Japan’s snap elections
Shinzo Abe’s decision to call snap elections only two years into his term perplexed many people. Was it simply cover for a U-turn on a planned rise in consumption tax or was the prime minister seeking a renewed mandate for more radical measures to kick-start growth? Ben Hall discusses what the elections mean for the future of the world’s third-largest economy with Ben McLannahan and David Pilling.
After a frenetic period of travel involving 10 separate trips overseas in the past three months, I am trying to catch my breath, shake off the jet lag and make sense of what I have seen. Leaving aside the big geopolitical themes, one tentative conclusion I have reached is that world leaders and hotel lobbies do not mix.
This first struck at the Ritz Hotel in Madrid as I waited to greet Mariano Rajoy, the Spanish prime minister, who was the guest-of-honour at the FT’s Spain Summit. On one side of the lobby was a bank of photographers and TV crews. I was standing on the other side with a couple of FT colleagues and the hotel management. Rajoy’s limo drew up and we could see him and his entourage heading towards the entrance. Just at that moment, a party of elderly Americans came out of the lift, clad in their trademark tracksuit bottoms and fluorescent visors, and began to totter across the lobby, demanding loudly, “Where’s the coach?” The hotel manager froze — torn between the desire to shove the Americans out of the way and his duty to be courteous. He just about pulled it off but it was a close-run thing. Read more
By Gideon Rachman
Atlanta coined the catchphrase that it was the city that was “too busy to hate”. During the past 30 years, the countries of Asia have informally adopted that slogan and transferred it to a whole continent. Since the end of the 1970s, the biggest Asian nations have forgotten about fighting each other – and concentrated on the serious business of getting rich. The results have been spectacular. But there are now alarming signs that East Asia’s giants are pursuing dangerous new priorities, and diverting their energy into angry nationalism and territorial disputes.
Obama’s state visit to Japan
This week, we look at Japan, where President Barack Obama is concluding a state visit. The US leader and Prime Minister Shinzo Abe have vital business to discuss, from Japan’s delicate and rather dangerous relationship with China, to the state of the Japanese economy and hopes for a major new trade deal. David Pilling, Asia editor, and Lindsay Whipp, former Tokyo correspondent, join Gideon Rachman to discuss
TOSHIFUMI KITAMURA/AFP/Getty Images
By Jonathan Soble
Sermons from the IMF tend to make Japanese leaders fidget nervously in their pews – all fire and brimstone about budget deficits and the need for austerity. But Christine Lagarde’s warning about the evils of deflation is more likely to elicit a full-throated “amen”.
Successive Japanese administrations have promised to end deflation – the “ogre”, in Ms Lagarde’s description, that has menaced the country’s economy since the late 1990s. But under Shinzo Abe, prime minister since December 2012, and his central bank governor, Haruhiko Kuroda, deflation-fighting has become the overriding priority.
They have been getting results so far: prices of consumer goods excluding fresh food are rising nearly 1 per cent year-on-year, thanks to the Bank of Japan’s ultra-accommodative monetary policy and the related plunge in the value of the yen, which has pushed up the cost of imports. Read more
It’s been a year since Shinzo Abe got financial markets excited with his plan to pull Japan’s economy out of its more than 15-year deflation. So has Abenomics been a success? Jonathan Soble, Tokyo bureau chief investigates: Read more
By Gideon Rachman
A few years ago Wired, the technology magazine, ran a regular feature called “Japanese schoolgirl watch”. The concept was not as dubious as it sounds. The idea was simply that the schoolgirls of Japan are technological trendsetters and that the gadgets they adopt today will go global tomorrow.
♦ The anxiety over Japan’s sales tax may seem bizarre to outsiders, but it will be a stern test of Shinzo Abe’s popularity.
♦ James Politi looks at the impact of the sequester on Head Start, arguably the most high-profile casualty among the anti-poverty programmes.
♦ Nicolás Maduro is looking to blame anybody else for Venezuela’s economic problems – even Spider-Man.
♦ While support for Cristina Fernández ebbs in Argentina, Sergio Massa has risen to become one of the strongest potential candidates for presidential elections in 2015.
♦ Slate magazine imagines how the US government shutdown would be covered by the US media, if it took the same tone that it does in its foreign coverage.
