Mon July 22, 2013
'Abenomics' Get Vote Of Confidence In Japan
Originally published on Mon July 22, 2013 7:30 am
RENEE MONTAGNE, HOST:
And after years of economic stagnation, Japan is experiencing growing confidence. And voters in Japan handed a big victory yesterday to the ruling party in parliamentary elections. The election gives Prime Minister Shinzo Abe and his ambitious economic agenda known as Abenomics quite a boost. NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: Japan has been mired in economic torpor for years, with anemic growth and falling prices. During that time, governments have come and gone - few have managed to generate as much optimism as Prime Minister Abe. Jeff Kingston heads the Asian Studies department at Temple University's Japan campus.
JEFF KINGSTON: Abe sort of strikes an audacious figure. He has taken on risks. He has revived the stock market. He has sort of helped the Japanese economy regain its mojo.
ZARROLI: Abe has done this through his three arrows agenda. It's a combination of loose monetary policy, increased government spending and structural reforms in the economy. Abenomics is very much in its early stages and yet it has coincided with some promising economic signs. The yen has fallen, which has helped Japan's exporters. Growth has risen and stock prices have climbed. Ritsuko Sato(ph) was shopping in Tokyo yesterday.
RITSUKO SATO: (Through translator) The previous administrations never gave us a feeling about the economy, but this one does. It's very nice. Stocks have gone up and the exchange rate has gone up. So I think it is so far going all right.
ZARROLI: And yet Abe very much has his work cut out for him. He has talked about making major changes in Japan's tightly regulated economy. He wants to end some of the impediments that make it hard to start businesses and loosen labor laws to make it easier to fire people. He has also talked about joining the Transpacific Partnership, a free trade group backed by the United States that would pry open Japan's closed economy. But Temple's Jeff Kingston says these steps will mean taking on a lot of entrenched interests that benefit from the system, like the farm lobby.
KINGSTON: Last year, when the previous prime minister indicated he was going to join these trade liberalization talks with the United States and several other countries, the farmer's cooperative delivered a petition with 11 million signatures saying don't do it.
ZARROLI: Kingston says Abe's job will be a lot harder because many of these vested interests, like the farmers, tend to be members of his own party. But yesterday's election results could well change the political dynamic.
KINGSTON: I think it was a very big and decisive victory for Prime Minister Abe and for his party.
ZARROLI: Matthew Goodman of the Center for Strategic and International Studies says the election has strengthened Abe's hand and could give him the power to take on the system.
MATTHEW GOODMAN: It's going to be challenging and he's going to need to really have the determination to push forward. But he certainly has the political capital now if that's the way he chooses to go.
ZARROLI: For his part, Abe said yesterday's election results represented a vote of confidence in Abenomics. Here he was speaking in a TV interview.
PRIME MINISTER SHINZO ABE: (Through translator) Up till now we have been saying our economic policy was right. Now, we understand it was supported by the people. I suppose people really sense that the economy is getting better. As the employment situation improves, wages will go up, consumption will improve and companies will invest more.
ZARROLI: But Abe also sounded a note of caution, saying the government would have to study economic statistics carefully over the next few months and decide what it can accomplish. Abe has pledged more government spending to stimulate the economy, but Japan has also had to contend with high debt. Abe has managed to raise expectations for Japan's economy, and after yesterday's election the pressure is on his government to show that it can deliver. Jim Zarroli, NPR News. Transcript provided by NPR, Copyright NPR.