This is the latest in a series of entries looking at what we can expect in 2013. Each weekday, a guest analyst will look at the key challenges facing a selected country – and what next year might hold in store.
By Nobuo Fukuda, Special to CNN
Editor’s note: Nobuo Fukuda is a senior scholar at the Woodrow Wilson International Center for Scholars and former Jakarta bureau chief for the Asahi Shimbun. The views expressed are his own.
The victory of Japan’s conservative Liberal Democratic Party (LDP) in this month’s national elections indicated a sense of insecurity will continue to plague Japanese in 2013 on issues ranging from national defense and security to energy and the economy.
The defeat of the incumbent Democratic Party of Japan (DPJ) had long been anticipated. However, it is an open question whether the opposition LDP would have achieved a landslide victory had it not been for rising tensions between China and South Korea over territorial disputes.
Particularly problematic for Japan was the row with China over the Senkakus, a group of small, uninhabited islands administered by Japan in the East China Sea. Japanese voters were troubled over China’s aggressive tactics in trying to change the status quo of the Senkakus, with fishing boats, patrol vessels and reconnaissance aircraft being sent into the Japanese-administered waters and airspace near the islands almost daily over the past few months.
As a result, many voters chose to support the LDP, led by Shinzo Abe, the nationalistic former prime minister who vowed to change Japan’s pacifist constitution and transform the self-defense forces into a regular armed force. The LDP, along with its junior partner, New Komeito, won more than two-thirds of the seats in the 480 strong lower house of the Japanese Diet in elections held December 16.
Abe, who assumed the premiership on December 26, declared that his government would never negotiate with China over the Senkakus and promised to build a port and station government officials on the islands in order to make the territory more secure.
More from GPS: LDP won landslide, not mandate
Whether or not Abe will immediately work to translate such bellicose language into action is not clear. But with China firmly determined not to back down on the issue, it is easy to see the ongoing diplomatic crisis dragging on and even escalating to involve maritime or aerial clashes.
Abe also made clear that he would try to cope with territorial disputes by strengthening Japan’s security alliance with the United States. Having announced his intention to visit Washington on his first overseas trip as prime minister, Abe seems intent on repairing the most important bilateral relationship, which was shaken under the DPJ. But while the Obama administration undoubtedly welcomes a more U.S.-friendly government in Tokyo, it is unlikely to change its long-held policy of staying neutral on the conflicting claims to the Senkakus. This lack of support has bewildered Tokyo and weakened its case to the international community that it has an “inherent right” to the islands.
Domestically, the Abe administration will undoubtedly review the DPJ’s no nuclear energy policy and restart the dozens of reactors that were shut down in the wake of the Fukushima disaster. Such a policy shift could revive the “nuclear village,” a powerful alliance of politicians, bureaucrats, utilities and manufacturers that have clear interests in keeping Japan nuclear. Such a shift will please allies including the United States, Britain and France as they look to involve Japan in the international nuclear non-proliferation regime, manufacture and sell nuclear facilities across the globe with Japanese corporate partners and keep doing business reprocessing Japan’s nuclear waste.
But with around 160,000 Japanese displaced following the March 2011 disaster at Fukushima, fear of another disaster looms large, and if the Abe administration pushes too hard to turn back the clock on the nuclear issue in 2013, it could quickly alienate much of the public, which has become extremely suspicious of nuclear energy.
Abe’s previous stint as prime minister lasted just 12 months before he stepped down over a stress-induced illness. During that short period in office, Abe directed patriotism be taught in classrooms and the Defense Agency be upgraded to a ministry.
At the start of his second act, Abe has somewhat toned down his hawkish rhetoric and placed greater emphasis on moving the stagnant economy forward. Indeed, even before he assumed office, Abe requested that the Bank of Japan provide greater monetary stimulus to tackle persistent deflation. The LDP plans to add 10 trillion yen (approximately $120 billion) to the 2012 central government budget and spend most of it on public works projects. But whether it is reliance on nuclear power or showering the depressed countryside with promises of public works, it is clear the old guard is back with policies that were broadly ultimately rejected by the Japanese people.
The first test of whether the public will again have soured on the LDP will be in the summer of 2013, when voters pick representatives for the upper house of the Diet, where the opposition DPJ is still the largest force. Failure there could see another short-lived Abe administration.
It's doubtful, whether Abe will be able to meet some of the targets he has set. Unlike other nations that have to combat inflations, J@pan has been battling deflation, for the best part of the decade. So Abe suggested that the central bank should print an "unlimited" amount of yen as a measure to help fight the falling prices. A sudden jump in inflation could hurt the economy too.
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