♦ The Washington Post is crowdsourcing for ideas as to how congress can be punished for the government shutdown.
♦ Smuggled letters from westerners caught up in the crackdown on the Muslim Brotherhood reveal that terrible prison conditions remained unchanged and there is a new willingness to subject westerners to the same treatment as Egyptians, according to the New York Times. Read more
By David Gallerano and Catherine Contiguglia
♦ The tragic ending of prisoner Menes, the Hungarian stork unfairly painted as a spy (as well as a duck) by the Egyptian police and clapped into a prison in the Qena governorate.
♦ A self-organized group of armed citizens is battling – with unexpected success – a brutal drug cartel at Michoachan, in central Mexico.
♦ Japanese economist Takatoshi Ito analyses Japan’s fiscal situation and argues Mr. Abe must press ahead with tax increases.
♦ “We Syrians are human beings of this world, and the world must stop the Assad regime from killing us. Now,” writes Syrian activist Yassin al-Haj Saleh, in his plea for a strong intervention that does not just “discipline” the regime.
♦ A profile of Rwandan president Paul Kagame – who “may be the most complicated leader in Africa”. Read more
Zojoji-temple in Tokyo (Getty)
The most significant International Olympic Committee meeting in a generation takes place this weekend – the committee will choose a host city for 2020 at the weekend amid reservations about all three candidates. Shortly after, it will have to decide on a successor for Jacques Rogge, president of the movement.
Thomas Bach, a German lawyer, is the favourite in the presidential race. But the decision over the 2020 host will be more difficult. Here’s what’s happened in the campaign so far and why the decision will be an uncomfortable one: Read more
By Gideon Rachman
Japan’s public diplomacy hovers between the ludicrous and the sinister. In recent months, the country has specialised in foreign policy gaffes that seem designed to give maximum offence to its Asian neighbours while causing maximum embarrassment to its western allies.
Not a milestone to rejoice in. Japan’s debt has tipped into the “quadrillion” zone for the first time. That is, as of the end of June, central government debt, looked like this: Y1,008,628,100,000,000, or $10.4tn.
It surely could not be a clearer message to Japanese Prime Minister Shinzo Abe that shilly-shallying over fiscal consolidation is no longer an option? Second-quarter economic output figures due on Monday are key to Abe’s decision about whether to raise consumption tax from 5 per cent to 10 per cent by 2015. Back in June in a speech in London, he pinned any decision to raise the tax – one he must make by October – on the strength of the economy in the second quarter. Read more
♦ Barack Obama said “you would have to slice the salami very thin” to find policy differences between Lawrence Summers and Janet Yellen, who are now in the running to chair the Federal Reserve. The FT’s Robin Harding takes a look at the salami.
♦ Russia is spending $51bn on sports facilities in Sochi for the 2013 Winter Olympics, but developers fear the only winners will be friends of the Kremlin.
♦ A Nazi gaffe by Taro Aso, Shinzo Abe’s deputy premier and finance minister, is a reminder that the cultural conservatives, who dominate the ruling Liberal Democratic party, have not abandoned their revisionist dream.
♦ Tendai Biti, Zimbabwe’s finance minister, tries to find out where the busloads of voters at Mount Pleasant have come from, but the bus driver is unable to tell him. Read more
♦ Many in Japan are hoping that Shinzo Abe’s pragmatism will win out over his ideology.
♦ Rotimi Amaechi, the governor of Rivers state in Nigeria, has accused President Goodluck Jonathan of condoning “impunity and authoritarianism” in an effort to ensure re-election in 2015.
♦ A generation of Muslim Americans has come of age in the shadow of 9/11, amid a climate that ranges from low-level paranoia to verbal abuse and vandalism. In response, some embrace their faith more fervently, others live in self-imposed isolation.
♦ Western states in the US may break temperature records again this year, but what does this mean for farmers and agriculture?
♦ Israel’s government views the EU plan to label products made in settlements as symptomatic of a greater threat to the legitimacy of the Jewish state.
♦ The Israeli-Palestinian peace process is back and Foreign Policy has a handy guide to the buzzwords that are going to be flying around.
