Abenomics: Policies & Political Economy Of Japan’s Shinzo Abe

Leaders are born for tough times. Whenever there is a crisis, there comes the need for drivers of change whose success solely depends on their preparation for the moment and courage to face obstacles. In Prime Minister Shinzo Abe, Japan found a leader fit for an economic depression that had resulted in massive unemployment and the collapse of the world’s 3rd largest economy of the time. Shinzo Abe was born in a political family where his grandfather had served as Japan’ Prime Minister in the 1950s. He rose to become the longest-serving Prime Minister in the history of Japan until September 2020 when he resigned. In July 2022, Shinzo Abe died in a political rally shooting ending the era of his power over Japan.

One would be interested to know what makes a man as legendary as Shinzo Abe. In my study of his policies and political economy commonly known as Abenomics; I made a few findings as discussed in this column. One’s background matters in how they build influence and exercise their authority. Abe’s grandfather Nobosuke Kishi was a prominent man and Prime Minister of Japan. He gave Shinzo Abe a head start in nurturing a political career that would last for decades. Abe also enjoyed support from the Liberal Democratic Party (LDP) which helped in crafting the popularity of his policies and managing his exposure to media. He enjoyed high approval ratings and wide popularity in Japan and the world over. He also cemented relationships with many African countries through the Tokyo International Conference on African Development (TIKAD).

Abenomics was a three – tire strategy to fix Japan’s main economic detractors. First were fiscal policies that encouraged huge government spending on infrastructure in order to create more jobs, pay workers and have these workers spend on consumable commodities. Second were monetary policies which sought to correct a case of unattractive bank loans due to high-interest rates. Shinzo Abe reduced interest rates on bank loans, printed more money and deliberately drove the country to an inflation rate of 2% up from a deflation. Japan remained more solvent than the USA amidst such disruptive monetary policies. The third level of Abenomics was in structural reforms that addressed the shortage of labour. Shinzo Abe incentivized people to sire kids through sponsorship of childcare and education. Abe also introduced womenomics where he mobilized women to join the labour force and participate in building the world’s third largest economy in Japan.

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