Japan’s Abe vows ‘painful’ economic reforms after big victory


TOKYO: Prime Minister Shinzo Abe pledged on Monday to push on with painful reforms aimed at fixing Japan’s economic woes after voters handed him a handsome majority in upper house polls.

Abe said victory for his Liberal Democratic Party and its coalition partner New Komeito was vindication of his economic policy blitz mixing big stimulus and aggressive monetary easing.

“We appealed to voters in this election that we will press forward with economic policies.
They back our position after we said this is the way to go and nothing else,” he said.

The landslide victory means both legislative chambers are now under government control until at least 2016, unblocking the bottleneck that has hampered legislation for the last six short-term premiers.

It allows Abe to push through painful structural reforms aimed at dragging Japan out of two decades of economic malaise.

The LDP and Komeito now have 135 of the 242 seats in the house of councilors. The country’s main opposition party, the Democratic Party of Japan, has just 59.
Voter turnout was low, at 52.61 percent.

Although the thumping victory had been expected, investors cheered the outcome, sending the Nikkei index at the Tokyo Stock Exchange up 1.23 percent shortly after the opening bell. It settled back to close up 0.47 percent.

Abe said he would speed up decision-making and policy implementation, attempting to dispel speculation that he might shy away from reforming the labor market and removing trade barriers now elections are out of the way, and turn his attention to pet nationalist projects.

“Without a strong economy, we cannot solidify the fiscal foundation to support social security, and it’s the same for diplomacy and national security. We will focus on this for now,” he said.

Since romping to power in December’s vote for the more powerful lower house, the hard-charging Abe has unleashed a wave of spending and pressured the central bank to flood the market with easy money.

Economists are still divided over the long-term merits of Abe’s project, dubbed
“Abenomics”, which comes at the expense of even more state borrowing at a time when government debt already stands at more than twice the size of the Japanese economy.

A hike in consumption tax next year is on the books as the first step on the long road to overhauling the debt mountain, but—conscious of frightening shoppers—Abe indicated Monday it was not a done deal.

“We will make the final decision this autumn on whether to raise the sales tax based on the economic indices from this April to June,” he said. AFP



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