Japan’s Abenomics Haunted by Ghost of General MacArthur

Photographer: Tomohiro Ohsumi/Bloomberg

Japan’s World War II defeat resulted in the 1947 U.S.-drafted charter that renounces war as a sovereign right. Japan maintains a Self-Defense Force, seen here, that courts have upheld over the protests of pacifist groups. Prime Minister Shinzo Abe has advocated revising the document since his first term as prime minister in 2006. Close

Japan’s World War II defeat resulted in the 1947 U.S.-drafted charter that renounces... Read More

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Photographer: Tomohiro Ohsumi/Bloomberg

Japan’s World War II defeat resulted in the 1947 U.S.-drafted charter that renounces war as a sovereign right. Japan maintains a Self-Defense Force, seen here, that courts have upheld over the protests of pacifist groups. Prime Minister Shinzo Abe has advocated revising the document since his first term as prime minister in 2006.

Prime Minister Shinzo Abe’s drive to revise Japan’s pacifist constitution for the first time risks alienating voters who support his economic agenda and dividing his coalition government before July elections.

Abe aims to make it easier to amend the constitution, a first step in plans to beef up the military at a time when Japan is mired in territorial disputes with China and South Korea. His Liberal Democratic Party is forecast to win the upper house race, potentially giving him the two-thirds majority in both chambers needed to alter the charter.

Overhauling a document imposed by U.S. General Douglas MacArthur’s occupation force after World War II has been a goal of LDP politicians, including Abe’s grandfather, since the party was founded in 1955. While polls show the public backs Abenomics, his strategy to resuscitate the world’s third-largest economy after more than a decade of deflation, a majority of voters don’t rate constitutional revision as a priority.

“The growth strategy can only be accomplished with sustained attention,” said Koichi Nakano, a political science professor at Sophia University in Tokyo. “It’s a monumental task in its own right. If he takes up more nationalistic causes and Abenomics is not looking good, this could lead to a loss of authority after the election.”

Photographer: Koichi Kamoshida/Bloomberg

“Changing the constitution is coming closer to reality,” Shinzo Abe, Japan's prime minister, said at an April 19 press conference. “I want to change Article 96 to put the constitution back in the hands of the people.” Close

“Changing the constitution is coming closer to reality,” Shinzo Abe, Japan's prime... Read More

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Photographer: Koichi Kamoshida/Bloomberg

“Changing the constitution is coming closer to reality,” Shinzo Abe, Japan's prime minister, said at an April 19 press conference. “I want to change Article 96 to put the constitution back in the hands of the people.”

Abe took office in December pledging a three-pronged strategy of aggressive monetary easing, fiscal stimulus and deregulation that investors have welcomed. The benchmark Topix Index (TPX) of stocks is up about 60 percent and the yen has fallen 18 percent since mid-November as the Bank of Japan expands monetary policy to end 15 years of deflation.

Keeping Support

Maintaining those gains depends on Abe keeping support in a country that’s had seven prime ministers in the past six years. Abe, whose first, 12-month stint as premier ended in 2007 due to ill health, is supported by 74 percent of the electorate, according to a Yomiuri newspaper poll published April 16.

“This is an issue that could affect Abe’s popularity rating, which then would impact his ability to pursue economic reforms,” said Robert Feldman, head of Japan economic research at Morgan Stanley MUFG Securities Co. “That’s what investors are interested in.”

Abe needs to maintain support to push through policies such as scrapping regulations that discourage investment, give more autonomy to local regions and restructure the country’s powerful bureaucracy. In February, he announced a plan for Japan to join talks on an Asia-Pacific free-trade deal that is opposed by the nation’s biggest agricultural lobby, which represents one of the LDP’s traditional support bases.

Photographer: Junko Kimura/Bloomberg

The National Diet Building stands in Tokyo. Prime Minister Shinzo Abe is seeking to change Article 96, to allow amendments to be made with a simple majority in each house, rather than the current two-thirds. Any planned amendment must then face a public referendum. Close

The National Diet Building stands in Tokyo. Prime Minister Shinzo Abe is seeking to... Read More

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Photographer: Junko Kimura/Bloomberg

The National Diet Building stands in Tokyo. Prime Minister Shinzo Abe is seeking to change Article 96, to allow amendments to be made with a simple majority in each house, rather than the current two-thirds. Any planned amendment must then face a public referendum.

