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Shinzo Abe’s Call for Early Elections in Japan Is Prompted by Fear, Analysts Say Shinzo Abe’s Call for Early Elections in Japan Is Prompted by Fear, Analysts Say
(about 5 hours later)
IWAKUNI, Japan — Prime Minister Shinzo Abe’s call on Tuesday for early elections was prompted by fears not only that his once-vaunted program for Japan’s economic revival is failing, but also that his popularity may also expire as a result, analysts said. IWAKUNI, Japan — When his popularity was soaring back home, Prime Minister Shinzo Abe of Japan declared in Washington a year ago that “Japan is back.”
In a live broadcast on national television, Mr. Abe declared that he would dissolve Parliament later this week, and then hold national elections for the more powerful Lower House on Dec. 14. He explained the move by saying he wanted to ask voters to approve his decision to postpone a scheduled increase in the national sales tax. He warned that such increases could further hurt growth. Now it appears that he spoke too soon.
He also framed the election as a broader referendum on his economic recovery measures, known as Abenomics. Faced with troubling economic data showing that Japan has slid back into recession, Mr. Abe called Tuesday for early elections, raising fears not only that his vaunted program for Japan’s economic revival was faltering, but also that his popularity may expire as a result.
“There are divided opinions about the economic policies that we are pursuing,” Mr. Abe said. “There is also resistance. To continue advancing that growth strategy with the support of the people, we need to listen to the voice of people.” Mr. Abe was all about stimulus and reform, pursuing a program supercharged with nationalism that he offered as an antidote to Japan’s decades of economic slumber and persistent national malaise. It is not yet clear why his fortunes stalled. Was it that he pushed stimulus too hard in a nation burdened by outsized debts? Or was he not bold enough, failing to enact painful market-opening measures and structural changes needed to make the recovery last?
Political analysts said the call for an election was an admission by Mr. Abe that Abenomics, intended to pull Japan out of its two-decade slump, was losing steam. The program, a mix of increased government spending and an aggressive pumping of cash into the economy by the central bank, spurred an economic recovery, lifted the stock market and won praise as a potential model for other developed economies. In Washington last year, Mr. Abe proudly proclaimed, “Japan is back.” Mr. Abe is banking on voters to choose growth.
Now it appears that he spoke too soon. One problem, economists say, is that Mr. Abe failed to use the upturn as a chance to push through painful market-opening moves and structural changes needed to make the recovery last. “There are divided opinions about the economic policies that we are pursuing,” Mr. Abe said in a speech broadcast on national television. “There is also resistance. To continue advancing that growth strategy with the support of the people, we need to listen to the voice of people.”
Abenomics’ weakest point has been its failure to end the long slide in wages earned by average Japanese citizens, especially families who did not benefit from the rally in the stock market. This problem was compounded when the central bank took strong action to end nearly two decades of a corrosive downward slide in prices known as deflation, replacing it with inflationary price increases. Suddenly, working Japanese felt poorer, caught between rising prices and falling wages. Mr. Abe announced that he would dissolve Parliament later this week and hold an election for the lower house next month, saying he wanted voters to approve his decision to postpone a scheduled increase in the national sales tax, which he said would have slowed the economy further.
But the biggest blow to Abenomics may have come from the increase this year in the national sales tax. The increase, which was written into law before Mr. Abe took office two years ago, was supported by many fiscal hawks in his governing Liberal Democratic Party as a way to rein in Japan’s enormous budget deficits. He also framed the election as a broader referendum on his economic recovery measures, known as Abenomics. But political analysts said his call for an election was an admission that Abenomics was losing steam.
The tax increase appears to have had a bigger effect on the economy than even most economists expected, reducing consumer spending and snuffing out the still fragile economic recovery. The extent of the damage was not known until Monday, when official figures showed that Japan had fallen into a recession in the third quarter. With a mixture of increased government spending and an aggressive pumping of cash into the economy by the central bank, the program spurred an economic recovery in Japan, lifted the country’s stock market and won praise as a potential model for other developed economies.
That bad economic news, along with criticism of his policies by opposition parties, prompted him to call for early elections, Mr. Abe said. But it has not ended the long slide in the incomes of average Japanese citizens, especially families who did not benefit from the financial market rally. This problem was compounded when the central bank took strong action to end nearly two decades of a corrosive downward slide in prices known as deflation, and get prices rising again. Suddenly, working Japanese felt poorer, caught between inflation and falling wages.
The biggest blow to Abenomics, though, may have come from an increase this year in the national sales tax. The tax increase was written into law before Mr. Abe took office two years ago, and it had the backing of many fiscal hawks in his governing Liberal Democratic Party as a way to rein in Japan’s enormous budget deficits.
But that tax increase appears to have had a bigger braking effect on the economy than most economists expected, reducing consumer spending and snuffing out the still-fragile economic recovery. The extent of the damage was not known until Monday, when official figures showed that Japan’s economy had contracted in the summer for the second straight quarter, meaning it was back in recession.
That bad economic news, along with criticism of his policies from opposition parties, prompted his call for early elections, Mr. Abe said.
“There is criticism that Abenomics is a failure,” Mr. Abe said. “So what should we do? Unfortunately, I have yet to hear one concrete idea.”“There is criticism that Abenomics is a failure,” Mr. Abe said. “So what should we do? Unfortunately, I have yet to hear one concrete idea.”
