Joseph S. Nye Jr.
Courtesy: Shizuoka Shimbun

Editor’s note: This column by Dr. Nye was written and sent to the Herald prior to the brutal killings recently of two Japanese citizens in Syria, presumably by Islamic State terrorists, who claimed the men were being executed in retaliation for Japan’s participation in the coalition of nations seeking to bring down IS.

When Prime Minister Shinzo Abe attended the World Economic Forum in Davos a year ago, there was international enthusiasm about his economic policies. A growing economy is not only good for Japan; it is good for the United States, and for the rest of the world, as well. With the economy dipping into recession later in the year, however, many worried that “Abenomics” had failed.
With his surprise general election, Abe has a chance to revitalize his program. Another general election is not required for four years, and he has decided to postpone the next rise in the consumption tax until 2017. But the key question is whether he will push faster on the structural reforms that can boost the long run rate of growth. This so-called “third arrow of Abenomics” includes politically sensitive reforms in agriculture, labor market regulations and electricity markets. Reaching agreement with the United States on the Trans-Pacific Partnership trade negotiations can show that Abe is serious about such reforms.

Another issue that is important for long-term Japanese growth is the implementation of Abe’s promises to ease the way for women to balance work and family by increasing state-funded childcare and other measures. With a birth rate of 1.4 children per woman, Japan faces a sharp decline in population. It cannot afford to waste half its human resources. According to Christine Lagarde, the head of the International Monetary Fund, significant steps to close the gender gap could increase Japan’s economic growth by a quarter of a percentage point. Abe has said the right things and set an ambitious goal of having women occupy 30 percent of supervisory roles in business and government by 2020, but he will be hard-pressed to achieve it.

Some outsiders fear that Abe will waste this second chance by indulging the nationalistic impulses of the right wing of his party. They point to his statements about revising the constitution. But Abe has proven to be a pragmatic politician and the fact that nationalists like Shintaro Ishihara did poorly in the election and that Abe’s Komeito coalition partner improved its position should guard against such a danger. They show that the majority of Japanese do not want him to waste this new opportunity on nationalism.

Instead, Abe should persuade the Diet to pass the bills needed to implement the moderate measures his cabinet has proposed to allow Japan to exercise its inherent right to collective self-defense and come to the aid of allies in the event of a crisis. He should also use the forthcoming anniversary of the end of World War II to remind the world that Japan is a democracy that has been at peace for 70 years — at the same time that it has created the third-largest national economy in the world. This is an important source of Japanese soft power.

Now that he has a second chance, Abe has far more to gain by playing an economic rather than a nationalism card.

Joseph S. Nye Jr. is a professor at Harvard University and author of the forthcoming book, “Is the American Century Over?”


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