Less than a year after assuming his post, Japanese Prime Minister Shinzo Abe announced his resignation on Wednesday. His decision comes in the wake of a disastrous result for the ruling Liberal Democratic Party (LDP) in the country’s upper house elections on July 29 and continued poor polling following a major cabinet reshuffle on August 27.

A weary Abe told a hastily arranged news conference: “I’ve decided to create a new situation by resigning. It is my responsibility that my old and new cabinet could not secure the public’s trust.” Yesterday, he was admitted to hospital suffering from stomach illness, psychological stress and exhaustion. The LDP is due to decide on his successor on September 23.

The immediate trigger for Abe’s resignation was a looming parliamentary battle over the renewal of the “Anti-Terrorism Special Measure Law”, which is due to expire on November 1. The legislation was introduced by Abe’s predecessor Junichiro Koizumi in 2001 to allow the Japanese navy to refuel US warships in Indian Ocean supporting the occupation of Afghanistan.

Koizumi exploited the US “war on terror” to dispatch the military overseas for the first time since World War II without the cover of a UN “peacekeeping” operation. The special law was required to circumvent the so-called pacifist clause of the Japanese constitution. Like the subsequent dispatch of Japanese troops to Iraq as part of the US-led occupation, the refuelling operation was widely unpopular and a significant factor in the government’s upper house defeat.

Abe fully backed Koizumi’s strategy of using the US alliance to justify Japan’s remilitarisation and the adoption of a more aggressive foreign policy in North East Asia and internationally. But having lost control of the upper house, he faced the prospect of a difficult and protracted political fight to force through the renewal of the anti-terrorism law. The events of the past week compounded Abe’s dilemma.

He attended the Asia Pacific Economic Cooperation (APEC) summit in Sydney, during which he met on the sidelines last Saturday with US President George Bush and Australian Prime Minister John Howard to strengthen a new “triangular” security relationship. Bush undoubtedly told Abe in no uncertain terms that the Indian Ocean refuelling mission had to continue. On Sunday, Abe staked his political future on the anti-terrorism law, saying he would resign if it were not renewed.

On his return to Japan, Abe appeared determined during an extraordinary parliamentary session on Monday, declaring the Indian Ocean was Japan’s “international responsibility”. Referring to his broader agenda of completely revising the constitution, he declared: “We need to depart from the postwar regime by all means. I decided to stay on out of sheer belief that we must not stop this reform.”

Abe’s leadership was, however, seriously compromised. A poll conducted last weekend by NTV network showed that 55 percent of Japanese voters opposed the extension of the Indian Ocean mission. Just 32 percent indicated their support for Abe—a precipitous 9 percent drop since his cabinet reshuffle on August 27. Moreover, his revamped cabinet was already showing signs of strain with the resignation of the agriculture minister over a new financial scandal just days after his appointment.

The final straw came on Tuesday when Ichiro Ozawa, leader of the opposition Democratic Party of Japan (DPJ), refused to even meet Abe to discuss a compromise on the anti-terrorism law. Ozawa, who is pressing for early lower house elections, promised in the aftermath of the upper house elections to block the Indian Ocean mission and demand the withdrawal of Japanese air force units in Kuwait supporting the US occupation of Iraq. His stance reflects growing concerns in ruling circles that support for the Bush administration’s “war on terror” may damage Japan’s interests in the Middle East and internationally.

The following day, Abe announced his resignation. Describing the “anti-terror” law as the “central pillar” of foreign policy, Abe declared: “Japan must continue its fight against terrorism under a new prime minister.”

Unpopular government policies

Media commentary on Abe’s resignation has focussed on his failure to provide strong leadership and his “lack of gumption”. “In my almost 40 years in politics, it’s the first time I’ve seen this,” Ozawa commented on his opponent’s sudden withdrawal. Abe has been compared unfavourably with his predecessor Koizumi who held power for five years. In recounting Abe’s fall from grace over the past 12 months, emphasis has been placed on a series of scandals and “gaffes” that plagued his administration. Concerns have been raised that Japan is returning to the political instability of the 1990s and hints dropped that Koizumi should perhaps be drafted back to the leadership.

All this rather superficial “analysis” misses the main point. It was not simply Abe who was unpopular, but the LDP government and its policies. Abe was Koizumi’s protégé and supported the central planks of his mentor: the remilitarisation of Japan and a more aggressive foreign policy, along with the acceleration of the economic restructuring at home. Only the political spin was different. Abe, an LDP “blueblood”, was incapable of adopting Koizumi’s unconventional image and anti-establishment posturing. Instead, Abe tried to package the government’s right-wing and economically regressive policies under the banner of building a “beautiful nation”. His failure to do so reflects the widespread and growing opposition among ordinary working people that was already evident under Koizumi.