Analysts said a prolonged economic slowdown could spell the end of a strong two-year run by Mr. Abe, who enjoyed high approval ratings and appeared destined to stay in office for several more years, a rarity in a nation whose leaders tend to have short political life spans. His ability to lift Japan’s economic gloom and restore confidence is critical to his popularity, the analysts said. Analysts said a prolonged economic slowdown could spell the end of a strong two-year run by Mr. Abe, who enjoyed high approval ratings and appeared destined to break his country’s usual mold of short-tenured leaders. Success in lifting Japan’s economic gloom and restoring confidence is critical to his popularity, the analysts said.
“The size of the economy’s decline was a big shock to Abe and the Liberal Democratic Party,” said Katsuyuki Yakushiji, a professor of politics at Toyo University in Tokyo. “It makes Abenomics look like a failure. Abe suddenly looks desperate to stay in power.”“The size of the economy’s decline was a big shock to Abe and the Liberal Democratic Party,” said Katsuyuki Yakushiji, a professor of politics at Toyo University in Tokyo. “It makes Abenomics look like a failure. Abe suddenly looks desperate to stay in power.”
Analysts also said the recent signs that Abenomics was fizzling could hamper Mr. Abe’s efforts to take less popular actions, like expanding the role of Japan’s military or restarting its shuttered nuclear plants. Analysts also said the recent signs that Abenomics was fizzling could hamper Mr. Abe’s efforts to take less popular actions on other fronts, like expanding the role of Japan’s military or restarting its shuttered nuclear plants.
In announcing the election, Mr. Abe, not surprisingly, focused on an issue close to voters’ pocketbooks: whether to postpone a second scheduled increase in the national sales tax, scheduled to take place next year. Mr. Abe said he wanted to put the issue to voters because it would amount to a reversal of the position held by his party when the bill passed two years ago. In announcing the election over the issue of putting off a second scheduled increase in the sales tax, Mr. Abe, not surprisingly, kept his focus close to voters’ pocketbooks. The prime minister said he wanted to put the issue to voters because postponing the increase would be a reversal for his party, which backed the law when it passed two years ago.
However, many political experts also said they detected deep pessimism in Mr. Abe’s decision. By calling an election, they said, Mr. Abe is essentially admitting that he does not see the economy regaining energy anytime soon and would rather take action now before voters become even more unhappy. However, many political experts said they also detected deep pessimism in Mr. Abe’s decision: He was essentially admitting that he does not see the economy regaining energy any time soon, they said, and that he would rather face the voters now than after they have become even more unhappy.
The experts point out that Mr. Abe’s approval ratings have already begun to fall, with percentages in the low 40s in recent opinion surveys. Not all of this decline was because of the souring economy: a series of political financing scandals has also hurt his administration, bringing back unpleasant memories of Mr. Abe’s first tenure as prime minister seven years ago, when similar scandals toppled his government. Mr. Abe’s approval ratings have already begun to fall, with percentages in the low 40s in recent opinion surveys. The souring economy is not the only reason: a series of political finance scandals has also hurt his administration, bringing back unpleasant memories of Mr. Abe’s first tenure as prime minister seven years ago, when similar scandals toppled his government.
“There is only one reason to call an election now, and that is the fear that things will be only worse if he waits,” said Gerald L. Curtis, a specialist on Japanese politics at Columbia University. “The expectation of political stability and an Abe administration unchallenged for six years, that so many thought just two weeks ago was the most likely scenario, is now history. Suddenly, we have an economy in recession, a government in political trouble and a very cloudy future.”“There is only one reason to call an election now, and that is the fear that things will be only worse if he waits,” said Gerald L. Curtis, a specialist on Japanese politics at Columbia University. “The expectation of political stability and an Abe administration unchallenged for six years, that so many thought just two weeks ago was the most likely scenario, is now history. Suddenly, we have an economy in recession, a government in political trouble and a very cloudy future.”
With Mr. Abe facing so many challenges, an election might seem risky. However, analysts said the prime minister was betting that his party was still more appealing to voters than the main opposition Democratic Party, which has fallen into disarray since its defeat two years ago. Even so, Mr. Abe was betting that his party was still more appealing to voters than the main opposition party, the Democrats, who have fallen into disarray since their defeat two years ago.
In fact, experts said, one reason to call an election is to prevent the Democrats and other opposition parties from having enough time to enlist candidates and mount a serious challenge. With the vote only a month away, the Democrats acknowledge that they have candidates for only 134 of Japan’s 295 electoral districts. In fact, experts said, one reason to call an early election is to deny the Democrats and other opposition parties the chance to enlist a full slate of candidates and mount a serious challenge. The Democrats acknowledge that they have candidates for only 134 of Japan’s 295 electoral districts.
The next-largest opposition party, the Japan Innovation Party, run by the mayor of Osaka, Toru Hashimoto, has said it can field fewer than 75 candidates.The next-largest opposition party, the Japan Innovation Party, run by the mayor of Osaka, Toru Hashimoto, has said it can field fewer than 75 candidates.
“The opposition has been caught with its pants down,” Mr. Curtis said. “Waiting another year to call the election only gives the opposition more time to get better organized.”“The opposition has been caught with its pants down,” Mr. Curtis said. “Waiting another year to call the election only gives the opposition more time to get better organized.”