By: Luke Montalbano
On July 8th, 2022, the longest serving Prime Minister of Japan, Shinzo Abe, was assassinated in Nara while promoting a Liberal Democratic candidate for the recent Japanese House elections. With gun crime being extremely rare in Japan and attacks against former heads of government almost unheard of in the west, the assassination came as a shock to many. Although concious immediately following the attack, Abe eventually succumbed to his injuries and passed away later in the day. The funeral was held on July 12th.
Shinzo Abe’s legacy is widely regarded as one of the most monumental of any Japanese Prime Minister. Upon taking office in 2012 for his second tenure as Prime Minister, Abe’s administration was faced with a stagnating Japanese economy fueled by low economic confidence, the asset price bubble burst of 1992, and poor debt management. Prior to Abe’s tenure, Japan incurred a stop-go fiscal policy and provided very little fiscal stimulus (oftentimes, the finance department overstated the injections provided to the economy). Moreover, the Japanese banking system had engaged high risk loans and led to substantial liquidity problems amongst borrowers.
With high risk loans dominating the banking system (much like in 2007 in the United States), the Abe administration diverted from the traditional stop-go fiscal policies and instead classified the stagnant economy as a problem of monetary policy. From here, the idea of Abenomics stems. This economic program isntitution by Shinzo Abe leaves the greatest mark on Japan. Although not entirely successful, it did fundamentally alter the course of the Japanese economy from stagnant to relatively competitive.
Abenomics is built on a principle of “three arrows.” Firstly, the Bank of Japan would engage in quantitative easing in the goal of keep inflation in check. The concern of lawmakers and economist was the severe depreciation of the Yen, which reduced investor confidence in the economy and limited trade opportunities with other states. The next “arrow” was expanded fiscal stimulus. Although the primary focus of Abenomics was monetary policy through quantitative easing, providing much needed injections into the economy allowed for greater economic participation and consumption within the Japanese economy. The success of the aforementioned policies will be discussed later on. The third “arrow” of structural reforms was far less successful, but progress has been made. The current Japanese Prime Minister, Fumio Kishida, has promised to continue the promotion of structural reforms.
The impact of Abenomics has been significant for the rebound of the Japanese economy. In the fourth quarter of 2017, Japan’s GDP grew by an annualized rate of 0.5%, marking the eight consecutive quarter of growth, an event that had not occurred for three decades. Moreover, the labour force participation rate for the Japanese demographic of women has increased by nearly 10 points from 66.5% in the year 2000. Demographic targeted policies have beem a substantial goal of later iterations Abenomics and have proven generally successful.
However, Abenomics has also been the impetus for a trade war between South Korea and Japan as well as leading many economists to fear of regional or global currency wars in the form of competitive devaluation, an occurrence that would considerably hurt consumers. These concerns, though, were offset by the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (a project which Abe spearheaded).
Under Shinzo Abe, nationalist sentiments were also revitalized, as he attempted to militarize the Japanese defence force and centralize political powers in the office of the Prime Minister. Although the former was note widely successful, Abe brought about a change in the structure of governance in Japan, which some consider to have violated the democratic principles upon which the current government is predicated.
Despite limitations in implementing a full-fledged armed force, Shinzo Abe did work to create military agreements with other states across Asia in the goal of countering the expanding influence of the People’s Republic of China. This cooperation was particularly noticeable with the unrecognized island state of Taiwan (The Republic of China) in which bilateral relations between the states dramatically improved.
Outside of the realm of domestic affairs, Shinzo Abe has a highly contentious legacy. Regarded by many as a Japanese nationalist, Shinzo Abe took a negationist approach to history, denying many war crimes committed in Korea and China by the Imperial Japanese Army during and prior to the Second World War. On the 70th anniversary of the Japanese surrender, Shinzo Abe refused to apologize for the mass rape of women and murder of civilians in Nanking by the Japanese army during the Sino-Japanese War. Nor did Abe apologize for Japan’s engagement in forcing Korean and Chinese women into sexual slavery (known as “comfort women”). Despite his great successes in the realm of economics and domestic revitalization, Abe’s legacy is tarnished by his refusal to acknowledge the fact, in a substantive manner, that Japan has had an exceedingly dark past. There is no doubt that this cannot be overlooked in an analysis of Shinzo Abe’s mark on history.
Shinzo Abe’s legacy is evidently open for debate. His revolutionary Abenomics are certain to have a lasting impact on Japan; however, will they be able to succeed to the extent Abe had hoped for? or will the results of Abenomics cause regional currency wars and provide little meaningful impact on long term Japanese economic growth? These questions cannot yet be answered. Moreover, Abe’s blatant disregard for Japan’s role in gross abuses of human rights and ultra-nationalist tendencies tarnish his legacy. The one thing that can be said with certainty is that Shinzo Abe left a remarkable impact on Japan and the globe as a whole.
Written by writer Luke Montalbano