Forecasting Futures: Japan after Abe – Life, Death, and Legacy
London Politica does not take a specific policy position for this project. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the individual authors.
On September 27th 2022, the Japanese public and the international community commemorated the life and death of former Prime Minister Shinzo Abe, following his assassination on July 8th. Abe’s time as leader and shocking death leaves behind a legacy significant to Japan’s future. London Politica analysts have produced a series of articles forecasting the potential political, social, and economic ramifications facing Japan in the wake of their former leader’s death.
Contents:
The Legacy and Impact of ‘Abenomics’ for Japan Going Forward - Jayme Teoh
Abe’s Indo-Pacific Vision & Foreign Policy Legacy - Billy Buddell
Abe’s Death and Japan-South Korea Relations: Red Light or Green Light - Sebastian Kim
Shinzo Abe and Taiwan: Past, Present—and Future?—of Japanese-Taiwanese Relations - Albert Cullel Cano
The Legacy and Impact of ‘Abenomics’ for Japan Going Forward
By Jayme Teoh
Few world leaders will leave a legacy like Shinzo Abe. As the longest-serving prime minister in Japan, his administration pursued an ambitious economic and domestic reform program, all whilst redefining the country’s status in geopolitical affairs. Following his assassination on July 8, 2022, he will perhaps be most remembered for “Abenomics,” a controversial economic agenda that has arguably helped to revive the Japanese economy. However, the extent of this success is still hotly debated and according to many, has seen mixed success at most. This year alone has seen the weakest Yen in decades, a mounting Japanese national debt, and the Bank of Japan holding over half of the share of Japanese government bonds. The legacy of Abenomics will continue to cause ripple effects in Japan’s economy long after the life of Shinzo Abe.
Context for Abenomics
The term “Lost Decade” refers to the period of economic stagnation in Japan caused by the asset price bubble’s collapse in late 1991 through the ‘90s. However, the consequences of this economic collapse had longer-term effects. From 1991 to 2003, the Japanese economy grew by a mere 1.14% annually in GDP, while average real growth rate between 2000 to 2010 was about 1%. The negative economic effects were further compounded by rising debt levels as a result of the 2008 Global Financial Crisis, as well as other natural disasters such as the 2011 Fukushima Nuclear Disaster and the Tohoku Earthquake. More recently, the effects of the COVID-19 pandemic and the Russia-Ukraine war has further exacerbated Japan’s already struggling economy.
Shinzo Abe took office as prime minister of Japan for the second time after his first tenure in 2006-7, in December 2012 and subsequently pursued a set of economic policies dubbed “Abenomics,” which pulled the nation out of long-term deflation and mounting national debt. His administration’s economic program consisted of three arrows:
(1) Expansionary Monetary policy
The Bank of Japan’s (BOJ) unprecedented asset purchase program was the foundation of Abenomics, in which the central bank simultaneously injected liquidity into the economy through quantitative easing while pushing some interest rates into negative territory.
(2) Expansionary Fiscal Policy
Beginning in 2013, the Abe administration launched a fiscal stimulus with economic recovery measures totalling 20.2 trillion yen (USD$210 billion), of which 10.3 trillion (USD$116 billion) was direct government spending. The stimulus emphasised building critical infrastructure projects such as bridges, tunnels, and earthquake-resistant roads. This was followed by an additional 5.5 trillion yen boost in April 2014 and another spending package worth 3.5 trillion yen at the end of the year.
Some of these reforms include slashing certain business regulations, liberalising the labour market and agricultural sector, cutting corporate taxes, and bringing more women into the workforce in order to revive Japan’s competitiveness. It also increased protections for temporary workers and eased the rules that affected migrant workers the most.
Impact of Abenomics
The immediate effects of Abenomics on the Japanese economy were apparent. By February 2013, the policies implemented led to a dramatic weakening of the Japanese yen and a 22% rise in the Tokyo Stock Price Index. Additionally, the unemployment rate in Japan fell from 4% in the last quarter of 2012 to 3.7% in the first quarter of 2013. By May 2013, the stock market rose by 55%, consumer spending had pushed first quarter economic growth up by 3.5%, and Abe’s approval rating was at a record 70%. While the majority of the Japanese public praised Abe’s policies for alleviating Japan from a prolonged recession, many Japanese people were still dissatisfied with its impact on wages and consumption. A Kyudo News poll in January 2014 found that 73% of Japanese respondents did not personally notice the effects of Abenomics, only 28% expected a wage increase and nearly 70% were considering cutting back spending as a result of the increase in the consumption tax.
