Friday, June 14, 2013

How long will the Japanese people support Abe (and Abenomics)?

The most remarkable contrast between Abe Shinzō's tumultuous first term as prime minister in 2006-2007 and his current term is the degree to which Abe has been able to rely on significant public support. By this time in his first government — approximately five-and-a-half months after his inauguration — Abe's disapproval rating had surpassed his approval rating and would remain that way en route to defeat in the upper house election in July and resignation in September.

This time around his support has remained buoyant: in the latest round of poll his approval rating is 67% in Yomiuri (jp), 62% in NHK (jp), and 59% in Asahi (jp). The reason for Abe's popularity is apparent. The Japanese public has embraced Abenomics.

As the data from Asahi's monthly polls shows, Abe's popularity overwhelmingly rests on the popularity of his policy program. The Japanese people did not suddenly fall in love with Abe or the LDP in December 2012, but rather responded with enthusiasm when presented with a government that appeared to be serious about overcoming Japan's prolonged economic stagnation. Arguably, Abe has also benefited from lowered expectations, thanks to the poor performance of his DPJ and LDP predecessors, who struggled both to articulate and to execute policies to revitalize and reform Japan's economy. Support for Abe and Abenomics seems to be based less on calculations about the virtues of the "three arrows" when it comes to improving economic conditions and making life better for Japanese households than a kind of naive optimism that the government is working. As Asahi's monthly poll has shown, respondents have wavered when it comes to their belief that Abenomics will result in higher wages and more hiring.

Simply put, the Japanese public seems willing to give Abe the benefit of the doubt.

It bears asking, however, how patient the Japanese people will be. Asahi's June poll contained some hints that the public is beginning to lose faith in Abe's program. When asked whether they believed that Abe's economic policies "hold promise for growth in the Japanese economy," only 51% of respondents said they did, which, while still a majority, is the lowest number since January, when the Japanese people were still figuring out what the Abe government planned to do. In the same poll, when asked whether they've personally felt economic recovery since the outset of the Abe cabinet, only 18% said they had, as opposed to 78% who said they had not. Obviously a sizable portion of the latter are still optimistic that Abenomics will result in recovery, but there does seem to be growing doubts about the efficacy of the Abe government's policies.

The next month may be particularly challenging for Abe. Abe and the LDP are kicking off campaigns for Tokyo assembly elections and next month's upper house elections in the wake of volatile market activity that has raised questions about the efficacy of Abe's policies. But more importantly, during the campaign the Japanese public will probably hear more criticism of Abenomics than during the first six months of the second Abe government. The DPJ may be unable to prevent the LDP from winning a majority in the upper house, but if they hammer Abenomics every day, across the country from now until the election they may sow more doubt among the Japanese people, which, if combined with more market volatility, could seriously undermine Abe's public support. Abe could win the election and still see his approval rating erode. For this reason, perhaps the LDP is right to be worried, as this Asahi article (jp) suggests some members are. Because as Abe's support erodes, the likelihood of intra-LDP turmoil and jockeying for position by potential rivals increases, which could force Abe to change course in the fall as he tries to get pieces of his growth strategy through the Diet.

Everything, in short, depends on retaining strong public support, which in turn depends on Abe's policies delivering tangible results. And if tangible results aren't possible, as some skeptics suggest? Then the Abe government may be shorter lived than seems possible now.

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