WSJ: Abenomics’ Missing “Third Arrow: The absence of immigration reform from Abenomics bespeaks a deeper problem”
One of the things that the LDP has been good at during this election cycle has been controlling the agenda. By diverting attention away from contentious constitutional reform by talking about economic reform (or at least the promise of it), Abe and Co. have used imagery of loosing “three arrows” (monetary easing and fiscal stimulus, then eventually structural reforms). The Economist (London) on June 15 wondered if “Abenomics” had “failed before it even properly began”.
As Debito.org and others have been saying for years now, you can’t have sustained growth without a healthy and energetic workforce, especially as society ages, pensioners crowd out taxpayers, and public works continue to fill in the gaps and crowd out entrepreneurship. And if you want youth, energy, and entrepreneurialism, you cannot beat immigration and the Can-Do Make-Do Spirit of the Immigrant.
But the strong xenophobic tendencies of the LDP and the dominant fringes within the ruling side of Japan’s politics have made this currently politically untenable. And here’s the Wall Street Journal giving us their take on why a serious immigration policy should have been one of the GOJ’s “arrows”:
WSJ: If there’s one reform that’s symbolic of Prime Minister Shinzo Abe’s eponymous program to rejuvenate the Japanese economy, it’s immigration. By importing new consumers and workers, immigration is crucial to stimulating domestic capital investment by companies. By expanding the taxpaying population base, it improves the government’s fiscal position. Immigration will facilitate foreign direct investment, boosting productivity.
All of that makes immigration reform precisely the kind of bold and deep change Mr. Abe promises. But the thing that makes immigration reform most emblematic of Abenomics is that despite its importance to Japan’s future, it is almost entirely absent from the agenda…
Investors have lately panned Abenomics, rightly, for its lack of daring. Optimists hope this is a political calculation that a month before a major election is no time to introduce bold reforms, and that more and better is on the way later. But reflection on the immigration problem raises a different prospect. Any meaningful reform will be deeply disruptive—whether in terms of new immigrants let in, small farms consolidated and old farmers retired, new businesses started and old firms bankrupted. In all the hubbub about Abenomics, everyone forgot to ask whether Japan really wants the upheaval needed to restart growth. Unless and until Japanese are willing to tolerate such changes, Abenomics will be more wish than reality.