In general, Abenomics was seen as effective in generating inflationary expectations in the market and in reducing real interest rate. By managing aggregate demand in the economy, unemployment rate slowly declined, and inflation rates rose towards the desired target set by the administration. Additionally, the stock market responded fairly strongly to improvements in the economy. However, in terms of growth performance, Abe’s program did not fare as well. Especially under a weaker Yen, Abenomics increased the cost of various imports, including food, oil and other natural resources on which Japan is highly reliant.
Assessing Abenomics
The success of Abenomics is still highly contested. Josh Lipsky, director of the global business and economics program at the Atlantic Council think tank, cites that “the track record of Abenomics is mixed at best.” He further elaborated that while Japan did grow under Abenomics, some policy goals were not achieved. On one hand, analysts suggest that Abenomics has been at least “moderately effective in plugging the fiscal hole,” with significant increases in value-added tax and consistent decline in government spending to help manage the country’s budget deficit. Reducing unemployment rates and improving stock markets were some of the notable achievements of the program.
On the other hand, critics argue that Abenomics brought about major risk. While some believe quantitative easing can spur hyperinflation, others are skeptical of the actual effects that Abe’s plan can do to reverse Japan’s deeply entrenched inflation. Scholars have observed that the real effects of Abenomics have been modest at best. Critics have also asserted that while the first two arrows of the program produced some result, Abe failed to balance these large reforms with the third arrow of structural reform. Economist Daniel Lacelle states that Japan tried “to disguise structural problems with high levels of debt and high levels of government spending,” suggesting that the negligence of structural reforms made the overall economy even more vulnerable. Additionally, Abe’s ambitious target of boosting nominal GDP to 600 trillion yen by 2020 never materialised and remains unmet to this day.
Legacy post-Abe
Abenomics was supposed to be the cure that would revitalise the Japanese economy. However, nine years and multiple prime ministers later, growth remains sluggish while the wealth disparity has risen. Following growing public outrage over wealth inequality, newly elected Prime Minister Fumio Kishida has laid out a populist economic policy that aims to bolster potential growth sectors and prod companies into raising long-stagnant wage levels. Kishida has pledged to move the country away from the Abenomics program and focus on narrowing the gap between the rich and the poor. However, the Liberal Democratic Party (LDP) and Abe’s influence over the faction was still considerable after Abe stepped down as prime minister in 2020. This has limited Kishida’s ability to implement large economic reforms, with many of his predecessor’s economic policies still in place. While Abe’s death makes any immediate challenge to his legacy highly unlikely, it could eventually allow Kishida’s administration to phase out Abe’s policies. People close to Kishida have stated that the prime minister and his aides intend to move toward normalising fiscal and monetary policies while gradually whittling down the Abenomics program’s policies. As a means of political branding, Abenomics has been immensely successful. Even after Abe’s death, the image of Abenomics as a path towards revival still strikes a chord with many Japanese people. Whether or not Kishida’s administration will meet further challenges to overturn parts of Abe’s policies that have failed remains uncertain.
Abe’s Indo-Pacific Vision & Foreign Policy Legacy
By Billy Buddell
The death of the nation’s longest-serving Prime Minister has shocked Japan - as well as the international and foreign policy community - to its core. His assassination is felt as a violent anachronism, in a country that has not seen an act of aggression like this towards such a high-ranking official for 60 years. The contentious decision to grant Shinzo Abe a state funeral, previously reserved just once for a PM, places him in the company of Japan’s former emperors. The Grandson of Nobusuke Kishi, a previous PM, Abe himself belongs to his own dynasty of Japanese politics. Despite public outcry against this decision as underserved, it is difficult to argue with the remarkable stature of the political legacy left behind by Abe.
