ABE's COURSE

Japanese Prime Minister Shinzo Abe's ruling coalition of the Liberal Democratic Party and the right-centre Komeito Party triumphed at the snap parliamentary elections.  The coalition obtained 326 out of the 475 seats in parliament with a record low post-war turnout of just over 52 per cent. As a result, the Liberal Democratic Party obtained 290 seats. The Democratic Party again suffered a crushing defeat winning only 73 seats and the Communist Party of Japan only 21 seats. So, the House of Representatives of the Japanese legislative body has the right to adopt laws and choose a prime minister (he will be the leader of the party that gains a majority), and Shinzo Abe automatically keeps his post of prime minister.

Observers believe that the low turnout was more than indicative of the fact that the Japanese electorate is disillusioned with the current policy of the country's leaders. However, Abe himself is confident that society has none the less expressed faith in his economic policy which the government has been wrestling with for over two years. The purpose of Abe's course, which the people have dubbed "Abeconomics", is to overcome the 20-year deflation and provide economic growth. This is due to be achieved by various measures, including raising the interest rate on loans and serious financial injections in industry, trade and state bonds.

At the beginning of this year the Japanese authorities decided to raise consumer tax from 5 to 8 per cent. Now it is expected that consumer tax will be increased to 10 per cent in the spring of 2017, which is an extremely unpopular decision, and the government is trying to defer it. Reforms in Japan have become bogged down and, as experts are pointing out, it is only the rich players who have benefited from the growth in the stock market, whereas the incomes of most people have either remained at the old level or gone down. Japan is among the most developed economies in the world but its rating, based on per capita income, has fallen below, for example, Britain and the US. The means of increasing manpower have not yet been found, especially bearing in mind that Japanese society is aging rapidly. Demography continues to remain a most serious source of the Japanese economy's problems. Therefore, it is not surprising, as the Asahi Shimbun newspaper reports, that only 39 per cent of Japanese support the policy of the present cabinet. The level of support for Shinzo Abe has fallen sharply since 2012 when he became prime minister for the second time. Various public opinion polls have also shown that most people did not understand why the prime minister needed snap elections and what has changed as a result of them.

Meanwhile, apart from the economic situation, the head of the cabinet is also trying to adapt the country to the changing correlation of forces in the Asia-Pacific region, which of late has been characterized by a relative weakening of America's leadership and a sharp build-up in China's economic and military influence. Japan, which is in a state of stagnation, and has yet to recover from the consequences of the devastating earthquake and tsunami of 2011, is trying to compete with Beijing.

Tokyo is particularly displeased by China's recent integration initiatives to create a Silk Road economic zone (Silk Road Fund) and an Asian Infrastructure Investment Bank (AIIB, with a head-office in Beijing, is due to emerge at the end of 2015), and also a BRICS Bank. Through its Silk Road project China plans to invest tens of billions of dollars in the infrastructure, including transport, both surface and maritime. Many see in this a threat to the financial-economic system which has been developed in this part of the world by Japan and the West and are also comparing China's plans with the European Recovery Programme. Such financial structures as the Asian Development Bank (ADB), set up back in 1966, the main founders of which were Japan and the US and which time after time has been led by Japanese, are watching Beijing's moves with particular apprehension. It would appear that the ADB and the AIIB will be competing, or rather are already competing, for the same projects. Tokyo is also trying to counter China's wish to occupy a commanding position in the railway construction market in the region and has even created an organization to support transport and urban projects abroad. Japan does not want be a passenger in the Chinese train for the development of the region, which China's leader Xi Jinping spoke about at the recent APEC summit. But she is even less pleased at the prospect of the yuan become an international currency in the future. The "Chinese Dream", however, is slowly, but surely turning into an "Asian Dream". As Xi Jinping stressed, "it is the peoples of Asia who must control Asia's affairs and maintain Asia's security". Incidentally, in this context it is very interesting to see how Japan will behave in relation to Russia which has concluded large-scale energy contracts with China and is trying to become involved in China's plans for Asian integration, including via AIIB and the BRICS Bank. At the end of spring 2014 Abe made it clear that he wants to maintain a dialogue with Russia, even though Tokyo condemned Moscow's actions against Ukraine, and Japan signed up to the sanctions imposed by the US and Europe. 

However, alongside the economic situation there are always questions of security. And it is here that China sometimes feels not so confident. Beijing is constantly seeking ways of restraining the US in the Taiwan Strait and the South China and East China Seas like, for example, imposing an air-defence identification zone covering disputed territories, which has caused a negative reaction from the US, Japan and South Korea. The introduction of the zone means that aircraft flying over it must now notify the Chinese authorities in advance. It is against this background that Japan is trying to overcome the restrictions imposed on the country following its defeat in the Second World War and to create a full-scale army. Shinzo Abe has announced a plan for the "reinterpretation" of Japan's pacifist constitution which will enable Tokyo to go beyond the line of self-defence and lift the ban on the use of Japanese troops for combat missions abroad, whereas since the Second World War Japanese soldiers have only taken part in humanitarian rescue missions which do not require combat. However, the situation is now changing. In April this year Shinzo Abe's government opted out of an almost half-a-century ban on the export of weapons and military technology which, of course, was also dictated by a desire to open new markets for Japan's defence enterprises. Unsurprisingly, the US supports these efforts, whereas China and South Korea oppose and criticize them.

The lifting of the ban on exports makes it easier for Japan to provide military aid to the less developed countries of South-East Asia who also are unhappy at China's claims to disputed territories in the South China Sea - the Philippines, Vietnam and Indonesia. Japan is trying to provide maritime aid to Vietnam which has a territorial dispute with China over oil wells, and the Filipino coastguard has received ten patrol boats from Japan. Indeed, the majority of China's neighbours, although they want to obtain preferences from the Chinese economy, still fear Chinese hegemony and are therefore forced to strike a balance between Tokyo and Beijing. So it may be said without exaggeration that the future development and stability of the Asia-Pacific region depends in many ways on how confident Japan feels, both economically and in its foreign policy.