The second Shinzo Abe Cabinet began four months ago with an attitude of focusing on the following things: 1) the economy, 2) the economy, and 5) diplomacy (there is no three or four). Abe started by setting out his “Abenomics,” which have had a major impact on stock prices and exchange rates. Due to the terrible Democratic Party of Japan (DPJ) government, the Nikkei Stock Average at the time of the general election last December was 9,737 yen. On April 12 it rose to 13,485 yen. In the same way, the dollar to yen exchange rate - which was around 82 yen in December - was 98 yen on April 12. In this way, the recovery has been truly remarkable. Still, the Nikkei Stock Average was 16,435 yen on August 27, 2007, the date that marks the demise of the first Abe Cabinet, and the exchange rate was 114 yen to the dollar. Considering this, recovery has only been halfway completed, and even more positive changes are hoped for.
The Abe Cabinet is gaining deeper trust through its economic policies. Yet in the realm of diplomacy, North Korea’s recent actions to threaten war are unpardonable. North Korea successfully miniaturized nuclear weapons through its past three nuclear tests. It has transferred its Musudan, moveable intermediate range-ballistic missiles, to the coast facing the Sea of Japan and is making preparations to fire them. Moreover, North Korea is continually speaking in a provocative way as well. It advised the tourists of many different countries staying in South Korea to leave Seoul, recommended that the embassies of foreign countries leave Pyongyang, and announced its plan to attack the United States mainland.
North Korea has unilaterally broken the cease-fire agreement with South Korea, and has removed laborers from the Kaesong Industrial Region that was a symbol of peace between the north and south. In this way, tensions between the two countries have grown, and they seem to be on the brink of war. In all countries, the military authorities are the ones that want to avoid war more than any other people. The military powers in North Korea know that a war would be a losing proposition, so they do not want to fight.
Only one year has passed since Kim Jong-un became the First Secretary of the Workers’ Party of Korea- the Supreme Leader of the country. His recent war brinkmanship diplomacy is an attempt at self-preservation by this young leader. He has made the military authorities take drastic measures to the very brink of war in order to bring these authorities under his power; the top brass in the military who frown upon this are denounced as cowards. Most of the military leaders who escorted the hearse during the funeral of Kim Jong Il have been dismissed or purged. It is thought that Kim Jong-un’s brinkmanship is for the purpose of first winning over the information agencies that were controlled by Kim Jong Il, making the military authorities who have gained strength and prominence obey the party, and establishing his own stance. In this way, his goal is to prevent a military coup d’état undertaken with guidance from China, which is trying to turn its back on Kim Jong-un (who is obsessed with nuclear weapons) and support a pro-China government.
The war games exercises by the U.S. and South Korea start in March of each year, with a scheduled end date of April 30. Based on the pretext of opposition to these military exercises, Kim Jong-un has carried out brinkmanship - up to one step short of war - in order to control the military authorities with fear. Yet when the exercises end in April, he will likely step back and brag about his “victory” by saying he personally prevented an invasion by the U.S. and South Korea. Kim Jong-il is working to perpetuate his political power in this way.
Kim Jong-un is neither as kind, nor as cruel, as he is generally described to be. In fact, he is quite rational. His father Kim Jong Il never forgot the time he was almost killed in a terrorist act in which the North Korean military powers were led to bomb a train - using 800 tons of high explosives - at Ryongchon Station, an act which is thought to be the work of Chinese Central Military Commission Chairman Jiang Zemin. Now that North Korea has gained confidence through its nuclear arms, it is attempting to become independent from China. Even though North Korea’s government is an irrational one, China absolutely needs North Korea as a buffer zone. North Korea anticipates that China will not want to let go, so it is continually carrying out nuclear bomb tests that China is strongly opposed to, as well as experimental firings of ballistic missiles.
Japan’s position is that it would be troubled if North Korea became China’s puppet to a greater degree than it already is. But it would be even more of a nightmare if South Korea and the nuclear state of North Korea were to form a federation. I hope Kim Jong-un will work to prevent the creation of a united South and North Korea.
Japan and China’s relationship is one in which China has increased its bashing of Japan based on the excuse of Japan’s nationalization of the Senkaku Islands, which was carried out in September 2012 underneath the DPJ administration. China is repeatedly invading Japan’s territorial waters and airspace near the Senkaku Islands. China is also acting to bring things to the brink of combat; in January of this year a Chinese navy frigate aimed a fire-control radar at a Maritime Self Defense Force escort ship. The Chinese army knows it need not fear counterattacks from the Japan Self-Defense Forces or Japan Coast Guard. It has escalated things in a one-sided manner, but these actions have ended since the advent of the Abe Cabinet because this cabinet has displayed a resolute attitude. For example, the Abe Cabinet has taken measures such as to promptly announce that China aimed the fire-control radar.
