Abenomics on campaign front line

Abenomics on campaign front line

Friday's dissolution of the House of Representatives marked the de facto start of campaigning for the ruling and opposition parties, with Abenomics, the economic strategy of Prime Minister Shinzo Abe, expected to be the main issue in a fierce campaign battle.

General election campaigning is set to begin officially on Dec 2, and the vote itself will be held Dec 14.

Heated battles are expected between ruling and opposition parties. The ruling camp is likely to emphasise the economic achievements delivered by Abenomics, and their intention to continue associated policies, while the opposition plans to highlight the negative impacts of a fiscal package that has led to what some may describe as an excessively weak yen.

"We have worked for an economic recovery and against deflation under a coalition agreement. It's important to proceed further with [Abenomics]," said Natsuo Yamaguchi, leader of Komeito, junior coalition partner to the Liberal Democratic Party.

The gist of the LDP's election pledge, distributed Friday to would-be candidates, clearly shows the party's intention to use concrete data in presenting to voters the achievements of Abenomics.

Accompanied by the slogan "The only road to economic recovery," the LDP materials draw attention to economic data such as the effective job opening-to-job seeker ratio that reached the highest level in 22 years; a balance of payments for tourism that swung into the black after 44 years; and an increase of about 800,000 in the number of working women, among others.

Such vote-seeking efforts by the ruling party are a reflection, at least in part, of Abe's own intentions, sources have said.

Arrows cast a shadow

The so-called three arrows of Abe's namesake economic programme - monetary easing, increased government spending and a growth strategy - were implemented during the second Abe administration.

Through the policy package, the yen's prolonged and excessive strength was corrected, and stock prices nearly doubled from the period before the LDP regained power.

Nonetheless, some observers have drawn attention to a "dark side" of Abenomics, pointing out that local and small-to-medium sized companies have not benefited from the policies, and that for certain items prices have increased due to sharp depreciation of the yen.

Abe decided to postpone by 18 months the planned increase, to 10 per cent, of the consumption tax rate. Prompted by negative growth in gross domestic product for July-September - an annualized decline of 1.6 per cent and the second straight quarterly drop - his decision also provided ammunition to members of the opposition keen to suggest Abenomics policies have failed.

LDP lawmakers, for their part, are gradually acknowledging some concern.

"Compared to two years ago, the economy has been recovering at a remarkable rate, but now we're at the most difficult stage, in a sense," LDP Secretary General Sadakazu Tanigaki told reporters at the Diet building Friday.

Shinjiro Koizumi, parliamentary secretary in charge of reconstruction, also said the government should make efforts to win voters' trust by listening to concerns voiced about Abenomics.

'Dark side' of policy package

The Democratic Party of Japan and other opposition parties plan to make a point of raising concerns over Abenomics, such as the weakness of the yen.

In their unified campaign pledges released Friday, the DPJ and the Japan Innovation Party introduced proposals for a law stipulating "same work, same payment," aimed at improving working conditions for non regular workers. It seems both parties had in mind a "widening economic gap," believed to be one of the adverse effects of Abenomics.

From October 2012 through December the same year, when the second Abe administration was inaugurated, the average number of non regular workers was 18.43 million. By September 2014, however, nearly two years later, that figure had increased to 19.7 million. A decrease by 30,000 in the number of regular workers through the same period reveals a notable contrast.

Regarding the rate of wage growth, price-adjusted wages decreased by 3 per cent in September. DPJ officials emphasise that these figures show only non regular workers, who are paid less than regular workers, are increasing. The party considers these to be the factors behind a fall in consumer spending, which accounts for 60 per cent of GDP, and a dampened recovery from deflation.

DPJ short on suggestions

In May, the DPJ compiled policies centering on the revitalization of local economies and middle-class households, but in fact the party has yet to propose another economic growth strategy as an alternative to Abenomics.

In addition, the party seems to be falling behind in its preparations to take on the ruling camp in the snap election. By the day of the lower house dissolution, the party's manifesto had yet to be compiled. Release of its election pledges is expected to come later this week.

More about

Purchase this article for republication.

BRANDINSIDER

SPONSORED

Most Read

Your daily good stuff - AsiaOne stories delivered straight to your inbox
By signing up, you agree to our Privacy policy and Terms and Conditions.