Behind PM's economic focus brews a revisionary nationalistic fervour


TOKYO LETTER:Colossal debt sits on Japan’s future. But there are moves to rewrite its past

When Shinzo Abe, Japan’s new prime minister, returns to work this week after the new year holidays, he says he will make fixing the reflation-plagued economy his “mission”. Abe has so far said less about his political obsession: whitewashing the past.

For evidence, take the 19 members of his cabinet, announced just after Christmas: now fewer than 14 belong to a parliamentary league that supports worshipping at Yasukuni, the controversial Tokyo war memorial that enshrines Japan’s second World War leaders.

Thirteen support Nihon Kaigi, a nationalist think tank that advocates a return to “traditional values” and rejects Japan’s “apology diplomacy” for its wartime misdeeds; and nine belong to a Diet association for “reflecting” on history education, or revisionists who deny most war crimes.

The cabinet line-up includes education minister Hakubun Shimomura, who wants to consign to history’s dustbin not just the landmark 1995 Murayama statement, expressing “remorse” to Asia for Japan’s wartime atrocities, but even the verdicts of the 1946-1948 Tokyo war crimes trials.

Abe himself has made no secret of his wish to revise three of the country’s modern charters: the 1946 constitution; the education law, which he thinks undervalues patriotism; and the nation’s security treaty with the US, which constrains Japan to a junior role. Descriptions of the new Abe government as “conservative” miss the point: this is a cabinet of radical nationalists.

If Abe’s brief, ignominious taste of power in 2006/2007 taught him anything, however, it is that few ordinary Japanese share his appetite for a root-and-branch makeover of the nation’s post-war architecture. Analysts expect him therefore to tread carefully until crucial upper house elections in July.

Olive branch

Many have welcomed his decision to dispatch former finance minister Fukushiro Nukaga to Seoul to meet the president-elect, Park Geun-Hye yesterday, an overdue olive branch that may help mend ties frayed over disputed islands.

In the meantime, Abe is trying hard to kick-start the economy, instructing new finance minister Taro Aso to turn on the monetary spigot, ignore a 44-trillion-yen cap on annual debt issuance and compile the latest of Japan’s huge supplementary budgets.

This apparent return to the big-spending, public-works-addicted LDP governments of the past has unnerved some in a country struggling to emerge from under a debt-burden over twice its annual economy.

But the markets have so far given the government the benefit of the doubt. The benchmark Nikkei closed for the new year holidays at its highest point since the triple disaster of March 2011, driven by investors anticipating a more business-friendly government and a cheaper yen. Many also anticipate that the LDP will face down anti-nuclear protesters and switch back on the nation’s idling reactors.

The government’s aim, says Aso, is to jumpstart the economy out of years of deflation, triggering more consumer spending, private investment and ultimately industry reform.

It’s a risky strategy: economists are already warning about one possible outcome, a sharp rise in interest rates on government bonds. That could increase the cost of servicing Japan’s mammoth debt, and even lead to default.

Abe has also returned to office promising to renew a mission truncated by his abrupt resignation six years ago and revising the constitution to allow Japan to be a more effective military ally with the US. Strengthening ties with Washington is “the first step in turning Japan’s foreign and security policy around”, he said last week.

Inevitably, perhaps, the China Daily has bristled, warning that using the alliance as pressure to deter China “will not work” and will “only aggravate” tensions in the East China Sea over disputed islands, known as the Senkakus in Japan and Diaoyu in China. Tellingly, there has been no peace pipe offering to Beijing, only stiff promises to defend Japanese territory.

Abe must hold his nerve against China, rein in his own radical nationalist instincts and keep the ghosts of the past in the LDP cellar. At some stage his supporters will ask him to deliver on years of neo-nationalist pledges that will infuriate Asia if carried through. If he gets a bounce in the economy before July, he might have a chance of pulling off this balancing act. If not, 2013 will be an interesting year.

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