Japan’s Prime Minister Shinzo Abe and his liberal-democratic LDP have missed their goal of achieving a two-thirds majority in the elections to the House of Lords, the second chamber of the Japanese parliament, together with their coalition partner Komeito. The government now has 141 of the 245 seats, including the seats not standing for re-election this time. Even with the votes of the conservative „Renewal Party“, which now has 16 seats, the two-thirds majority of 164 would be missed. With this, Abe must say goodbye to his long-cherished plan to bring about a change to the pacifist constitution.
According to the statutes of his party, Abe has to resign from the LDP presidency in two years‘ time and thus also from the office of head of government. Perhaps the result of the recent elections to the House of Lords is also the chance that foreign policy issues and the discussion about the character of the Japanese armed forces will not gain more importance in government work until 2021, to the detriment of important economic issues. After all, the „Abenomics“ reform project has only been imperfectly realized. Abe has now downplayed the election result. It would have been more important than anything else for him to ensure economic and political stability. The fragmented opposition would not be in a position to do so. Stability – but this also sounds like a renunciation of politically risky maneuvers and reforms.
Interestingly, all five major opposition parties were against raising the consumption tax on 1 October. Abe and his coalition partners had argued that the increase was necessary in order to have sufficient government revenue in the future due to the long-term burdens on the pension fund resulting from the country’s ageing population. This was also part of his stability promise. However, the tax move will probably intensify the fear of recession in Japan in the short term. Whether Abe cancels the move in the end will also depend on whether the USA will stick to the threatened „punitive tariffs“ against imports from Japan. Japan’s carmakers in particular would be hit particularly hard and put a strain on the economy.
From an economic point of view, it would be best if Abe used the absolute majority that he now has in both chambers of parliament to bring the Abenomics to a meaningful conclusion in his remaining time as head of government. These include the overdue reforms of the labour market and further liberalization of the domestic economy. This would earn him merits that extend far beyond his active reign.