POLITICS Bloomberg Businessweek November 25, 201937lame-duck period before his latest three-year term
as head of the LDP ends in September 2021. He’s
said he won’t seek a rare fourth straight term atop
the party; however, he also said that about run-
ning in 2018.
Until now, economic health has been the key to
Abe’s political health, says Ichita Yamamoto, who
served two years in Abe’s cabinet beginning in 2012.
“I think we are going into a difficult time,” he adds.
Trade tensions have hurt Japan’s growth, which
decelerated sharply in the third quarter to an annu-
alized pace of 0.2%, from 1.8% three months earlier.
Abe and his ministers have increasingly focused
on unemployment as their preferred measure
of economic strength. A program of unprece-
dented monetary stimulus known as Abenomics
has helped reduce the unemployment rate from
4.3% when he took office to 2.4% in September,
hovering just above a 27-year low reached in July.
Reforms aimed at reducing income inequality have
also helped Japan avoid the deep internal divisions
afflicting wealthy places from the U.S. to the U.K.
to Hong Kong. Meanwhile, the Nikkei stock aver-
age has more than doubled since Abe took office.
On foreign policy, polls show that voters
approve of his hard-line approach to relations with
South Korea, as well as his efforts to maintain ties
with U.S. President Trump via rounds of golf and
hamburgers—though that was before Foreign Policy
reported that the White House demanded a four-
fold increase in financial support for U.S. troops
stationed in Japan. North Korean nuclear tests and
China’s growing military might have helped quiet
opposition to Abe’s reinterpretation of Japan’s post-
World War II constitution, which bans the exercise
of war, to expand the role of the military. Having
inherited a standoff with China over islands in
the East China Sea, Abe now hopes to welcome
President Xi Jinping on a state visit in the spring.
Domestically, the prime minister gave himself
greater control over government appointments by
pushing a new Cabinet Bureau of Personnel Affairs
through the Diet in 2014, which has enabled him to
keep his bureaucrats tightly in line. Learning from
a damaging sales tax hike in 2014, he introduced
measures to offset the effect of a second increase
this year. In perhaps the biggest stroke of luck, the
opposition has failed to regroup from its election
defeat, remaining weaker than it’s been for decades.
While there’s still a disgruntled constituency
of Abe foes who could be galvanized by the right
opposition leader—a feat Tokyo Governor Yuriko
Koike almost pulled off in 2017—Abe’s successor will
most likely come from within the LDP. A November
poll by the Yomiuri Shimbun showed Abe’s supportTHE BOTTOM LINE Abe’s party has yet to designate a successor,
leaving much of its direction up in the air should the long-serving
prime minister not win or accept a fourth term.at a respectable 49%, despite a series of festering
scandals in his cabinet.
According to one former minister, the LDP’s
leadership choice may be swayed by the results of
the 2020 U.S. presidential election. “Who is going
to deal with that Mr. Trump?” asks Takeshi Iwaya,
who served as defense minister under Abe until
September. “Whatever the rights or wrongs of it,
you can’t be prime minister of Japan unless you
can maintain good ties with the U.S.” If Trump
wins reelection, the party may be more inclined
to give Abe another mandate rather than risk a
change in leadership.
Many lawmakers expect Abe to call an election
early next year while his support is still robust. But
he could step down even if he wins, most likely at
some point after the 2020 Olympics in Tokyo, intro-
ducing more uncertainty as the economic outlook
turns gloomy.
“A decline in demand for workers in Japan’s
manufacturing, wholesale, and retail sectors
put a dent in a job market that is still very tight,”
said Bloomberg economist Yuki Masujima after
September’s unemployment number came in
slightly higher than expected. “Some sources of the
weakness are temporary, some potentially more
persistent.” Abe’s government has so far made lit-
tle progress on structural reforms aimed at making
Japanese businesses more competitive.
Abe has singled out his former foreign minister,
Fumio Kishida, as a future leader. With a low pub-
lic profile and no clearly delineated policy goals,
Kishida could be a stopgap enabling Abe to return
to the top job at a later date. If the party selects
former Defense Minister Shigeru Ishiba, who nar-
rowly lost the leadership contest to Abe in 2012 and
has distanced himself from his rival, that could be
read as a desire for a cleaner break from Abe’s leg-
acy. Environment Minister Shinjiro Koizumi, the
38-year-old son of a former prime minister, has
often led in surveys asking people who they want to
succeed Abe, but is generally seen as too young to
get the job in Japan’s senior-centric political system.
“Not many people are supporting Abe enthusias-
tically—it’s just that they can’t think of anyone else,”
says Katsuya Okada, who was deputy prime min-
ister in the Democratic Party administration that
immediately preceded Abe’s 2012 return to power.
The sense of inevitability surrounding Abe depends
on the global economic environment, Okada says.
“If conditions become harsher, that could change
greatly.” —Isabel Reynolds, with Emi Nobuhiro○ AbeKIYOSHI OTA/BLOOMBERG