A Japan that can say ‘yes’

Abstract

After two decades of stagnant growth and the Fukushima triple disaster, Japan appears more confident both domestically and internationally. The economy has been inflated, much-needed social change is being discussed and progress is being made, and international diplomacy is once again active. Slower growth is to be expected with an ultra modern economy that has a shrinking population. And Japan has continued to contribute to the peace and stability of the region, underpinned by the US alliance and the Article 9 peace clause of its constitution. As the last East Asia Forum Quarterly on Japan in 2012 concluded, if Japan was thought to have had two lost decades since the bubble burst in the early 1990s, perhaps we need to rethink what failure is. Japan is secure, rich and prosperous. What has changed in the last 18 months is the renewal of Japanese confidence. The economic policy package of Prime Minister Abe—Abenomics—is bold and defines a clear strategy for economic growth. What is still to be seen is whether the difficult reforms necessary for the success of this strategy will be delivered. As many authors in this issue detail, Japan needs to transform how women and foreigners are treated, open up protected sectors to competition and to rethink many of its institutions. The jury is still out and the longer we have to wait for those reforms to be put in place, the larger the risks to the economy from the first two arrows of Abenomics: the printing and spending of money. Signs of weakness are beginning to show in the recovery. In the international arena confidence manifests itself in Japan’s strengthening alliances and its chipping away at Article 9 of the constitution. A real test for Abe and Japan moving forward will be managing the relationship with China, which has until now been dismal. Despite anxieties over whether the economy and society can live up to these new ambitions and the changes to Japan's security posture and place in the world, there is more evidence here of a Japan that can say ‘yes’. Show more