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AGENDA
○ Economic reform and recovery—not constitutional
change—are key to his historic legacy
THE BLOOMBERG VIEW
For more commentary, go to
bloomberg.com/opinionILLUSTRATION BY CRISTINA DAURA
After his victory in an internal vote on Sept. 20 to lead Japan’s
ruling Liberal Democratic Party, Prime Minister Shinzo Abe
looks set to remain in oice till 2021—longer than any Japanese
political leader since the days of the samurai. He still has a lot to
do in this third and last term, and he shouldn’t waste his time.
Because of scandals, Abe’s popularity isn’t what it was.
Nonetheless, he’s granted—and deserves—credit for keep-
ing some of his promises. His three-pronged “Abenomics”
program, built around loose monetary policy, iscal stimu-
lus, and structural reform, has gotten results. The economy
has grown steadily if modestly for 9 of the last 10 quarters.
Unemployment is near a 25-year low. Wages are creeping up.
Abe rescued the Trans-Paciic Partnership after the U.S.
withdrew, and the free-trade agreement he signed on July 17
with the European Union is the world’s biggest. As a result,
the outlook for exports—trade wars permitting—is good. Labor
market reforms have drawn women and foreign workers into
an otherwise dwindling workforce. Corporate governance
reforms have begun to improve Japan Inc.’s returns on equity.
Even so, Abe has often retreated in the face of political
opposition, preferring half measures to the bolder changes
that are needed. Eforts to boost wages, and hence consumer
What AbeOwes Japan
spending, have been largely inefective. About 40 percent of
jobs are part-time, ofering little in the way of security or ben-
eits. Women are being shunted into such lower-paying work.
Almost three-quarters of Japanese companies have no female
managers. Low-skilled migrants ind it easier than before to
work in Japan, but they can’t bring their families and can’t
immigrate permanently.
Everyone from Bank of Japan Governor Haruhiko Kuroda
to the International Monetary Fund recognizes that monetary
and iscal stimuli alone aren’t enough. Structural reforms are
needed, too. With no more elections to ight, Abe no longer
has an excuse to hold back. Trade tensions, which threaten
Japan’s export-led recovery, make action urgent.
Seniority-based lifetime employment chokes of mobility
and helps suppress wages. The system needs to be changed.
The economy could use more foreign workers and in more
sectors of the economy. To get them, the government ought
to grant permission to settle permanently. Better incentives
are required for companies to create additional full-time jobs,
share more proits with workers through higher wages, and
hire and promote women and other outsiders to boardrooms.
There’s further work to be done on deregulation, promoting
entrepreneurship, and reviving regions outside Tokyo.
Abe shouldn’t spend his limited political capital on a quix-
otic quest to revise Japan’s constitution. He says change is
necessary to legitimize the country’s Self-Defense Forces. The
real prize would be to complete the economic program that
he’s championed and knows is essential.
The U.S. Supreme Court goes into session on Oct. 1, just
days after nominee Brett Kavanaugh was set to face Senate
questions on alleged sexual assault. In its first week, the
court will hear cases on capital punishment of the mentally
impaired and the National Sex Ofender Public Registry.
⊲ The first round of Brazil’s
presidential election takes
place on Oct. 7. With 13
candidates on the ballot,
the vote will likely proceed
to a runof on Oct. 28.
⊲ India plans to start
subsidizing sugar
production as of Oct. 1, in a
bid to make exports more
afordable and shrink its
domestic surplus.
⊲ The separatist Parti
Québécois is headed
toward its worst showing
in 50 years in Quebec’s
Oct. 1 provincial elections,
polls show.
⊲ Theresa May addresses
the annual Conservative
Party Conference on Oct. 3.
Her performance there may
be crucial to avert a coup
within the party.
⊲ Verizon rolls out its first
consumer 5G wireless
service in four U.S. cities—
Houston, Indianapolis,
Los Angeles, and
Sacramento—on Oct. 1.
⊲ Weight Watchers is
overhauling its brand,
changing its name to WW
and relaunching its app on
Oct. 4 to better encourage
daily interaction.
⊲ The Supremes Reconvene
Bloomberg Businessweek
October 1, 2018