While much attention is rightly given to Abe’s namesake economic policy, ‘Abenomics’, his impact on the international stage is of arguably equal importance. Abe proved to be one of the most dynamic and proactive Japanese politicians in contemporary foreign policy. During his second of two terms as PM (2012-2020), he visited a record 80 countries for a Japanese leader. Notably, he was the first foreign leader to visit then-president Donald Trump, had more in-person meetings with Vladimir Putin than any other world leader, and was able to conduct an in-person meeting with Xi Jinping, a considerable feat in Japan-China relations. Japan’s foreign policy under Abe then was, despite holding a Japan-US alliance at its core, evidently multifaceted and far-reaching in nature.
The resurgence of Japan as a major player on the world stage
Abe’s foreign policy endeavoured to return Japan to its place on the world stage, spearheaded by its signature Free & Open Indo-Pacific vision (FOIP), and rules-based approach to international relations. This vision, and its focus on the Indo-Pacific region and China’s rise, positioned Japan amongst like minds. Countries such as the US, the UK, India, Australia, and more, advocate for a similarly ‘free’ and ‘open’ Indo-Pacific. The intention of this is to prevent a zero-sum approach to international relations in the region.
Abe’s foreign policy aimed to alter course from Japan’s post-war pacifism and take a stronger stance against an increasingly assertive China. In aligning itself with like-minded nations and positioning itself as a regional buffer between China, Japan has reemerged as a major security player in the Indo-Pacific, particularly through a growing US-Japan alliance. Arguably the culmination of these efforts during his time as MP, Abe’s contribution to the revival of the Quadrilateral Security Dialogue (QUAD) will perhaps shape regional security architecture for years to come. In particular, the eventual inclusion of historically non-aligned New Delhi into the China conversation in earnest and their membership to the QUAD, despite initial reluctance, was a significant step for the grouping and Abe’s Indo-Pacific Vision.
Abe’s Indo-Pacific diplomacy, therefore, found success in positioning Japan as a global player in the eyes of the international community, as well as strengthening alliances with other powers. His loss as a political figure and enduring party influence, therefore, will be felt by allies abroad as well as his Liberal Democratic Party (LDP). India has declared July 9 a national day of mourning for Abe, illustrating the close ties he nurtured between the two countries, and the US will hope for a continuation of his foreign policy approach. Following his tragic death, his legacy is tied largely to the QUAD, which will serve as one of the primary avenues through which to achieve a Free and Open Indo-Pacific.
Controversy and Contempt in East Asia
While a dynamic foreign policy has won Japan friends further abroad, closer to home Abe’s strong conservatism, or nationalism in the eyes of critics, has created discord with East Asian neighbours, namely China and South Korea. Japan’s strategic proximity to the US creates obvious friction with China, however, tensions between the two are present elsewhere too. The two neighbours have a long relationship and deep economic ties. However, a history of conflicts, such as the Second Sino-Japanese war (during WW2), significantly influences mutual perceptions. Japan, particularly under Abe, is often criticised for not having sufficiently made amends for its actions during the war. Abe’s public failure to explicitly apologise, on the 70th anniversary of Japan’s surrender during WW2, for Japan’s actions during the war was notable and the issue still looms over bilateral relations today.
While currently enjoying an era of ‘cold peace’ with one another, the threat of conflict persists. An ongoing example is the territorial disputes over the Senkaku Islands, with regard to which Abe pursued a nationalistic stance, the influence of which arguably extended beyond his time in office. Additionally, Abe was vocal on the Taiwan issue both during and after his terms as PM. On November 2021, Japan stated that a Taiwanese contingency will be a security concern for Japan and the US, and Japan and like-minded parties would have to intervene. This sends a clear message to China with regard to Japan’s alignment, and Abe in particular was outspoken on the issue. His last Op-Ed, published in the Los Angeles Times, called for the US to make “clear to the world it will defend Taiwan against Chinese invasion”. A compelling final message to leave the international community.
Abe’s Japan also found relations with South Korea strained as a result of similar perceived diplomatic slights. While trying to create closer ties with Seoul that looked to the future, his attempts at rapprochement were hindered by his unapologetic attitude to the past. His ‘revisionism’ of Japan’s history is cited by many critics as a significant obstacle to improved bilateral relations with South Korea. These historical tensions were worsened further by Abe’s launching of a trade war in 2018, following accusations of South Korea sending chemicals to North Korea. However, this eruption of tensions also follows the South Korean supreme court decision to call on Japanese companies to pay reparations for the use of Korean slave labour, signalling the lasting significance of their historical antipathy. As one of Japan’s most significant security and trade partners, this reluctance to compromise, and subsequent enmity, with its East Asian neighbour marks a diplomatic failure and perhaps dampens an otherwise remarkable foreign policy legacy.
