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September 22, 2017

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Mr. Abe back to his old job, will he return to old problems?

Japan's former, and now future, prime minister, Shinzo Abe, has been welcomed back to the job he threw away five years ago because, according to a story he told Tokyo-based Bungei Shunju magazine, he was suffering ulcerative colitis or an intermittent inflammatory bowel disease. That doesn't bode well for his Cabinet, which is expected to be launched before the end of this year.

Abe, currently the country's prime minister-elect, has promised to do his utmost to rebuild Japan as a "new country" in contrast to the "beautiful country" he vowed to turn it into when he succeeded Junichiro Koizumi in September 2006. The new promise is apt, for Japan stands at a crossroads and the direction it takes is critical to determining whether it can remain a leading power in the world.

Japanese voters know this full well. As a matter of fact, they expected that Koizumi, who revived the Liberal Democratic Party (LDP) shortly before he stepped down, could make Japan a "normal country" after the economic collapse of the early 1990s. Abe quit, paving the way for the Democratic Party of Japan (DPJ) to end the LDP's half-century of almost uninterrupted rule.

When Yukio Hatoyama became the DPJ's first prime minister in 2009, the Japanese hoped he would find the right path to ending the country's economic woes. However, his party botched its majority control of the Lower House of the Diet, and Prime Minister Yoshihiko Noda was forced to call a snap election he knew he would lose. The disillusioned Japanese voters who previously voted in the DPJ, expecting it would save them, returned the LDP to power, with reservations. They don't expect Abe to make a "new country" out of their once proud Land of the Rising Sun.

The tasks facing Abe are hopelessly tremendous. He may implement bold monetary easing measures and improve infrastructure as part of reinvigorating regional economies and investing for the future. But lavish public works projects, to which the past LDP governments relied on as a method for staying in power, are not going to work wonders any more. How can the new administration reduce its reliance on nuclear energy on the one hand and achieve sustainable economic growth on the other? Remember that Japan's increasingly large trade deficit is partly caused by the increased fuel costs of thermal power generation, which is functioning as a substitute for idle nuclear reactors. While the economy is expected to remain sluggish at best, Abe wants to amend Japan's "peace" constitution, turn self-defense forces into a regular army, navy and air force, and improve deteriorating relations between Japan and China. Can he make a fix?

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