A few weeks ago Parliament Street blogged about how Japan’s Prime Minister Shinzo Abe’s aggressive economic strategy of loose monetary policy, heavy fiscal stimulus and radical liberalisation of the economy might not be living up to the hype, at least on the liberalisation front. The concern was that the necessary reforms were being blocked by special interests, not least because of upcoming elections which Abe’s Liberal Democratic Party, and its junior coalition partners, New Komeito, needed to do well in to secure a majority in Japan’s upper house.
Well, it worked. The ruling coalition reportedly won at least 76 of the 121 contested, meaning both houses will be under the control of the Government for the first time in six years.
Given that Japan has not been shy in recent days about giving advice to Britain regarding an EU exit perhaps Abe might be willing to listen to some advice himself. The Prime Minister should use the momentum from this victory to complete the reforms he promised. Abenomics would still be a huge gamble if executed perfectly. If done half-heartedly it is difficult to see how they would succeed.
The damage done by a Japanese collapse would be at least as bad for the world economy as the worst predictions of a Brixit. Abe needs to seize this opportunity while he can.