Abe’s Foreign Policy Going Forward
While the legacy of Abe’s foreign policy, despite an arguable tactlessness in East Asia, is perhaps secure, the staying of its course is now in the hands of others. While former PM Suga was ‘handpicked’ by Abe, current PM Kishida is more moderate in comparison to his two most recent LDP predecessors. While Abe was still able to maintain some imposition of influence after his two terms, following his death this influence may wane in the face of current domestic pressures. Kishida, in the wake of Abe’s death and surfacing controversies around the LDP’s apparent links to the Unification Church, faces mounting public pressure and falling ratings. It is worth noting as well, that Kishida has said during his term as PM that he will emphasise a more humanitarian and value-based foreign policy. This perhaps signals a departure from Abe’s foreign policy, particularly insofar as it concerns Russia.
The ongoing conflict in Eastern Europe between Russia and Ukraine creates a more precarious political environment in which to maintain such a dynamic and multifaceted foreign policy. While the Japan-US alliance arguably inhabits the core of Abe’s foreign policy, his foreign policy also became known for its multifaceted approach. With regard to Russia, Abe met Putin 27 times during his second term, thus clearly committed to Russo-Japanese ties, here in regard to Japanese territorial claims. Despite Japan’s alignment with the US on matters Indo-Pacific, in 2016 Abe sent Russia an economic cooperation package after their invasion of Crimea, while they were still suffering from western sanctions, in hopes of facilitating territorial negotiations. Perhaps as a result of both a more moderate leaning and the increased instability that the war in Ukraine brings, Kishida’s Japan has joined the West in sanctioning Russia, on top of other actions taken against Russia. This perhaps demonstrates more of a willingness of Japan to engage in ‘value-based’ foreign policy. The question going forward, therefore, is; To what degree will Fumio Kishida uphold Abe’s foreign policy? and; How will he proceed regarding initiatives such as ‘Free and Open Indo-Pacific’, strengthening strategic ties to the US, and pushing for a clear and explicit stance on the Taiwan issue?
Abe’s Death and Japan-South Korea Relations: Red Light or Green Light
By Sebastian Kim
It is not hyperbolic to say that Japan-South Korea relations were at their absolute worst, since the demise of the Empire of Japan, during the Abe administration. Amid amplified diplomatic tension and mutual public hatred, the name Shinzo Abe has become deeply engraved in such bilateral relations. While a grand start to a new Conservative Yoon regime in Seoul, alongside Washington’s willingness to mediate the two to counter its rival China, supplying a more stable pathway to improved bilateral relations, the shocking death of Abe could act as an obstacle. Will Abe’s death be a red light or green light for Japan-South Korea relations? It seems likely in the short term at least, that it may reignite certain political tensions between the two nations.
In Japan, the death of Abe may consolidate his political legacy as a hard-line right-wing nationalist. His shocking assassination has led his supporters to dogmatise the Japan-South Korea relations sought by Abe. History remains a core component in Japan-South Korea bilateral relations, with differing views over topics of compensation and apologies for actions against Korea under colonial rule. However, Abe held a clear stance that Japan cannot, and should not, apologise for its past imperialism, which in the wake of his assassination, could be rallied around by Japanese conservatives. At the same time, the death of Abe means that there is no traffic control for hard-line Conservatives in Japan, since the symbolic epicentre is now gone, presenting a major challenge for PM Kishida in managing Japan-South Korea relations. This was evident previously at the NATO Summit in Madrid, where Kishida was reluctant to sit down with Yoon due to domestic pressures of public opinion against South Korea, now likely to intensify in the absence of said traffic control.
