Dec 04, 2014

    Abe can learn from maverick mentor

    IF SHINZO Abe wants to be remembered as more than a two-time failure as a Japanese leader, he should learn from the last one to achieve anything big: his political mentor, Junichiro Koizumi.

    In speeches and blog posts, Mr Koizumi urged voters to pressure his own Liberal Democratic Party (LDP) to support change. With public opinion firmly on his side, the "maverick", as he was called, was able to prod banks to write down bad loans from the 1980s.

    He cut wasteful public-works spending and privatised huge entities like the Japan Post. He cast aside diplomatic niceties to visit North Korea.

    Unfortunately, when Mr Koizumi lost his public support - largely because of distractions like his multiple visits to the controversial Yasukuni Shrine - he lost his nerve. As his approval ratings dipped below 50 per cent, he curbed his ambitions to remake the Japanese economy.

    Now, in the halls of Nagatacho, Tokyo's Capitol Hill, Mr Koizumi is remembered less as Japan's Margaret Thatcher or Ronald Reagan than as a cautionary tale.

    As he kicks off his campaign ahead of the Dec 14 elections, Mr Abe should take heed. His own reform drive is stuck in first gear. Aside from massive Bank of Japan stimulus, Abenomics can claim few concrete accomplishments as yet.

    Mr Abe has made no real progress on loosening labour markets, lowering trade barriers, cutting red tape or increasing innovation. An April sales tax hike sent the economy back into recession, while concerns about Japan's debt burden prompted Moody's on Monday to downgrade the country to the same level as Bermuda, Oman and the Czech Republic.

    In a less gerrymandered and more representative democracy, Mr Abe's LDP would probably take a beating on Dec 14. The opposition Democratic Party of Japan is in disarray and isn't expected to put up much of a fight. Still, given his approval rating - below 50 per cent and falling - Mr Abe will almost certainly come out of the election with a weaker mandate than he had two years ago.

    That should not be a signal for him to scale back his ambitions as Mr Koizumi did - quite the opposite. The Japanese want Abenomics to work, and in theory, the reforms Mr Abe has discussed are the right ones.

    Ordinary citizens, most of whom work for small and medium-sized enterprises, simply aren't feeling its benefits yet. Disproportionately, those are going to huge national champions like Toyota and Sony, whose exports are benefiting from a weaker yen.

    As Mr Koizumi did early on, Mr Abe should appeal directly to the Japanese people to lend a renewed push to his structural reforms, which are facing resistance from the same vested interests that have stymied previous attempts at change.

    Once the votes are counted, Mr Abe should unveil Abenomics 2.0 with a very specific timeline: next month. The Parliament will move to deregulate labour markets, and the month after, to tweak the tax system to support start-ups. He should lay down quotas for corporations to increase the number of women in leadership positions, as well as specific benchmarks to make the bureaucracy more accountable.

    Mr Abe's message should be: My fellow Japanese, this is our last chance to avoid irrelevance as China, India and Indonesia reshape Asia's economic landscape - and I need your help. Please call your local Diet member and demand that they get behind my policies.

    Mr Abe should keep in mind why voters backed him to begin with: his apparent decisiveness and determination to challenge old ways of doing things.

    His popularity has slipped, as Mr Koizumi's did, since he's gone off on tangents: passing a controversial government secrecy Bill, moving to restart nuclear power plants, unnecessarily alienating China and South Korea with his own Yasukuni visit.

    Second chances are incredibly rare in politics, let alone a third. Mr Abe's return to the premier's office in 2012 was an opportunity to erase the embarrassment over his scandal-ridden 2006-2007 term. Voters seem willing to give him one more chance because they still hope he can shake Japan out of its lethargy. He won't get another.