Mis­guided poli­cies that sim­ply did not work

The Star Early Edition - - OPINION & ANALYSIS - Ken­neth Cour­tis Ken­neth S Cour­tis is chair­man of Star­fort Hold­ings and man­ag­ing part­ner of Cour­tis Global & As­so­ciates. Copy­right, The Globalist, where this ar­ti­cle first ap­peared. Follow The Globalist on Twit­ter @the­Glob­al­ist.

THIS IS A tale of two coun­tries. One of them fea­tures two decades of fun­da­men­tally mis­guided poli­cies. The other has an am­bi­tious strat­egy for re­form and de­vel­op­ment on which it is ad­vanc­ing with one pur­pose­ful step after another.

The first is Ja­pan, while China is the other. Those that are con­founded by this re­sult are quick to raise doubts about China’s path. They ar­gue that China will stum­ble at some point.

Will it stum­ble? Yes, in­evitably. Per­haps even stum­ble badly. It has in the past. But that is not the is­sue. It never is.

What counts is not the fact that a coun­try stum­bles from time to time, but how it man­ages to pick it­self up after the fall. And hon­estly how it works to un­der­stand why it stum­bled – and then proves ready to ad­just its strat­egy as a re­sult. Ide­ally, after its stum­ble, the coun­try in ques­tion gains a new sense of re­al­ism, so that it can move ahead with re­newed fo­cus and de­ter­mi­na­tion to cre­ate a bet­ter fu­ture.

Ja­pan was a re­mark­able suc­cess story from the mid-1950s, after it picked it­self up from the calamity of hav­ing launched war against all sides of the Asia Pa­cific. That suc­cess lasted through the late 1980s, when the coun­try’s econ­omy and fi­nan­cial mar­kets crashed.

Un­for­tu­nately, Ja­pan has never re­cov­ered from this crash. After the Ja­pan bub­ble popped almost 25 years ago, the coun­try has never man­aged to pick it­self up. That is largely a re­sult of failed lead­er­ship.

The role of lead­er­ship is to rep­re­sent a bet­ter fu­ture – and then to chart the course to build­ing that bet­ter fu­ture. Ja­pan has had a suc­ces­sion of gov­ern­ments with no vi­sion of where to lead the coun­try, in­clud­ing the cur­rent one. One after the other, they have rather sadly con­tin­ued to dig the coun­try’s econ­omy deeper and deeper into a hole.

The Abe gov­ern­ment, de­spite its well-ad­ver­tised de­ter­mi­na­tion to jazz up the Ja­panese econ­omy, seems to be ei­ther un­able or un­will­ing to stop dig­ging.

In ad­di­tion, it is has se­ri­ously messed up its re­la­tions with vir­tu­ally all of its neigh­bours. That lack of po­lit­i­cal cir­cum­spec­tion has eco­nomic con­se­quences. The coun­tries in ques­tion just hap­pen to be among to­day’s fastest-grow­ing economies – and Ja­pan should be do­ing ev­ery­thing it can to embrace them, not alien­ate them.

Ja­pan’s vot­ers have no­ticed. The lat­est polls show that support for the Abe gov­ern­ment now stands at 36 per­cent, the low­est recorded level since the De­cem­ber 2012 elec­tions.

With the drop in their pub­lic opin­ion support ac­cel­er­at­ing, the Abe team has launched com­pletely un­nec­es­sary snap elec­tions for mid-De­cem­ber. Their idea is to have another popular vote be­fore still more bad news now in the pipe­line hit the elec­torate. Some are al­ready call­ing this ma­noeu­vre an “elec­toral coup”.

PHOTO: BLOOMBERG

Ja­pan’s Prime Min­is­ter Shinzo Abe. The writer says Abe’s gov­ern­ment, de­spite its well-ad­ver­tised de­ter­mi­na­tion to jazz up the Ja­panese econ­omy, seems to be ei­ther un­able or un­will­ing to stop dig­ging it­self into a hole.

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