The background of these actions - which can be described as attempts to bully Japan about the Senkaku Islands issue - is the factional strife between the Crown Prince Party, which counts Jiang Zemin and Xi Jinping (the current supreme leader) as members, and the Communist Youth League of China, which is where President Hu Jintao came from. It looks like the Crown Prince Party will be victorious. Conversely, Japan should make optimum use of the dangers posed by the intimidation and threats from North Korea and China as a good opportunity to reform the constitution and be transformed into a decent country.
The threats posed by the two countries of North Korea and China are serving to awaken Japan, and people are rapidly growing more conservative. We should connect this trend to constitutional reform straightaway. First of all, we should reform Article 96 of the constitution, which determines methods for constitutional amendment. Namely, changing the number of supporting National Diet members required for proposals from two thirds to a majority is urgent business.
In the current National Diet, the primary aim is to pass the zoning bill to correct the disparity between values of votes in different constituencies, which is strongly influenced by a series of unconstitutional High Court judgments. If the bill is not voted on in the House of Councillors, 60 days must pass for re-approval in the House of Representatives. Considering that, the zoning bill must be passed in the House of Representatives by April 26 if it were to be executed by the July House of Councillors election. If this bill was passed, there is a great possibility that a final judgment of “unconstitutional and invalid” would not be handed down in the Supreme Court, which is supposed to take place this autumn. However, the opposition parties are putting up unanimous resistance to the zoning bill submitted by the LDP, based on the “increase by zero, decrease by five” concept. I suspect their aim is to prevent dissolution by continuing to create unconstitutional circumstances, and to block constitutional reform.
The focal point of the July House of Councillors election is, of course, constitutional reform. The ruling party has two thirds of the House of Representative seats. If it could seize the same amount in the House of Councillors, the path would be cleared for constitutional change. The New Komeito Party (NKP), which opposes constitutional change, is hampering the ruling party. The LDP currently possesses two thirds of the parliamentary seats together with the NKP, but the NKP may go into opposition against constitutional reform. If that were true, the LDP would not be able to maintain its two thirds. The LDP must bring in some members from the Japan Restoration Party, Your Party, and the DPJ who support constitutional amendment, and explore rearrangement towards a coalition. The possibility is very low that forces in favor of constitutional change will be able to maintain two thirds of the overall seats in the House of Councillors through the next House of Councillors election, in which only half of the number will be re-elected.
To reliably carry out constitutional reform, with no effects felt even if estrangement from the NKP takes place, perhaps the July House of Councillors election and double election should be turned into head-on confrontations by dissolving the alliance with the NKP. If the alliance were actually reorganized, it is highly likely that the NKP would be demoted to a political party with no influence at all, rather like the Social Democratic Party or the Communist Party. The NKP understands this, and would hold on tightly to the LDP if there was talk of reorganizing alliances. In that case, the NKP would be added to the powers that support constitutional change, such as parts of the Japan Restoration Party, Your Party, and the DPJ. In that way, there is a high possibility that two thirds would be in favor in both houses after the double election.
Before the 2007 House of Councillors election that took place underneath the first Abe government, I gave a direct proposal to then-Prime Minister Abe, suggesting that he embark on a double election since it would be difficult for the LDP to obtain a majority. In a double election, the number of House of Representatives seats obtained in the great victory in Junichiro Koizumi’s postal privatization election might be decreased, but it would be possible to retain a majority in the House of Councillors. In this way, majorities could be gained in both houses, and stable government would be preserved. Yet Prime Minister Abe did not hold a double election because he didn’t want to sacrifice the LDP House of Councillors members that had accomplished the overwhelming victory before even half of their terms were up. As a result, the LDP suffered an ignominious defeat in the House of Councillors election, and Abe lost the political power he had possessed for just over one year. Persons with great power must sometimes do things that may seem heartless if it is for the sake of national interests. If dissolution were to occur, the Diet members that had been elected in December would only have had a term of around seven months.
Under zoning that fulfills the “increase by zero, decrease by five” concept, we should allow the citizens to make judgments in a constitutional, open, and aboveboard way. Considering Abe’s current popularity, if he took the decisive action of carrying out a double election, the LDP would certainly gain an overwhelming victory. It’s not impossible that the LDP would gain two thirds of the parliamentary seats by itself. Together with the forces in favor of constitutional change, the required number of seats for proposals would be ensured in a reliable way. This would also impact the House of Councillors members that were not re-elected; I think many Diet members would be in favor of reforming Article 96. This would also be a good opportunity for the LDP to cut itself loose from its alliance with the NKP, which has worked to crush the LDP’s policies.