Additionally, for the 2022 Japanese House of Councillors Election, right after the death of Abe, it was highly predicted the reigning Liberal Democratic Party (LDP) would gain sympathy votes, bringing centrist voters out to polling stations for the LDP and unifying their supporters. As a result, the LDP won sole majority itself for the first time in nine years. However, this boost in political support from Abe’s death creates a critical challenge for Japan-South Korea relations. Since Japan has a parliamentary political system, if Kishida is seen to be taking a much more conciliatory stance toward Seoul, conservative elements within the LDP could begin voicing opposition. It is highly likely therefore, that Abe’s death will, and has already, cast a potentially indelible shadow over Kishida’s foreign policy towards South Korea. Indeed, a red light for the bilateral relations in the short term.
In South Korea, the death of Abe was similarly impactful, reigniting the flame of anti-Japanese public sentiment. Abe remains the most infamous Japanese prime minister for South Koreans, especially for his history revisionism. Instead of apologies, acknowledgment, or self-reflection on past aggressions, Abe focused largely on strengthening Japanese national prestige and self-esteem through, most notably, denying past imperialism and visiting Yasukuni Shrine (memorial site that includes the commemoration of war criminals) several times. In particular, Abe’s outright denial of comfort women and forced labour during the Japanese colonial era has evoked considerable antagonism from the South Korean public. After a chain of bilateral diplomatic and economic disputes, including withdrawals of Japanese diplomats and the termination of the GSOMIA intelligence pact, the South Korean public has actively started a ‘NO JAPAN CAMPAIGN’, This has spread nationwide to make the consumption of anything ‘Japanese’ a taboo. The South Korean public’s anti-Japanese sentiment reached a peak during Abe’s era; hence, it is not a surprise that there were celebrations on Korean social media after his death. As such, the death of Abe, for some a contemporary symbol of imperial Japan, has resurfacedSouth Korean public sentiment that Japan is more of an unscrupulous bully than a regional partner.
The good news is that the new Yoon regime of South Korea has been very explicit in its intention to improve Japan-South Korea relations since the start. After Abe’s death, South Korea provided a total diplomatic package of a telegraphic condolence to Mrs. Akie Abe, a condolence visit to a Japanese embassy, and a dispatch of a special delegation, which may be interpreted as South Korea’s efforts to revive the trust between the two countries. However, regardless of the willingness of the Yoon regime, it is notable that the approval rating for Yoon has fallen below 30% in less than 3 months of his tenure. This poses a limit on him to continue active efforts to reconcile with Japan amid reignited anti-Japanese public opinion. Moreover, South Korea’s extremely fast pace for the resolution may create a side effect since it contrasts with Japan’s need for a slow, delicate management of both domestic and international environments. Hence, in the short term, it seems unlikely for South Korea to actively seek an improvement of the bilateral relations.
In the long run, the tall shadow of Abe cast over Japanese foreign policy towards South Korea may fade away and there will be more incentive and opportunity for Japan and South Korea to cooperate as regional partners. However, in the short term, significantly improved relations seem to remain a red light.
Shinzo Abe and Taiwan: Past, Present—and Future?—of Japanese-Taiwanese Relations
By Albert Cullel Cano
The assassination of the former Prime Minister of Japan, Shinzo Abe, was especially heartfelt in Taiwan. Indeed, not only did Abe favour a turn in Japanese foreign policy towards the island during his two terms in office—but also before, in between, and after them. Thus, Abe’s foreign policy was characterised by his delicate funambulism: walking a line between the formal status quo with China and informally readjusting relations to Taiwan.
Therefore, Abe’s attitude and policy towards the island should be read against a backdrop of maintaining a collaborative relationship with China, alongside concurrent attempts to balance Chinese regional expansion. In 1972, Japan revoked the Treaty of Taipei, thus ceasing to officially recognise Taiwan and acquiescing to the One China policy, placating China and normalising Sino-Japanese relations. Relatedly, in 1978 the Treaty of Peace and Friendship between Japan and the People’s Republic of China was signed—later reasserted most significantly by Abe himself during his Beijing visit in 2006. Furthermore, in 1998 the Japan-China Summit and Joint Declaration on Building a Partnership of Friendship and Cooperation for Peace and Development took place. In short, this status quo of collaboration continued during Abe’s first and second terms, seeking to improve relations with China, previously strained by the Senkaku Islands dispute. To this end, Abe met with President Xi Jinping in 2014 and visited China in 2018.
