Japan Is Facing an Essential Moment of Truth for Its Future.
Shinzo Abe's death comes at a time when the Japanese people are converting to his vision of a stable, strong and efficient state, able to defend its sovereignty.
The assassination of Shinzo Abe, on July 8, 2022, left Japan in a state of shock. His violence is out of place in a peaceful democracy where firearms are strictly controlled. Above all, Shinzo Abe, beyond his influence on the LDP, which remains the heart of power in Tokyo, occupies a unique place in Japanese political life by his longevity, his flamboyant style, and his ambition to put an end to the post-war regime to allow his country to meet the challenges of the 21st century.
Since 1945, Japan has rebuilt itself around a managed democracy and economy - partially liberalized from the 1980s onwards -, the choice of pacifism enshrined in Article 9 of the 1946 Constitution and the alliance with the United States. Its tremendous success, based on the power of its industry and exports, was undermined in the 1990s by a succession of upheavals and shocks:
The decline and accelerated aging of the population (125 million inhabitants, down by 3 million in ten years).
The aftermath of three decades of deflation and the Fukushima disaster.
The 2008 crash undermined globalization.
The destabilization of American democracy and strategy.
The affirmation of China's imperial ambitions.
The multiplication of North Korea's provocations.
Prime Minister from 2006 to 2007 and from 2012 to 2020, Shinzo Abe broke with the muted tone and technocracy of Japanese politics to impose his vision of a radical modernization of Japan, claiming the spirit of the Meiji era. And this around three priorities:
Abenomics, an economic policy based on monetary creation, fiscal stimulus, and structural reforms to break deflation.
The revision of the Constitution to launching the rearmament.
The containment of China through the strengthening of the alliance with the United States, the promotion of the Indo-Pacific concept, and the affirmation of Japan's presence and rank in the world - with the Tokyo 2020 Olympic Games as a symbol, finally postponed and truncated due to the Covid epidemic.
In the aftermath of the Fukushima tragedy, Abe managed to infuse his dynamism and optimism into a deeply traumatized population and had the wisdom not to abruptly exit from nuclear power, which is proving to be a major asset in the current energy crisis.
The floods of liquidity poured in by the Bank of Japan, which holds almost half of the public debt, which has risen to 257% of GDP, have not been able to break the deflationary spiral. On the other hand, the Constitution was reinterpreted in 2015 to allow reinvestment in defense and Japanese diplomacy has been very active in containing China, from the rescue of the Trans-Pacific Pact after the withdrawal of the United States decided by Donald Trump to the formation of the Quad with the United States, India, and Australia.
The Covid epidemic and the invasion of Ukraine by Russia, against the backdrop of the strategic partnership between Beijing and Moscow, have highlighted Japan's vulnerability. They give reason to Shinzo Abe in his desire to strengthen the Japanese state to guarantee the security and prosperity of the archipelago in the face of rising economic and geopolitical risks.
The current Prime Minister, Fumio Kishida, can rely on the shift in public opinion in favor of the defense and on the two-thirds majority he has in Parliament after the LDP's clear victory in the senatorial elections of July 10, 2022, to revise the Constitution. The death of his powerful predecessor also gives him room for maneuver to make changes, especially to Abenomics, which is not suited to stagflation.
Japan, which was slowly and belatedly emerging from the Covid epidemic, has been hit hard by the global crisis triggered by the war in Ukraine. Tokyo has joined the international sanctions against Russia. Its exposure to Russian and Ukrainian agricultural exports is low, but significant in the field of energy since Moscow ensures 4% of its supply for oil, 9% for gas, and 11% for coal.
The Japanese economy, which is suffering from the massive rise in energy and commodity prices, has tipped into stagflation with a 0.2% decline in activity in the first quarter and inflation of 2.5%. The Bank of Japan, unlike the Fed and the ECB, is maintaining its expansionary policy based on negative interest rates and massive purchases of public debt.
But the fall of the yen, which is at its lowest level in more than twenty years against the dollar and the euro, is making imports more expensive, degrading competitiveness and maintaining the rents, while the population is feeling the effects of the rise in prices after thirty years of decline. It is no longer time for devaluation but competitive revaluation.
Fumio Kishida will therefore have to decide on key issues for the future of Japan. He has already decided to strengthen Japan's energy and industrial sovereignty by restarting nuclear reactors with new safety standards, planning the construction of three new power plants, and investing in supply chains and the production of essential goods, from semiconductors to health.
He will determine the continuation or reorientation of Abenomics with the appointment of Haruhiko Kuroda's successor as head of the Bank of Japan. He will continue to defend the principle of a free and open Indo-Pacific but will have to take a position on support for Taiwan, the center of the rivalry between China and the United States. Above all, he will have to decide on the revision of the Constitution, which is essential to meet the stated objective of aligning with the NATO standard of devoting 2% of GDP to defense.
Shinzo Abe disappeared at the same time as the Japanese were converting to his vision of a stable, strong, and efficient state, capable of defending the sovereignty of the Archipelago in an Asia that has become the most prosperous and dangerous region in the world. With the paradox that everything Shinzo Abe fought for is only made possible by Vladimir Putin and will have to be achieved by Fumio Kishida, whose conception of politics and style are the antithesis of his own.
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