Curbing Japan

Tomorrow is Constitutional Memorial Day, marking the 66th anniversary since the implementation of the 1947 charter, which renounces war as a sovereign right and forbids military forces. Japan maintains a Self-Defense Force of 225,000 troops and the fourth-largest defense budget in the word after the U.S., China and Russia. Abe wants that de facto army legitimized.

“Those involved in drafting the constitution were full of idealism, but the main aim of the occupation was to prevent Japan from emerging again as a great power,” Abe wrote in his book “Towards a Beautiful Japan.”

Previous LDP prime ministers expanded the interpretation and use of the Self-Defense Forces without resorting to constitutional change. Junichiro Koizumi dispatched troops to Iraq in 2003, the first postwar overseas deployment apart from UN peacekeeping missions, in a move that divided the public.

’Deeply Ingrained’

“This constitution has become deeply ingrained in Japanese society,” opposition Democratic Party lawmaker Kiyomi Tsujimoto said in an interview. “No one has been able to change it in more than 60 years because Japanese people are happy with it.”

Abe backs an LDP proposal to alter the constitution so it asserts the right to possess armed forces for self-defense. To implement that, he is first seeking to change Article 96 of the charter to allow amendments to be made with a simple majority in each house, rather than the current two-thirds. Any revision must also face a public referendum.

“Constitutional change is coming closer to reality,” Abe told reporters on April 19. “I want to change Article 96 to put the constitution back in the hands of the people.”

While 50 percent of the public approves of Abe’s policies to boost growth, only 6 percent favor his bid to change the constitution, according to an April 16 Asahi newspaper poll. A survey in the Mainichi newspaper six days later found 7 percent of respondents said the constitution was the most important issue in the upper house election, compared with 35 percent for the economy. None of the newspaper polls gave a margin of error.

’Passing Hysteria’

“The constitution is different from any other law,” said Setsu Kobayashi, a law professor at Keio University in Tokyo who favors constitutional change while opposing Abe’s plan. “Every country makes it hard to amend, because a nation’s foundations should not flip over with every passing hysteria.”

During the first half of the 20th century, Japanese forces occupied Korea and much of China. Both countries protested last month’s visit by LDP lawmakers to Tokyo’s Yasukuni Shrine, seen as a symbol of wartime aggression. Abe’s plans could exacerbate regional tensions, inflamed by a territorial dispute with China that last year hurt trade between Asia’s two biggest economies.

The LDP draft would also make it a “duty” not to damage the “public interest” or interfere with “public order.” The clause has sparked concern with junior coalition partner New Komeito, which is backed by a pacifist Buddhist sect. While a Yomiuri survey published today shows almost all LDP lawmakers favor changing Article 96, Komeito wants to keep the existing constitution and add new rights for citizens, according to the party’s policy chief Keiichi Ishii.

Limit Power

“Our understanding is that a constitution is intended to allow citizens to limit the powers of the state,” Ishii said. “It seems odd to include duties.”

Komeito has a loyal vote-gathering system that has benefited the LDP, said Steven Reed, a professor of political science at Chuo University in Tokyo. The party, which has supported the LDP for more than a decade, has 31 members in the 480-seat lower house and 19 in the 242-seat upper chamber.

“If Komeito left the coalition, the LDP would be in deep trouble,” Reed said. “That takes a lot of votes away from their pockets.”

Abe is preparing to unveil his mid-term growth strategy before attending a meeting of leaders from the Group of Eight nations in June. The plan “will be on a different scale and I will carry it out with determination,” he said on April 19. He hasn’t specified a timeframe for his constitutional plans.

“If Abe focuses on the constitution too much then you can forget about economic reforms,” said Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo. “To have such a big change you really need a position of strength, or all your tricky structural reforms will drown.”

To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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