The Economic Legacy Of Shinzo Abe
I WANNA start with trade because so many other countries have kind of close themselves off from trade. In recent years I mean the US famously under president trump pulled out of the trans-pacific partnership trade deal with all these other countries including Japan at the start of his presidency, and then of course, he also launched trade wars raise terrorists raised other barriers to trade, but Shinzo Abby come to the opposite for Japan. Didn't he he absolutely did under Japan became the world's biggest promoter of trade agreements signed a big trade agreement with the EU and managed to keep the trans-pacific partnership going despite trump having withdrawn the United States So essentially, ave became the standard bearer of free trade or at least for trade agreements. The reasons for pursuing all these trade agreements are of course to open up markets for Japanese exports but also through. Japan to foreign imports to put pressure on hidebound unproductive. Japanese. Industries especially, the agricultural industry force them to modernize and increase productivity. Yeah. No, there's There's a specific economic challenge I want to ask you about that Japan faces because I think it's a challenge that a lot of other countries are paying attention to to see how Japan deals with it because they also might face a future in which they. Have to deal with it, and it's that Japan's population is aging the average age is rising, and that makes it harder for the Japanese labor force to grow over time because there may not be enough young people to offset the older people who are retiring and leaving the labor force. So what did I do to confront that challenge and bring people into the Japanese labor force? He did basically two things. Number One, he tried to increase women's participation in the labor force number two, he tried to get more immigrants to come work in Japan and buzzers things by the way to be clear before a came in both of those things had been sort of stagnant for years. It wasn't much immigration and women faced a lot of barriers community labor force right? Right women had been increasing their labor force participation gradually. But this really accelerated under ave as for immigrants it had immigration had been really low before ave and then sharply accelerated under him. Okay. Let let's take those intern. Then because those are both things that other countries are also grappling with. So what specifically did obey due to lower barriers for women to enter the Japanese labor force? Well, one of the barriers is that daycare is really hard to find an expensive. In Japan. So the administration built many daycare centers although now so many women are going into the workforce that the supply has difficulty keeping up with the demand, but he built a lot more centers. He also expanded parental leave policies dramatically to make it easier for parents to go take care of kids for while, and then come back to their old jobs in addition, he leaned on companies to to. Hire, more women. He forced companies to disclose how many women they were hiring including managerial positions, and then companies that hired more women would get preferential awards of government contracts. So that was another powerful tool. Okay and what about to encourage more immigration? He did two things basically number one for skilled immigrants. They made a fast track to permanent residency which made it easier to come you know live and work. In Japan, if you had some sort of skills number two, he created a new program which was called a guest worker program, but is really an immigration program because it has a path to permanent residency and so that's for more sort of unskilled labor. Yeah and another big part of it as a gender was to put in place this team at the Japanese central bank that would use aggressive monetary policies. To really stimulate the economy and to get the Japanese economy growing fast enough that people in companies would be spending enough money to raise inflation in Japan up to two percent a year after years of low inflation and even prices falling because people were not spending very much money. So we're those monetary policies successful in your opinion they were. So the Central Bank printed a bunch of money it bought a large. Bunch of assets including the country's stock market however this. Failed to raise inflation too desire to percent target even though it got the country out of deflation. Target and there's a number of other ways in which sort of grease the wheels of financing for Corporate Japan that probably helped and so monetary policy even though they didn't hit that inflation target did help a lot.