How Abe Is Making a Failure of Success

Japan’s powerful prime minister still can’t get the economy going.

Japan's Prime Minister Abe attends a news conference at his official residence in Tokyo — Photographer: Yuya Shino/Reuters

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By Enda Curran and Isabel Reynolds

April 21, 2016 at 9:20 PM UTC

This article is for subscribers only.

This article is part of the April 25, 2016 issue of businessweek.

Prime Minister Shinzo Abe has had a great run since assuming power in 2012. His Liberal Democratic Party-led coalition government was reelected in 2014 with a comfortable majority in the Diet. Polls suggest it would probably win again if Abe calls lower house elections in the near future, as some expect. He could be in power through 2020, becoming Japan’s longest-serving prime minister. No politician in Japan poses a serious threat.

Surprisingly, the electoral clout hasn’t given him free rein to push his signature economic program forward. Launched with great fanfare three years ago, Abenomics aimed to revive Japan with a three-pronged strategy of aggressive monetary easing, fiscal spending, and structural reforms. Instead, the International Monetary Fund in April halved its 2016 growth forecast for Japan to 0.5 percent, deflation remains a worry, real wages have fallen for four consecutive years, and the Nikkei is down 11 percent this year as foreign investors head for the exits.