However, the results of his efforts were unfruitful—mostly through his own fault. The Chinese, already unhappy with Abe’s visits to Taiwan in 2010 and 2011, criticised his attendance to the Yasukuni Shrine in 2013, which commemorates those fallen while fighting for Japan—a list that includes convicted war criminals of the second Sino-Japanese War. At any rate, Abe’s actions in relation to Taiwan can be read as a critical attempt at regionally maintaining the status quo with China to some degree, while specifically seeking to undermine Chinese influence in East Asia and cap China’s global and regional assertion of latter years. Indeed, wary of China’s expansionism, Abe felt it posed a threat to his nationalistic vision of Japan’s place in Asia and the world. Thus Abe’s balancing approach to China—and critically, Taiwan.
During his 2010 and 2011 visits to the island, Abe was already defined as ‘the ROC’s best friend’ by Taiwanese authorities. Now as prime minister, he repeatedly put to the fore the shared values of liberalism, freedom, and democracy between Japan and Taiwan, convinced that such common ground could resolve any issue. This was successfully put to the test with the signing of the East China Sea fishery agreement in 2013. In this way, Abe qualified Taiwan as an ‘important partner’ and a ‘precious friend’ in 2015—language that to this day continues to be used by Japanese authorities in framing Japan-Taiwan relations. In 2019, Japan also cosponsored the Global Cooperation and Training Framework, a US-Taiwan initiative that showcases Taiwanese good governance.
Even after he stepped down from office, Abe continued supporting and enhancing relations with Taiwan. Notorious was his picture with Taiwanese pineapples after the Chinese ban on this fruit in 2020. More significant however, was his statement in 2021 declaring that, ‘A Taiwan emergency is a Japanese emergency, and therefore an emergency for the Japan-US alliance’—thus tethering Japan’s security to that of Taiwan. Needless to say, this was a highly contentious statement. Going a step further, Abe’s very last op-ed, in the Los Angeles Times, called for the US to abandon its policy of strategic ambiguity towards Taiwan and proclaim their determination to defend Taiwan against a Chinese invasion.
Abe’s relevance in this process of Taiwan policy readjustment cannot be overstated. Slyly characterised as a ‘shadow shogun’ for his kingmaker role, Abe has influenced Japanese policy to a degree that has survived both his terms and likely his very person. His immediate successor, Yoshihide Suga, issued a joint statement together with President Joe Biden in 2021 that included a clause on Taiwan for the first time in fifty years. This preceded another US-Japan joint leader’s statement in 2022, now by Suga’s successor Prime Minister Fumio Kishida, that “reiterated the importance of peace and stability across the Taiwan Strait as an indispensable element in security and prosperity in the international community”. To further compound this, Japan’s most recent defence white paper does indeed mention Taiwan and a hypothetical Chinese invasion—adding to Kishida’s warning of July 2022 that ‘Ukraine today may be East Asia tomorrow’.
Undoubtedly, Japan has effectively upped the Taiwanese stakes, in what cannot be read merely as altruistic foreign policy. Granted, exchanges of humanitarian aid during the pandemic deepened the emotional bond between the two. However, Japan is not a country notorious for others’ ethno-national considerations; or for its concern over self-determination movements. As a token, take the half-Taiwanese leader of the opposition during Abe’s second term, Renho Saito, criticised by Abe’s Liberal Democratic Party for being ‘Chinese’. Hence, Japan’s reengagement with Taiwan may stem instead from the certainty that enhancing Taiwan’s regional position wedges China’s rise in turn. In line with Abe’s bid for Japanese remilitarisation, Japan seems to now hold a firmer stance on the Taiwanese issue than the US. This has become especially clear after Nancy Pelosi’s recent visit to Taiwan—however begrudged it was—and China’s aggressive reaction. That being so, Japan may continue to push the US towards forfeiting their strategic ambiguity and officialise the promise to defend Taiwan in the event of a Chinese invasion. Indeed, this would potentially exacerbate tensions towards a full-on cross-Strait crisis. And this could, in turn, favour Japan’s nationalistic bid to scrap the anti-war Article 9 of the Constitution—a bid bequeathed, once more, by Shinzo Abe.