On Sunday, Japan held a snap-election of the lower house of its national legislature. Prime Minister Shinzo Abe’s ruling Liberal Democratic Party (LDP) and its coalition partner the Komeito retained their super-majority of seats, or 326 seats out of 475 total seats.
The election was called by Prime Minister Abe shortly after an announcement that Japan has gone into recession in the third quarter of this year, possibly caused by a sales tax raise. Abe has called this election a resounding approval for his “Abenomics” economic policies, which includes large economic stimulus, infrastructure spending, and more assertive foreign policies.
However, commentators point out that the record low 52% voter turnout means that the results cannot be directly interpreted as broad public support for Abe and his policies. According to the Washington Post, even among voters who did vote for Abe’s party, many said they didn’t have much of an alternative.
After going through what was considered an economic bubble of the 1980s and 90s, Japan has undergone the so-called “lost decades,” during which the economy grew at a much slower pace. Since Shinzo Abe became Prime Minister in 2012, his aggressive economic stimulus have gotten much attention as a way to finally set Japan in a different direction.
In addition, Abenomics also promises “structural reforms,” which has not played a prominent role but analysts say will begin to be rolled out after the elections. These structural reforms may include legal changes to make starting businesses easier, changes to the tax code, and further reforms of the pension system.
Wall Street Journal Japan correspondent Jacob M. Schlesinger wrote on December 3rd that Japan faces a dilemma, of whether to settle for a comfortable decline, or go through a painful revival. He writes that in deflationary Japan, an aging population means a stagnant economy, and economic policies should be to minimize risk and make that inevitable decline as smooth as possible.
However, a painful recovery under policies such as Abenomics may very well stimulate the economy to grow–but so far, aside from “soaring profits for Japan’s multinationals and soaring stock prices for the relatively small stockholder class,” disparities between the wealthy and the poor have widened.
In terms of foreign policy, analysts expect Japan to continue its proactive stance. This summer, Abe’s cabinet had reinterpreted the self-defense clause of its constitution to give Japan more rights to act militarily than before.
Abe may also now have the mandate to finish negotiations with the United States on the Trans-Pacific Partnership, a trade bloc that Taiwan is interested in joining. Japan has also been active in courting Central Asian nations, India, and Australia.
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