Looking back at PM Abe
an unexpected, tragic newsletter topic
As has been well-reported, Japan’s longest-serving prime minister, Abe Shinzo, died of gunshot wounds incurred during a campaign stop for a fellow LDP politician in Nara, next to Osaka, last Friday. Ian Bremmer described it to Fareed Zakaria as a JFK (assassination) moment and the analogy seems apt. I am reminded of how 3/11 (the date of Japan’s triple disaster - earthquake —> tsunami —> Fukushima meltdown) became a term in Japan akin to how we refer to 9/11 - whether you overtly commemorate it, it is a day that stays in memory.
Statista, citing Japan’s National Police Agency (data as of March 2022), reports there were 10 total shootings in Japan in 2021. 10. Total. This was, by definition, an exceedingly rare event.
The fact that the longest serving prime minister, two years out of office as prime minister, was out doing retail stump speeches on behalf of local LDP candidate is very indicative about the retail-oriented nature of Japanese politics. For commentary on that topic during the most recent election, Tobias Harris (author of the 2020 Abe biography The Iconoclast: Shinzo Abe and the New Japan) maintains Substack and Twitter accounts worth checking out. Harris also commented on Abe’s impact in an obituary provided to Foreign Policy. Noah Smith also commented eloquently on his own conversion to being an Abe believer in this retrospective.
We honored PM Abe’s contributions to the Japan-US relationship, and that between Japan and Northern California, at the Japan Society of Northern California Award of Honor Gala in 2020. Mr Abe, who had recently stepped down as PM, accepted by video. This was during my last month as board chair of JSNC. Alas, the Gala was remote and Mr Abe did not come to the Bay Area to accept his award. (As chair, I attended this Zoom Gala in tuxedo top and black jeans, if memory serves.)
I wrote (in a previous newsletter incarnation) about Abe’s tenure in August 2020, after he stepped down as PM. What follows is based on and updates that newsletter.
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PM Abe is noteworthy based on tenure: in what has been a high turnover role, he is the longest serving in two ways: number of days (a function of having served non-consecutive terms), and number of consecutive days. He achieved the first distinction in late 2019, and the second in August 2020. (We have a mug (歴代首相漫像) bought in Narita Airport that has caricature faces of all the prime ministers. There are a LOT of faces. There were five PMs in the five years between Abe's two tenures.)
Thus, Abe’s longevity itself was unique. He was the first internationally memorable prime minister since the leonine Junichiro Koizumi, and one of probably a handful who were genuinely impactful since Nakasone in the 1980s. Long-serving doesn’t necessarily mean wholly successful on a policy basis, but it does point to being a successful politician. (Answer to your unspoken trivia question: Grover Cleveland is the only US president to serve non-consecutive terms.)
That said, at the beginning of Abe’s second go-round in 2012, we scratched our heads. His first go-round had ended rather abruptly, for what turned out to be the same reason - ulcerative colitis. So, why bring him back? Wouldn’t this be more of same?
But, in 2012, back he came. Perhaps it was his time in the wilderness, but he came out swinging. And, at the time (I hadn’t yet started teaching at Haas) - as consultants based in Silicon Valley, there was one immediate impact that was striking - Japanese companies had their swagger back, in a way I hadn’t seen since the early 1990s. They spoke with belief of Abenomics. Economics and business are highly influenced by sentiment - companies will invest if they believe they are doing well. Consumers will buy if they feel secure in doing so. So, by that measure, Abenomics certainly seemed to be working. In fact, in 2013 and 2014, we gave a series of presentations noting this - much as we saw a renewed swagger to Japanese businesses, we also saw a renewed interest on the part of Silicon Valley companies in Japan as a market (シリコンバレーの日本回帰). Below is a screen cap from a presentation we gave in February 2014.
In 2015, Abe himself came to Silicon Valley. He drove a Tesla, a car made in Fremont in the former GM-Toyota NUMMI factory, with Panasonic li-ion batteries inside, made by a company in which Toyota invested during the 2008-2009 crash. It is not hard to imagine Japanese auto execs gritting their teeth at the sight. Perhaps that was the point. If leaders are supposed to bell the cow, i.e., signal to the herd what's important, Abe’s visit certainly did this. The uptick in Japanese visitors to the Bay Area became more of a flood. And these weren’t just gaming companies or trading companies or mature OEMs. Rather, component companies way down the keiretsu stack also set up scout outposts. (The Plug and Play Tech Center in Sunnyvale became home to a Japan village.) Data from the Japan External Trade Organization (JETRO) shows the increase in Japanese companies in the broader San Francisco Bay Area. (N.B.: this is for *all* industries.)
Abe’s visit gave air cover to “go make something happen in Silicon Valley”.
After Abe’s visit, other cabinet ministers also came, including then-foreign minister Taro Kono, and also First Lady Akie Abe. A former defense minister also came, as did the sitting minister METI. We had the pleasure of meeting the First Lady at a lunch event. (For the record: in our meeting with the First Lady, she spoke to the room through an interpreter.) Politicians - and spouses - are people too and my condolences to the First Lady at her loss.
Did Abenomics work? Bloomberg was relatively laudatory at the time of his resignation.
In our view, he deserves credit for selling TPP to skeptical stakeholders, and then actually ratifying it even after Trump was elected and said he would withdraw (to the delight of the Australian cattle industry, among others). Abe didn’t seem to hold a grudge when Trump pulled out the rug from TPP, after Abe spent years advocating for it domestically. Abe famously cultivated president-elect Trump and seems to have coexisted quite effectively with him. Japan filled up some of the (lamentably) growing US void in Asia. There have been improvements in board governance, as measured by the number of outside directors. He also deserves credit for the Quad and even the nomenclature “free and open Indo-Pacific”. Geopolitically, he was quite impactful. Ian Bremmer hit on this during his interview with Fareed Zakaria.
Abe’s Womenomics agenda, while bringing the topic to the forefront (and at least making companies look at the issue), has had limited results. Importantly, it has not fixed structures that create incentive to parents returning to the workplace to only work at a part-time level, i.e., below 25 hours. Kathy Matsui, credited with coining the term Womenomics, described it as a work-in-progress. That all said, female participation in the workplace in Japan is higher than it is in the US.
Raising the consumption tax while trying to stimulate the economy was counter-productive, and reminiscent of Prime Minister Hashimoto doing the *exact same thing* in the midst of the Asian financial crisis. (Shocker: consumption tanked.)
Then there’s the Olympics; a bigger topic than we want to cover today. We debated the merits of Japan hosting the Olympics with an undergraduate class in 2016. There’s usually a five-year bump in GDP growth, followed by a hangover. With Olympic capex done, and Covid-19, the hangover started in Japan even before the Olympics were belatedly held in 2021 before empty venues.
Japan's GDP between Olympics. Data circa 2016
PM Abe was ultimately transformative. From the perspective of Northern California, he did a lot to make Japan more relevant, and nimbly filled a vacuum left by an inward-looking US.