♦ A young conscientious objector has proved tricky for Israel’s army – he would serve if it wasn’t for the Israeli occupation. Read more
♦ Detroit became the largest US city to file for bankruptcy. Time magazine looks at the decay of the city. The Washington Post’s Ezra Klein points out Detroit is not alone.
♦ Sunday’s election for the upper house of Japan’s parliament is expected to give Prime Minister Shinzo Abe a stronger platform from which to shoot the “arrows” of his radical economic reforms, but some fear he may also strike a more nationalistic tone.
♦ Russian opposition leader Alexei Navalny was freed on bail Friday after being sentenced to five years in prison on embezzlement charges the day before. Our Charles Clover examines how his jailing tells you a lot about how political repression has evolved in Russia over the years. Masha Lipman looks at how the Putin government chose to eliminate their political opposition the hard way.
♦ The Guardian’s Patrick Kingsley examines the shooting of Muslim Brotherhood supporters outside the Republican Guards’ club in Cairo and finds that it was a coordinated assault on largely peaceful civilians.
♦ Marc Lynch at Foreign Policy argues that Washington should make a “much broader, more vigorous effort to engage publicly and privately across all Egyptian political groups and segments of the population” – but now is not the moment, with so much anti-American rhetoric swirling around.
♦ They were the irreplaceable loot from the art heist of the century. But to Olga Dogaru, a resident of a tiny Romanian village, burning them was the only way to save her son from prosecution. The problem is that he is the man charged with orchestrating the brazen theft last October of works worth hundreds of millions of dollars from the Kunsthal museum in Rotterdam. And the works were masterpieces by the likes of Picasso, Monet and Gauguin. Read more
Shinzo Abe speaks at the Guildhall (Getty)
Shinzo Abe didn’t tell his British audience at London’s Guildhall anything new about Abenomics, his programme to reflate Japan’s economy back to health. But it is worth listening once again to the impassioned language with which he endeavoured to sell it.
Not since Junichiro Koizumi, the last prime minister to promise radical reform, has Japan had a leader so obviously energised by a sense of his own destiny. Mr Abe does not possess the charisma of the Elvis-loving Koizumi, but what he lacks in appeal he makes up for in zeal.
Mr Abe pledged to be “a drill bit that will break through [the] bedrock” of Japanese regulations. He promised to be “afire, burning with all the political strength I can muster”. To allow Japan’s economy to shrink would not just be unfortunate, he said, it would be nothing less than a “cardinal sin”. (In nominal terms, at least, Japan has evidently been a sinful place in recent years.) Read more
Shinzo Abe in Washington on February 22 (Getty)
It’s rare that the sequel is better than the original movie, but so far Shinzo Abe II is doing much better at the box office than its ill-fated prequel. As we approach the first 100 days in office mark, here are five differences (and a few similarities) between Shinzo Abe I and Shinzo Abe II.
1. Shinzo Abe I had a dull subtitle. Constitutional Amendment failed to excite the public and never got anywhere. Deflation Slayer, on the other hand, the subtitle for Shinzo Abe II, has got everyone talking, from bond traders and currency speculators to ordinary Japanese fed up with economic drift.
2. It is often forgotten that Shinzo Abe I, released in October 2006, had a strong opening. Abe travelled to Beijing and mended relations with China. But the movie quickly trailed off as the plot foundered on a boring and jerky narrative involving disappearing pension records and a series of ministerial scandals. Shinzo Abe II was strong even before the opening credits rolled. Many audience members were so excited that shares soared and the yen weakened even before Abe appeared in the opening scene.
3. The plot of Shinzo Abe II is intriguing. It starts off as a story about a bold economic experiment, but no one knows how it will end. Will the Japanese economy at last gain some traction after 20 years in the doldrums? Or will the gamble end in catastrophe with hyperinflation and capital flight? Read more
Japan’s Abenomics and the world economy
Japan is still the world’s third-largest economy, but has also been stagnating and idling for twenty years. Now a new government led by Shinzo Abe has come to power pledging to take dramatic steps to turn the situation around. The potential rewards of this policy are high, but so are the risks – and not just for Japan but the whole world economy. Martin Wolf, the FT’s chief economics commentator and Jonathan Soble, Tokyo correspondent, join Gideon Rachman to discuss the consequences of Abenomics.