Tuesday, July 01, 2014

The War for Japan's Future

THE arrest on May 17th of a Japanese pop star, Aska, for possessing drugs would normally have attracted little attention. Yet the tentacles of the affair reach further. Aska is an acquaintance of Yasuyuki Nambu, founder of Pasona, a temporary-staffing agency. Following the arrest a tabloid newspaper splashed stories about sumptuous parties thrown by Mr Nambu in an impeccably appointed guesthouse in the capital. Besides Aska, revellers included glamorous hostesses and senior politicians from the government of Shinzo Abe, Japan’s prime minister. One was the labour minister, Norihisa Tamura.

Odd as it seems, the scandal is a sign that Mr Abe’s strategy to shake up Japan is at last having an impact: those opposed to his reforms are worried enough to want to try to damage their proponents. The labour market is one of the main battlefields; muckraking journalism, one of the weapons, complain Mr Abe’s advisers.

His opponents are right to fret. This week the government approved a blueprint for structural reforms. After countless false dawns, Japan may at last have the combination of political circumstance and economic exigency to make reform inevitable and, in Mr Abe, a leader with the nous to bring it about. In 2013 he launched a bold, three-part plan to pull the country from its long economic stagnation. Borrowing from a folk tale, he dubbed his changes the “three arrows”. The first was a jolt of fiscal stimulus for the economy, the second an unprecedented monetary boost through massive quantitative easing. The third is a set of radical structural reforms aimed at boosting the economy’s long-run rate of growth.

The most recent Japanese prime minister to dare attempt far-reaching changes was, in 2001-06, Junichiro Koizumi, Mr Abe’s mentor. Now, like him, Mr Abe faces a wall of resistance. Labour unions, farmers, doctors, giant corporations and their supporters among politicians and bureaucrats are uniting in opposition to change.

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