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Asia

Japan's Abe seeks new mandate for his economic policies

A day after Japan slipped into recession, PM Shinzo Abe said he would hold new elections before the end of the year - a move aimed at getting a fresh mandate for his economic policies, as analyst Kristin Surak tells DW.

Less than two years after he swept to power on promises of reinvigorating the economy with his "Abenomics" - a combination of monetary, fiscal and structural policies - PM Shinzo Abe said he would call a general election before the end of 2014, about two years ahead of schedule. In a news conference after a board meeting of his Liberal Democratic Party (LDP), the Japanese leader said he would dissolve the House of Representatives - the lower house of parliament - on November 21. The prime minister failed to give a date for the poll, but analysts expect the vote to be held in mid-December.

Abe also announced his decision to delay the second sales tax hike to 10 percent - planned from October 2015 - until 2017. "Today, I reached a conclusion that I will not raise the consumption tax to 10 percent in October next year... and that it should be delayed by 18 months," Abe said.

The announcement comes a day after data showed the Japanese economy fell into recession for the third time in four years. The world's third-biggest economy unexpectedly shrank for a second consecutive quarter. The latest contraction followed an initial sales tax increase in April to eight percent from five percent. The government already has majorities in both houses of the legislature and popularity ratings far ahead of the opposition.

Kristin Surak

Surak: 'Abe hopes to benefit from the weakness of a divided opposition'

In a DW interview, Kristin Surak, a senior lecturer in Japanese Politics at SOAS, University of London, says that by calling snap elections PM Abe is trying to get a fresh mandate for his economic agenda, and is also hoping to benefit from the weakness of a divided opposition.

DW: Why did Shinzo Abe call snap elections? Is he hoping to cement his grip on power before his voter ratings slip further?

Abe wants to shore up his position within the LDP as he delays the implementation of the planned sales tax increase and pushes on with the remainder of his agenda. Party infighting has blocked key parts of his plans to promote fiscal flexibility and reduce corporate taxes, and the LDP is not forming a united front on the TPP negotiations.

Fiscal hawks within the party and at the Ministry of Finance don't want to delay the planned rise in the sales tax, which they see as critical for containing the country's debt burden. Big businesses are also concerned. They have been promised a cut to the corporate tax rate, which may be threatened if other taxes sources are not increased.

With a renewed mandate, the PM may be able to face down challenges within and outside his party and postpone, or even jettison, the consumption tax increase. However, the public is strongly opposed to an increase that will further erode diminishing real wages. They saw a three percent increase in the sales tax in April – a hard hit on pocket books when incomes are not following suit.

Given the fresh bad news on the economy, isn't it a risky time to call snap elections?

The economic figures are grim. Yesterday, it was announced that economy had entered into a technical recession after it contracted by an annualized 1.6 percent in the September quarter. Last week, Abe met with Koichi Hamada, the key designer of Abenomics, who cautioned the Premier to drop the tax rise altogether. By delaying the sales tax rise until April 2017, as he is now proposing, Abe will keep the shrinking economy from hitting consumers as badly as it might otherwise.

But Abe is looking at the political landscape as well, and hopes to benefit from the weakness of a divided opposition. Though the LDP has the support of only 37 percent of the voting public, its closest rival, the DPJ, musters only eight percent. Smaller parties continuously bubble and disappear without building momentum. Still, about 40 percent of the electorate is unaffiliated, and the PM risks losing them to alternatives if they voice frustration with his performance at the ballot box. Three-quarters of the populace disprove of the snap poll itself, and the same proportion is against a tax increase.

How do you see Abe's chances of winning a stronger mandate in these elections, especially after the recent scandals involving some of his ministers?

The scandals in recent months have been an embarrassment. In August, Abe hit the headlines by appointing five women to his cabinet, but last month two of these new appointees in key posts – Yuko Obuchi at the Ministry of Economy, Trade, and Industry, and Midori Matsushima at the Ministry of Justice – stepped down in the wake of funding scandals. Compounding the embarrassment, Obuchi's replacement, Yoichi Miyazawa, come under fire after only a week in office when members of his staff were exposed for using political funds to pay for S&M clubs.

Adding to Abe's difficulties, Okinawa just elected a new governor, Takeshi Onaga, who is strongly opposed to US military base expansion on the island. Such challenges are common within Japan, however, and the voting populace will probably stay focused on their pocketbooks in the upcoming election.

Japan PM Shinzo Abe addresses parliament on 26.11.2013

Surak: 'The scandals in recent months have been an embarrassment'

Who would be Abe's main contenders in the upcoming poll and what are their chances?

Abe's approval rating plummeted over the last month from 52 percent to 44 percent, but rivals are yet weaker. Banri Kaeda leads the Democratic Party of Japan, which is the main opposition group, but currently enjoys about 8 percent support - LDP support is approximately four times as strong, giving it a firm lead unless undecided voters do not line up behind the ruling party.

What are likely to be the main issues in these elections?

The immediate focus of the elections is on the delay in the sales tax increase and the final elements of the Prime Minster's Abenomics package. However, a renewed mandate has side benefits for him as well. Abe's goal to transform Japan into a "normal nation" by turning the nominal Self Defence Forces into a full-fledged army has been unpopular with the public. Furthermore, the majority of the people do not support a revision of the Constitution, which Abe wants to implement. A fresh mandate could help him push this controversial agenda while protecting against losses in the local elections slated for April 2015.

Kristin Surak is a senior lecturer of Japanese Politics at SOAS, University of London. She specializes in international migration, nationalism, culture, and globalization.