A more militaristic Japan? Shinzo Abe's party now controls both houses

The convincing win by Shinzo Abe's Liberal Democrats in Japan's upper house on Sunday gives the country its most stable government in seven years. It also raises the spectre of a more militaristic and economically agressive Japan, which has some trading partners worried.

Nationalism, a less pacific constitution and an aggressive, pro-Japan economic plan all pushed to the fore

Buoyed by government cash, a suddenly resurgent Japan has seen its Nikkei stock market grow by at least 60 per cent since November. Good news for Toyota, not so much for its competitors. (Associated Press)

Prime Minister Shinzo Abe has proved that patience in politics, along with good timing, can pay off.

Six years ago, he was licking his wounds after his Liberal Democratic Party suffered a demoralizing defeat in an upper house election. He resigned two months later, citing health issues.

Today, he's feeling the rush of political redemption. He returned to the top job in December following a landslide general election, and now he’s savouring the complete victory that eluded him back in 2007.

"I think the people have shown that they believe in us," Abe said in an interview with public broadcaster NHK after the LDP and its junior coalition partner, New Komeito, won yesterday's upper house vote. "We are really the only choice."

Abe's triumph breaks a deadlock in the Diet and may end the leadership shuffle that has given the country a rotating cast of prime ministers for much of the past seven years. It also threatens to usher in a more militaristic Japan, as well as a revitalized manufacturing base — buoyed by hyper-cheap government money — that has some of its critics and trading partners more than a little worried.

"Abe himself, but also his entourage, have stayed on message so far not in order to just do economics, but also to push their nationalistic agenda," says political science professor Koichi Nakano of Sophia University. "He's a hardcore nationalist with a very jarring, revisionist view of history."

Abe learned a tough lesson from the 2007 campaign when voters panned his plans to beef up patriotic education and revise the pacifist constitution so that Japan's Self-Defense Forces could be made into a military. The day he was sworn in for the second time, he admitted he had once been "on fire with ideals," and so he dressed up his vision with a fiscal framework.

"The restoration of a robust economy is a truly urgent issue," he said. "A robust economy is a source of national strength for Japan."

The three arrows

The LDP, which has ruled for much of the post-Second World War era, now controls both houses of parliament and is better able to push through its policy agenda. A combination of voter disinterest (turnout Sunday was 51 per cent), a weak and fractured opposition, and Abe's singular, almost obsessive focus on reviving the economy helped the Liberal Democrats secure victory.

After his return to power, Abe rushed to implement the so-called the three arrows of his economic policy, which some have dubbed Abenomics: fiscal spending, monetary easing, and a growth strategy.

His administration allocated roughly $100 billion mainly to fund public works projects. He named Haruhiko Kuroda, the former president of the Asian Development Bank, as the governor of the Bank of Japan, and Kuroda quickly introduced massive credit-easing measures with a goal of raising inflation by two per cent within two years.

"Japan's economy has suffered from deflation for nearly 15 years," Kuroda said in a policy speech in March.  It is "a vicious cycle where a decline in prices causes wages and profits to contract, thereby reducing investment and consumption, consequently leading to a further decline in prices."

So far, the impact has been clear: the yen has weakened by about 20 per cent against the U.S. dollar since mid-November, giving Japan's export-driven economy a jolt; the key stock index, the Nikkei, has increased 60 per cent in value during the same period; and gross domestic product rose 4.1 per cent in the January-March quarter from a year earlier.

Perhaps just as importantly, Abe’s approval rating has hovered in the high 50-per-cent range.

Abenomics may not have won across-the-board support (the growth strategy, for example, has been widely criticized), but it has succeeded in injecting some much-needed optimism into the world's second-largest economy.

"The overall verdict on Japan’s effort to turn its economy around is so far, so good," wrote Nobel Prize-winning economist Paul Krugman in the New York Times.

Long to-do list

As prime minister, Abe inherited a number of open files when he took office.

For one, he had to set aside billions more in funds to speed the reconstruction of the northeast, where work is still dragging on more than two years after the earthquake and tsunami.

He also put a process in place to try to accelerate the decommissioning of the damaged nuclear plant in Fukushima, where Tokyo Electric Power Company workers have been dealing with a slew of problems, including indications that highly-radioactive water may have been leaking into the ocean ever since the March 11, 2011 meltdowns and explosions.

Despite the risks the crisis exposed, Abe has been pushing for idled reactors to go back online once they pass new safety tests. Plus, he has been actively promoting his country's nuclear power technology abroad.

The prime minister has also worked to shore up the Japan-U.S. alliance, which he argued had deteriorated under the previous government.

After meeting with President Barack Obama in February, he guided Japan to join the U.S.-led negotiations for the Trans-Pacific Partnership, a wide-ranging free trade deal involving 11 other nations. The decision won him praise from big business, but loud criticism from labour unions and a number of farmers.

Perhaps one of Abe's biggest challenges, though, involves repairing relations with his Asian neighbours, China in particular.

The two nations are locked in a fractious dispute over a handful of small, uninhabited islands that Japan controls in the East China Sea. At stake are fishing rights, undersea resources and national pride. Abe vows he won’t concede an inch.

Fears that a miscalculation or misunderstanding could trigger a conflict are very real, making U.S. leaders, who are obliged to protect Japan under a long-standing security treaty, increasingly nervous.

History's lessons

So much of the tension between Japan and its neighbours is tied to painful events in the past, specifically the atrocities Japanese soldiers committed before and during the Second World War.

Chinese and South Korean leaders fume when Abe suggests he may reconsider post-war apologies, or denies the Japanese military forced women into sexual slavery.

"Things that happened between nations will look different depending on which side you view them from," he said in a recent televised debate.

Abe’s desire to revise the U.S.-guided constitution — a long-held dream he inherited from his grandfather, former prime minister Nobusuke Kishi — has only fanned the diplomatic flames. Among other things, he aims to amend an article that restricts Japan from having a military.

"It’s not just Abe's personal agenda," notes Prof. Nakano. "It's also to do with a sizeable group within the parliamentary LDP really caring about those issues in a way that we haven't seen before. The party is rather more right wing and nationalistic than any time we can remember."

The LDP’s draft constitution includes clauses that would give the state more power over individuals. Nakano describes it as a "pretty vicious document." And while constitutional reform isn't a hot topic among Japanese, polls suggest the issue still divides them. Some cherish the original document's pacifist core.

"We gained the constitution at a price of huge sacrifice in the war," activist Yoshi Tsunoda said in an interview with NHK. "If we amend [it], that may lead our country to another atrocity."

Abe and his supporters say the current constitution doesn't reflect the will of the Japanese people because it was created while the country was under occupation (it went into effect in 1947). They also say the security situation in Asia has evolved, and the document should evolve with it.

"Many people ask me why Japan is now trying to change the constitution," political scientist Shinichi Kitaoka told NHK. "But the right question should be, why has Japan never changed the constitution until now?"

Any revisions would require approval by two-thirds or more of the lawmakers in both chambers of the Diet, then majority support in a public referendum. Prime Minister Abe has the power in the lower house. His convincing victory Sunday now means the upper house could be within reach as well.