Shinzo Abe’s 2020 vision for a ‘new Japan’ should worry Japanese, and the whole region

Supporters say he wants to claim “his place in history”, which is why he set so much store by winning the Olympics for Tokyo in 2020, and is getting his Liberal Democratic Party (LDP) to change its rules so that he can still be prime minister when Japan hosts the world.

Rule change could make Shinzo Abe the longest-serving leader in Japan

Abe claims 2020 will see the birth of a “new Japan” following revisions to the constitution. He should beware: Japan is a complex country carrying the heavy burden of history. The real problem is that Japan needs new thinking, and needs to be aware of its place in the modern world and of what the world thinks of Japan.

Part of Japan’s tragedy is that there are few alternative voices questioning policies and exploring new options. Japan’s establishment is rooted in the stodgy past, determined to preserve old privileges. The analogy of the frog luxuriating in warm water, not realising it is on the way to boiling, rings true for Japan. Years of quantitative easing have sent its stock market to a high 21st-century plateau; it has helped to keep the yen soft and boosted export growth as the leading factor keeping growth positive.

Abe has relied on the Bank of Japan to do the job with monetary policy, but put aside the fiscal arrow in postponing a consumption tax hike. Economists say the 8 per cent tax will have to go to 20 per cent or higher for Japan to wrestle its budget back into balance. Also, he tried to sharpen the third arrow of structural reform but has failed to release it. Reforms in corporate law, agriculture and deregulation don’t go far enough to upgrade the economy to face a 21st-century global marketplace.

Suggestions of injecting youthful dynamism into the economy through migrant workers inevitably fail because Japan must keep its population and culture pure.