mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Japan, Revitalized


By most accounts, Abenomics is working tremendously well for Japan. Analysts and policymakers can debate the financial impact (some say it is working wonders while others deride it as “asset-bubble economics”), but there’s no question that after years of economic stagnation Abenomics is leading a resurgence in Japanese national pride.

Shinzo Abe’s political home, Yamaguchi Prefecture, was an incubator of Japan’s first intense modernization process in the mid- to late-1800s. Back then, there was a popular slogan: “rich nation, strong army”—with a strong economy the country can defend itself from foreign powers. Today, that idea is once again leading the country on a path of revitalization, national pride, and economic and political strength.

On the long-term economic front, analysts are divided on Abenomics. “Economic indicators would suggest the initial stages of Abenomics have been successful,” analysts at Barclays wrote recently, CNN reports. “Abenomics is going almost eerily to plan,” reports the FT. The yen has weakened, making Japanese exports attractive abroad. Japanese companies are reporting better sales. GDP is growing. The stock market is up. But other analysts are not so sure. “Abe is able to claim success in relation to the initial steps of Abenomics. There has been some success so far,” a former senior Japanese official told David Pilling, the FT‘s Asia editor, who calls Abe Japan’s Thatcher. “The substance, however, will have to come from the real economy, from the creation of new industries, the expansion of export industries and the consumer sector, which will come from rising wages.” The “third arrow” of Abenomics is intended to address deep and long-term structural reforms to Japan’s economy.

Abe’s motto is “Japan is back.” “Japan must stay strong, strong first in its economy and strong also in its national defense,” he said in Washington earlier this year. “I consider it both my role and my fate to restore and enrich the power of the nation of Japan,” he later said. So far, this message has resonated with the Japanese public, which voted Abe’s party into clear majorities in both houses of Parliament. His approval rating is still above 60 percent.

So far it has been relatively easy for Abe to push forward with his economic and military plans, but hurdles remain. He faces strong internal opposition to the Trans-Pacific Partnership, an international free trade group, and many Japanese remain concerned about Abe’s more radical ideas about changing the pacifist constitution or rescinding historical apologies for Japan’s wartime errors. Only time will tell if Japan really is on a path to lasting revitalization and robust national pride—and if so, what the implications will be.

Features Icon
show comments
  • Stacy Garvey

    According to a recent Bloomberg story, the percentage of Japanese who have no personal savings increased from 29% to 33% last year, an historic high – the highest percent recorded since the statistic has been kept (1966, I think). Their running a current account deficit and importing all their needed energy. Pardon me, Prof. Mead, but have you been smoking weed? If so, please share.

    • Kavanna

      Yes, the impression I get from Japanese people (both reading and in person) is that Abenomics is all smoke and mirrors. Foreigners are impressed by the stock market (although it’s already peaked) and the decline in the yen. Exporters will do well, at least for a while. That’s about it.

      The increased of energy imports alone guarantees that Japan will never again run trade surpluses. That is setting up the vast Japanese public debt market for a gigantic crisis.

  • Bruce

    Statistically, it appears that Japan is doing well. However, their economic policies consist of printing (counterfeiting) more money on a percentage basis than we are in America. That works until it doesn’t. “That which is not sustainable will end.” They have horrible demographics and does anybody really think that counterfeiting a currency does anything more than buy some time? It may feel good now, but that’s true of a lot of things. It stops feeling good when the consequences appear. Every fiat currency in history has imploded. Japan is just moving up the time when that occurs.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service