Overview of Foreign Policy, Security and the Economy
In August 2020 Prime Minister Shinzo Abe announced that he was stepping down from his posts as prime minister of Japan and head of the Liberal Democratic Party (LDP) due to persistent health issues. Abe assumed his post in December 2012. Nonetheless, this was his second term of a total of four terms as prime minister of Japan. His first term began in 2006, lasting just a year until 2007, when he stepped down for the same reason – health issues. However, in 2007 Abe was largely losing support due to financial scandals linked to his cabinet members.
Therefore, his second term began in 2012 with the resignation of Prime Minister Noda from the opposition Democratic Party of Japan (DPJ), which had been in power since 2007. Abe was initially viewed slightly unfavourably among the Japanese population, primarily due to scandals during his first term and his somewhat hawkish foreign policy towards neighbouring nations, especially China and South Korea. His regular visits to the Yasukuni shrine, which also venerates A-class war criminals, and the nationalisation of the Senkaku Islands led to large-scale anti-Japanese protests and opposition in China. The impact of the 2012 anti-Japanese protests forced numerous Japanese businesses to relocate from China to other countries. Abe has since focused on strengthening economic and security cooperation with ASEAN nations.
Until 2012 the relationship between the US and Japan had not been particularly favourable either. Especially during the Hatoyama administration (DPJ), the issues of relocating the Futenma airfield and the policy of the new “East Asia Community” were contrary to the East Asian strategy of the US, causing increasing disagreement between the Obama administration and Hatoyama's cabinet. Abe has significantly revived the US-Japan alliance. The Japanese policy of strengthening and widening this alliance, particularly Japan’s interest in cooperating in the development and assembly of the F35 fighter in 2013 and the US-Japan Joint Vision Statement of 2015, revived Japan-US cooperation. The announcement of the Belt and Road Initiative by President Xi Jinping of China in 2014 further helped to revive and strengthen the US-Japan partnership. Abe’s policies towards the European Union (EU) focused predominantly on economic cooperation. In 2018 the EU and Japan signed the Japan-EU Economic Partnership Agreement, and also signed the Strategic Partnership Agreement in the same year.
In contrast, Abe's diplomatic and political failures include no resolution of the so-called Northern Territories' dispute with the Russian Federation over the Kuril Islands, due to Japanese criticism of Russia's annexation of Crimea. Still, significant progress was made through joint projects between Japan and Russia regarding infrastructure development on the islands. With South Korea, the inability to resolve matters that included the issue of comfort women, the Takeshima/Tokdo Islands dispute, and the 2018 radar lock-on incident drove Abe to assume a policy of strategic neglect, on the grounds that Japan has already taken the necessary steps to resolve these issues and could not, therefore, do more. Simmering disputes with North Korea involved nuclear and abductees issues.
In the area of security, Abe’s cabinet has enacted bills and legislative amendments permitting Japan to exercise collective self-defence. This substantial change in the government’s constitutional interpretation of the right to collective self-defence, which had been in place since 1972, allows Japan to engage in combat to defend an ally. To ease unfounded concerns that Japan is resuming a militaristic doctrine, at the 2014 Asia Security Conference Abe stressed the rule of law, the prohibition of the threat of the use of force, and the peaceful resolution of conflicts, which earned him substantial support from other Asian nations. Abe also managed to maintain a neutral stance for Japan towards Middle East countries by, for example, inviting Iran’s President Hassan Rouhani to Tokyo in 2019 and trying to mediate between the US and Iran to resolve the US-Iran nuclear dispute.
In 2012 Prime Minister Abe announced three fundamental economic policies that came to be known as the three arrows of the so-called “Abenomics”.
The basic idea of Abenomics is to achieve economic recovery through a trickle-down effect. Abe aimed to increase large companies' profits, which would subsequently increase the profits of small and medium-sized businesses. This was an enormous success that led to a sharp rise in stock prices since 2012. Additionally, Abe's policies further helped to decrease the unemployment rate from 4.5 per cent in 2012 to 2.2 per cent at his retirement. The biggest issue for Japan after the asset price bubble burst in 1991 was deflation. Between 2000 to 2012 the inflation rate was around -0.295 per cent, marking the country’s apparent fall into a deflationary spiral. Abe’s three arrows policies set a target of 2 per cent inflation per year. From 2013 to 2019 inflation rate rose to around 0.88 per cent annually, and therefore did not reach the original target of 2 per cent, but did remain in positive territory. Abe's economic missteps include a consumption tax increase in 2019 from 8 to 10 per cent, which, together with the COVID-19 crisis, made the inflation target of 2 per cent effectively unachievable.
As of 14 September, as predicted, the chief cabinet secretary, Yoshihide Suga, became the next prime minister of Japan. During Abe's first term in office Suga served as minister of internal affairs and communications and minister for the privatisation of the postal services. In the September 2020 LDP presidential election Suga overwhelmingly won the majority of support and thus became the next prime minister. He will remain the LDP's head until October 2021, which was the initial term for Abe’s cabinet. Therefore, the shortest possible term for Suga as prime minister is from October 2020 to October 2021. It is improbable that Suga’s policies will diverge substantially from those of Abe’s; however, the results of the US presidential elections might significantly affect Japanese policies towards China. Even after his resignation, Abe remains a member of the Diet. Together with Taro Aso (the current deputy prime minister), Abe will undoubtedly attempt to ensure that the new prime minister does not stray too much from the policies he (Abe) had launched during his term in office, especially in the area of national security.