May 25, 2020

JAPAN: Abe faces new risks as Japan exits state of emergency

BY Tobias Harris

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( 5 mins)
  • On Monday, 25 May, Prime Minister Shinzo Abe lifted the state of emergency still in effect in Tokyo and three of its surrounding prefectures as well as the northern prefecture of Hokkaido.
  • Abe faces the challenges of the post-emergency stage of the outbreak with his approval ratings at record lows as the public has opposed his handling of the outbreak and other political missteps.
  • If the government is caught off guard by the emergence of new clusters, it could prove fatal to Abe’s premiership.

Abe used his press conference Monday to tout Japan’s model of combating Covid-19 – Japan had effectively contained
the outbreak in a month and a half without a lockdown or other compulsory measures, he noted – but the end of the state
of emergency begins a perilous new period for the prime minister. Despite Abe’s declaration that the outbreak had been contained, the public has not rewarded him with higher approval ratings. In fact, polls published over the weekend found that Abe’s approval ratings have fallen to their lowest levels of his seven-and-a-half-year tenure as prime minister, below the key threshold of 30%. The public not only disapproves of Abe’s handling of the tenure of now-resigned Tokyo public prosecutor Hiromu Kurokawa but also disapproves of how Abe has handled both the campaign against Covid-19 and the pandemic’s economic fallout. Importantly, polls also show that support for Abe’s Liberal Democratic Party (LDP) has fallen, with the combined approval approaching 50%, the so-called “Aoki line,” below which cabinets have been customarily deemed in danger of collapse. The worse the party’s standing, the more opposition Abe will face from his own backbenchers, which could threaten his tenure.

The upshot is that how Abe’s government handles the next steps could determine whether Abe holds out until the end of his term in September 2021. Accordingly, although the state of emergency has been lifted, Japan is unlikely to reopen quickly. The administration’s basic policy calls for a gradual reopening over the next three weeks, until 18 June, during which travel across prefectural lines will be discouraged; concert and exhibition halls will reopen with restrictions on attendance; and “live houses” – small music venues – and similar venues will remain shuttered as the government drafts guidelines to prevent new outbreaks in high-risk indoor settings. Professional baseball and soccer leagues will resume play on 19 June, but without spectators until 1 August. The administration is also studying the process of relaxing entry bans for foreign travelers, starting with business travelers, but border controls will likely be lifted slowly. Schools have also been slowly reopening, a process that will continue into June. It is less clear how many employers will continue to permit telecommuting or staggered commutes, notwithstanding the recommendations of the business federation Keidanren and other industry groups. Finally, Abe’s medical advisory panel will be drafting standards to determine whether the prime minister should reintroduce a state of emergency.

If managing a smooth transition to a “new normal” and containing future clusters is one challenge, mitigating the economic costs of the pandemic is the other. On Monday, Abe apologized for delays in distributing the JPY 100,000 (USD 928)-per-individual payments in the first supplemental budget, and pledged that, once the second supplemental budget is complete, the government will have delivered more than JPY 200tn (USD 1.85tn) in economic stimulus, implying the forthcoming stimulus package will be around JPY 80tn (USD 742.7bn). Much of that total will be in the form of cheap loans from public financial institutions and other credit guarantees, consistent with the Abe administration’s new pact with the Bank of Japan. The government is finalizing its draft budget – it will likely be approved on 27 May – and it is already clear that the new supplemental budget will include subsidies for university students, rent assistance for businesses, and more generous business continuity and employment continuity subsidies, as well as new subsidies to help businesses comply with hygienic guidelines to combat Covid-19. The budget will also include bonuses for front-line medical workers at hospitals and nursing homes. The stakes are particularly high for Abe, as the supplemental budget marks the last major achievement the prime minister will be able to deliver before the Diet session ends on 17 June.

Once the Diet session ends, the best-case scenario for Abe’s survival is that, thanks to individual and private-sector cooperation, the number of new infections remains under control and the public health system continues to detect new clusters and prevent them from growing. At the same time, the provision of subsidies and the gradual resumption of business activity would stabilize the economy. In this scenario, public anger over the Kurokawa scandal would fade and Abe’s support would settle at a survivable level.

Abe could survive a “third wave” outbreak, although it would depend on how soon it followed the second wave – only a slight majority favors lifting the state of emergency, despite a sharp decline in new infections, and thus if it appeared that Abe moved too quickly a backlash would be likely – and how effectively the government detected and moved to contain the outbreak. The worst-case scenario would be a new wave of infections over the summer that exposed the government’s lack of preparedness and accelerated the decline in Abe’s and the LDP’s support, at which point Abe could likely begin facing calls for his resignation from within the ruling coalition.

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