against triumphalism, instructing them instead to take speedy action to strengthen the recovering economy.TOKYO — In his first cabinet meeting since his party’s sweeping election victory over the weekend, Prime Minister Shinzo Abe on Tuesday warned his ministers against triumphalism, instructing them instead to take speedy action to strengthen the recovering economy.
As cameras flashed, Mr. Abe told his ministers that time was of the essence. Despite the size of Sunday’s victory in upper house elections, he said the public could quickly turn against his Liberal Democratic Party if it failed to deliver on its campaign promises to spread the benefits of the turnaround to more of the population.As cameras flashed, Mr. Abe told his ministers that time was of the essence. Despite the size of Sunday’s victory in upper house elections, he said the public could quickly turn against his Liberal Democratic Party if it failed to deliver on its campaign promises to spread the benefits of the turnaround to more of the population.
“If we get lazy about holding dialogue with the people, or return to being the old Liberal Democrats who shunned reform, then we will immediately lose the trust of the people,” said Mr. Abe, whose party governed Japan for a half-century before being ousted four years ago.“If we get lazy about holding dialogue with the people, or return to being the old Liberal Democrats who shunned reform, then we will immediately lose the trust of the people,” said Mr. Abe, whose party governed Japan for a half-century before being ousted four years ago.
While the appeals for urgency may have been partly for the benefit of television cameras, they also appear to reflect the extent to which Mr. Abe and his party now see themselves as under pressure. Having regained dominance in both chambers of Parliament, Mr. Abe must now prove that he can deliver on deeper reforms that could breathe new life into Japan’s $5 trillion economy.While the appeals for urgency may have been partly for the benefit of television cameras, they also appear to reflect the extent to which Mr. Abe and his party now see themselves as under pressure. Having regained dominance in both chambers of Parliament, Mr. Abe must now prove that he can deliver on deeper reforms that could breathe new life into Japan’s $5 trillion economy.
Mr. Abe had some early successes in stimulating Japan’s economy through new monetary stimulus and currency depreciation, and was rewarded at the polls. But analysts warn that the Liberal Democrats have a narrow window in which to show more lasting progress before voters could lose confidence.Mr. Abe had some early successes in stimulating Japan’s economy through new monetary stimulus and currency depreciation, and was rewarded at the polls. But analysts warn that the Liberal Democrats have a narrow window in which to show more lasting progress before voters could lose confidence.
The public’s patience with prime ministers is limited, and none of the past six, including Mr. Abe in an earlier turn, held the job for more than 15 months.The public’s patience with prime ministers is limited, and none of the past six, including Mr. Abe in an earlier turn, held the job for more than 15 months.
With the next election not legally required to be held for three more years, a loss of public support is not likely to be enough to drive the Liberal Democrats from power. However, analysts said, it could weaken Mr. Abe in other ways, including by making it difficult for the hawkish prime minister to realize some of his noneconomic goals, like his long-expressed desire to revise Japan’s pacifist Constitution to allow a full-fledged military instead of its current defense forces.With the next election not legally required to be held for three more years, a loss of public support is not likely to be enough to drive the Liberal Democrats from power. However, analysts said, it could weaken Mr. Abe in other ways, including by making it difficult for the hawkish prime minister to realize some of his noneconomic goals, like his long-expressed desire to revise Japan’s pacifist Constitution to allow a full-fledged military instead of its current defense forces.
By law, changing the Constitution would require approval by a majority of voters in a referendum.By law, changing the Constitution would require approval by a majority of voters in a referendum.
“Abe gets it,” said Gerald L. Curtis, a specialist on Japanese politics at Columbia University. “He knows the success of Abenomics is the key to the success of everything else he wants to do.”“Abe gets it,” said Gerald L. Curtis, a specialist on Japanese politics at Columbia University. “He knows the success of Abenomics is the key to the success of everything else he wants to do.”
According to analysts, Mr. Abe’s most pressing task will be building on the early successes of what has been called a three-arrowed economic program, which have prompted a rally in the stock market.According to analysts, Mr. Abe’s most pressing task will be building on the early successes of what has been called a three-arrowed economic program, which have prompted a rally in the stock market.
The first two arrows of radical easing by the central bank and increased government spending gave the anemic economy a quick shot in the arm, mainly by driving down the yen, which benefited electronics companies and other exporters by making their products less expensive abroad.The first two arrows of radical easing by the central bank and increased government spending gave the anemic economy a quick shot in the arm, mainly by driving down the yen, which benefited electronics companies and other exporters by making their products less expensive abroad.
All eyes are now on whether Mr. Abe can follow up with a third arrow of structural changes that can make the current tentative recovery more sustained. Those consist mainly of deregulating protected markets and freeing up competition to allow the creation of new industries and growth. One hope is that this will spread the benefits of his plan more broadly by driving up wages, reversing years of declines.All eyes are now on whether Mr. Abe can follow up with a third arrow of structural changes that can make the current tentative recovery more sustained. Those consist mainly of deregulating protected markets and freeing up competition to allow the creation of new industries and growth. One hope is that this will spread the benefits of his plan more broadly by driving up wages, reversing years of declines.
One problem is that Mr. Abe has remained vague on what that third arrow may look like, and he has revealed few additional details since the election. On Monday, he promised tax incentives to encourage companies to increase investment in new factories and machinery, in hopes of persuading manufacturers to stay in Japan instead of relocating to lower-wage countries. He also promised to institute a national growth strategy during a session of Parliament to start in October.One problem is that Mr. Abe has remained vague on what that third arrow may look like, and he has revealed few additional details since the election. On Monday, he promised tax incentives to encourage companies to increase investment in new factories and machinery, in hopes of persuading manufacturers to stay in Japan instead of relocating to lower-wage countries. He also promised to institute a national growth strategy during a session of Parliament to start in October.
“What the people want,” said Mr. Abe, 58, “is an economy whose strength can be felt in all corners of the nation.”“What the people want,” said Mr. Abe, 58, “is an economy whose strength can be felt in all corners of the nation.”
While expectations are high among financial investors and economists that Mr. Abe may soon unveil additional market-opening moves, some analysts say it is not clear how much more he will actually offer.While expectations are high among financial investors and economists that Mr. Abe may soon unveil additional market-opening moves, some analysts say it is not clear how much more he will actually offer.
Unlike his mentor, former Prime Minister Junichiro Koizumi, who won over voters in the early 2000s with his mantra of small government and deregulation, Mr. Abe has yet to express a clear economic philosophy. Nor does he have the same charisma as Mr. Koizumi, who was able to inspire optimism simply by being able to connect emotionally with voters, analysts say.Unlike his mentor, former Prime Minister Junichiro Koizumi, who won over voters in the early 2000s with his mantra of small government and deregulation, Mr. Abe has yet to express a clear economic philosophy. Nor does he have the same charisma as Mr. Koizumi, who was able to inspire optimism simply by being able to connect emotionally with voters, analysts say.
“Prime Minister Abe is not the performer or communicator that Koizumi was,” said Takeshi Sasaki, a professor emeritus in political science at the University of Tokyo. “I don’t know if he really has it in him to inspire the nation like that.”“Prime Minister Abe is not the performer or communicator that Koizumi was,” said Takeshi Sasaki, a professor emeritus in political science at the University of Tokyo. “I don’t know if he really has it in him to inspire the nation like that.”