Abe’s Record-Setting Tenure Leaves Japan Asking What’s Next

(Bloomberg Businessweek) -- Just over seven years ago, Shinzo Abe was a political has-been purveying eccentric monetary policy. Now—as of today—he’s Japan’s longest-serving prime minister, breaking a record that had stood for more than a century..Abe’s 2007 resignation after an abortive first term in office kicked off a whirlwind of prime ministers—six came and went in as many years—and helped pave the way for his Liberal Democratic Party’s humiliating defeat in 2009, after 54 almost uninterrupted years in power. Abe used his years in the wilderness to develop a new focus, training his political messaging on the kinds of kitchen table issues that have today won him six straight national elections. Through a combination of skill and luck, he’s become an unlikely beacon of stability in an increasingly unpredictable world..Abe’s longevity has surprised even his top aides. “I never imagined he would go on this long,” says Hiroshige Seko, an LDP executive who served in the prime minister’s office for almost four years beginning in 2012. “I wondered whether it would last a year.”.And yet questions are emerging over how much longer Abe—or stable leadership—can last. The 65-year-old is heading into what may become a lame-duck period before his latest three-year term as head of the LDP ends in September 2021. He’s said he won’t seek a rare fourth-straight term atop the party; however, he also said that about running in 2018..Until now, economic health has been the key to Abe’s political health, says Ichita Yamamoto, who served two years in Abe’s cabinet, beginning in 2012. “I think we are going into a difficult time,” he adds. Trade tensions have hurt Japan’s growth, which decelerated sharply in the third quarter to an annualized pace of 0.2%, down from 1.8% three months earlier..Abe and his ministers have increasingly focused on unemployment as their preferred measure of economic strength. A program of unprecedented monetary stimulus known as Abenomics has helped reduce the unemployment rate from 4.3% when he took office to 2.4% in September, hovering just above a 27-year low reached in July. Reforms aimed at reducing income inequality have also helped Japan avoid the deep internal divisions afflicting wealthy places from the U.S. to the U.K. to Hong Kong. Meanwhile, the Nikkei stock average has more than doubled since Abe took office..On foreign policy, polls show that voters approve of his hard-line approach to relations with South Korea, as well as his efforts to maintain ties with U.S. President Trump via rounds of golf and hamburgers—although that was before Foreign Policy reported that the White House demanded a fourfold increase in financial support for U.S. troops stationed in Japan. North Korean nuclear tests and China’s growing military might have helped quiet opposition to Abe’s reinterpretation of Japan’s post-World War II constitution, which banned the exercise of war, to expand the role of the military. Having inherited a standoff with China over islands in the East China Sea, Abe now hopes to welcome President Xi Jinping on a state visit in the spring..Domestically, the prime minister gave himself greater control over government appointments by pushing a new Cabinet Bureau of Personnel Affairs through the Diet in 2014, which has enabled him to keep his bureaucrats tightly in line. Learning from a damaging sales tax hike in 2014, he introduced measures to offset the effect of a second increase this year. In perhaps the biggest stroke of luck, the opposition has failed to regroup from its election defeat, remaining weaker than it’s been for decades..While there’s still a disgruntled constituency of Abe opponents who could be galvanized by the right opposition leader—a feat Tokyo Governor Yuriko Koike almost pulled off in 2017—Abe’s successor will most likely come from within the LDP. A November poll by the Yomiuri Shimbun newspaper showed Abe’s support at a respectable 49%, despite a series of festering scandals in his cabinet..According to one former minister, the LDP’s leadership choice may be swayed by the results of the 2020 U.S. presidential election. “Who is going to deal with that Mr. Trump?,” says Takeshi Iwaya, who served as defense minister under Abe until September. “Whatever the rights or wrongs of it, you can’t be prime minister of Japan unless you can maintain good ties with the U.S.” If Trump wins reelection, the party may be more inclined to give Abe another mandate rather than risk a change in leadership..Many lawmakers expect Abe to call an election early next year while his support is still robust. But he could still step down even if he wins, most likely at some point after the 2020 Olympics in Tokyo, introducing more uncertainty just as the economic outlook turns gloomy..“A decline in demand for workers in Japan’s manufacturing, wholesale, and retail sectors put a dent in a job market that is still very tight,” said Bloomberg economist Yuki Masujima after September’s unemployment number came in slightly higher than expected. “Some sources of the weakness are temporary, some potentially more persistent.” Abe’s government has so far made little progress on structural reforms aimed at making Japanese businesses more competitive..Abe has singled out his former foreign minister, Fumio Kishida, as a future leader. With a low public profile and no clearly delineated policy goals, Kishida could be a stopgap enabling Abe to return to the top job at a later date. If the party selects Defense Minister Shigeru Ishiba, who narrowly lost the leadership contest to Abe in 2012 and has distanced himself from his rival, that could be read as a desire for a cleaner break from Abe’s legacy. Environment Minister Shinjiro Koizumi, the 38-year-old son of a former prime minister, has often led in surveys asking people who they want to succeed Abe, but is generally seen as too young to get the job in Japan’s seniorcentric political system..“Not many people are supporting Abe enthusiastically—it’s just that they can’t think of anyone else,” says Katsuya Okada, who was deputy prime minister in the Democratic Party administration that immediately preceded Abe’s 2012 return to power. The sense of inevitability surrounding Abe depends on the global economic environment, Okada says. “If conditions become harsher, that could change greatly.” —With Emi Nobuhiro.To contact the editor responsible for this story: Jillian Goodman at jgoodman74@bloomberg.net, Brendan Scott.©2019 Bloomberg L.P.

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Abe’s Record-Setting Tenure Leaves Japan Asking What’s Next

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