Nearly 70 years have passed since the constitution was enacted. Now, constitutional reform - the LDP’s dearest wish since its formation - seems likely to be realized. One idiosyncrasy of the Japanese people is that we are poor at choosing one of three or four choices; we are better at deciding if we are for or against a single point in question. The most formidable enemy that will oppose a double election is the forces in the LDP that want to protect the current constitution. I think the LDP would win in both houses if it revealed the members of the constitutional protection faction and pro-China faction - who can rightly be called traitors - by pressing them to state if they are for or against constitutional reform, in imitation of Koizumi’s postal reform election. The LDP’s stance should be one of not giving official recognition to people who oppose constitutional reform, and of sending “assassins” to take them down. If the LDP lets this chance slip away, I believe there will never be a second opportunity for constitutional reform. They must start with Article 96. To that end, Prime Minister Abe should select a double election with a do-or-die spirit.
A double election would be a type of surprise attack. With the LDP’s complete victory attained by dissolving the NKP alliance and drawing the other parties at once into an election campaign without giving them time to prepare, an independent administration would be established. In this away, stable government administration would be possible with cooperation from portions of the Japan Restoration Party, Your Party, NKP, and DPJ. First Article 96 of the constitution should be amended, followed by discussions on other articles including Article Nine.
After making it possible for proposals to be made through a majority of Diet members, multiple amendments should be completed and the constitution should be changed to one that is always in tune with the era. Though constitutional reform, Japan could grow increasingly stronger, reject foreign interference in domestic affairs and things that are in accordance with unfounded facts, and aim to be an economic power once again. As I mentioned before, stock prices and exchange rates are only halfway returned to their status during the previous Abe administration, so there is still room for growth. If Japan were to strive to be a country of cutting-edge science as well as a travel destination, the economic condition would grow better. And if it was decided to hold the Olympic Games in Tokyo, China would meet Japan halfway in order to improve the relationship between the two countries, and the number of tourists visiting Japan would increase significantly as well.
In the realm of economic measures, as I have long asserted a plan to double the floor space of residences, and measures making it easier to get low-interest housing loans, would be effective. In addition to people who have experienced credit card-related troubles, there are many cases in which people cannot receive loans due to trivial conditions such as annual income, insufficient number of years of continuous work, etc. But the biggest issue is insufficient down payments because of the inability to receive loans for the full amount of the residence. Even people who have sufficient income lack enough savings, so many of them live in rental housing while paying expensive rents.
The subprime loans that were so popular in the U.S. are actually housing loans for people with low income, who would not be able to receive loans otherwise. With subprime loans the burden of interest is kept low for the first few years and then rises all at once afterwards. They are applied for based on the scenario of rising residential prices, and of switching to regular prime loans using the increased property value as collateral. This worked fine while real estate prices continued climbing, but when the price stopped rising and began to fall, it was not possible to switch to prime loans and many people could not repay their loans due to the high interest. Consequently, the prices of financial products including subprime loan rights - which were popular due to their high ratings by fraudulent classification companies - dropped sharply. This resulted in a credit crunch at financial institutions, and led to the bankruptcy of Lehman Brothers.
If proper rating had taken place, these financial products would not have been rated highly. The provision of loan capital would have been curtailed, and major financial unrest would not have occurred.
Deflation has continued in Japan for the past 20 years, but the possibility is still high that prices - focused on buildings in central Tokyo - will rise.
To boost the economy at one fell swoop, regulations should be eased in areas where property values are expected to rise in the future. It will be necessary to take measures to the tune of providing subprime loans limited to around three years only. If efforts were made to accomplish revitalization by loosening financing conditions, a ripple effect would be created in the wider residential industry, and would rapidly spread to and benefit other industries as well. This would open up a path towards ridding Japan of deflation. Over the next three years we should relax loan requirements and work for economic recovery by fully increasing the debit balance for housing loans - without being afraid of a small amount of irrecoverable debt. Afterwards political measures should be fine tuned, and continual impetus should be given for vigorous residential construction, such as favorable treatment through taxation. We should lessen the tax burden on people building large-scale homes where three generations can live together, and should work to revive the extended family system. Loans should be given in fields that bring happiness to people, such as housing. In this way, the economy would be rehabilitated.
The three-year period between next double election and the one that follows will certainly be a prosperous time. The last two years of APA Group’s five-year plan entitled “Summit Five” are also included in this period. In the first half of Summit Five alone, we successfully acquired 48 buildings in the heart of Tokyo. Among these, the current prices of some buildings have grown by 30% or doubled compared to the purchase prices. When acquiring properties during the second half of the plan, in addition to the regular investment standard amount, I intend to add the increased amount from the properties obtained in the first half as a type of “reverse averaging.”
Through Abenomics the economy will improve, and we can anticipate the greatest prosperity ever experienced. Japan can even unseat China as the country with the world’s second largest GDP. China and Korea, which have developed by pilfering technologies from Japan, will only collapse in the future. In particular, I suspect China will be exposed to the danger of division in the future due to explosions of dissatisfaction caused by growing disparities. As the Abe administration becomes a long-term one, I am sure Japan will experience another Golden Era. To that end as well, I hope Prime Minister Abe will take this chance to be resolute and embark on a double election.