The high point of Koizumi’s rule came in 2005 as he attempted to push through postal privatisation legislation—an economic initiative aimed at providing a massive financial injection into the private sector. The law was defeated in the upper house with the help of LDP members opposed to ending what had been the means for financing high public spending. Rather than accepting the defeat, Koizumi expelled the LDP “rebels” and called a snap general election. By limiting the campaign to the single issue of postal “reform” and casting himself as a rebel against the LDP establishment, Koizumi was able to brush aside widespread opposition to Japan’s military involvement in Iraq and win a convincing victory.

Koizumi’s supposed political magic quickly began to wear off, however. The impact of more than a decade of economic restructuring, which intensified under Koizumi, has created a deepening social divide, including the LDP’s rural heartland, which relied heavily on government subsidies. Sections of the working class and middle classes have been hard hit by the erosion of “life-long employment” and the mushrooming of poorly-paid, casual and temporary jobs. The underlying disaffection was reflected in the eruption of an unprecedented public debate over the “winners” and “losers” of the government’s economic policies.

In July last year, Koizumi announced the withdrawal of Japanese troops from Iraq. His decision was obviously aimed at ending what had become a major embarrassment for the government, prior to his stepping down as prime minister. Opinion polls regularly showed that a clear majority opposed to Japan’s continued military presence in Iraq, despite Koizumi’s efforts to dress up the mission as “humanitarian”.

An Asahi Shimbun poll conducted in August 2006 just prior to Koizumi’s departure found that only 47 percent of respondents supported his cabinet. Only 17 percent wanted his program of “reform” to “continue as is”, while 79 percent said it should be revised or completely changed. Asked if they had felt the “pain” of economic reform, only 5 percent declared that they did not feel it at all. The remainder reported various degrees of pain, with 19 percent saying they felt it “very much”.

Abe handed over to Koizumi last September amid great fanfare over the appointment of Japan’s youngest prime minister and polls showing his standing at over 70 percent. While continuing the general thrust of Koizumi’s foreign policies, Abe, under pressure from big business, patched up strained relations with China. He pointedly did not publicly visit the Yasukuni Shrine, a potent symbol of Japanese wartime militarism, and thus alienated the extreme right-wing layers Koizumi had cultivated.

The resignations and “gaffes” that plagued Abe’s administration reflected the underlying popular discontent. After establishing Japan’s first, fully-fledged defence ministry since World War II in January, Abe’s new defence minister Fumio Kyuma was forced to resign in July following public outrage over his comments justifying the US dropping of an atomic bomb on Nagasaki in 1945. Scandals have ended the career of three agriculture ministers amid rising opposition in rural areas—one committed suicide and two others resigned.

Abe had already eased Koizumi’s policy of steadily cutting public works spending, which hit rural areas in particular. While the budget projected another 3 percent reduction, Abe allowed ministries to increase government funding for “the stability of people’s livelihood”—a step that undermined his standing among the business elite as an economic “reformist”.

There is now considerable concern in financial circles that the next government will bow to public pressure, slow economic reforms and resort to handouts to bolster public support. Morgan Stanley economist Robert Alan Feldman warned that a return to pre-Koizumi “pork-barrel” politics would create a “nightmare”, in which the equity market would suffer, bond market face higher risk premiums and a strong yen would hurt Japanese exports.

Others expressed fears of political instability. Nikko Citigroup commented: “Whoever becomes PM, we doubt that this will mark the advent of a long-term administration with a rock-solid support base. It will be effectively impossible to come up with forceful policies in support of deregulation, liberalisation, globalisation and fiscal austerity.”

Abe’s heir apparent is Taro Aso, who in the latest reshuffle took on the key post of LDP secretary general. Like Koizumi and Abe, he supports an aggressive foreign policy based on the US alliance and savage economic restructuring. Other challengers take a similar stance, but might moderate one or other aspect of the LDP program. A group of 50 “Koizumi children”, the MPs elected in the landslide 2005 victory, met on Wednesday to discuss bringing Koizumi back to office.

At this stage Koizumi has “100 percent” ruled out returning to politics. He is no doubt acutely aware that whoever takes over from Abe next week will face the increasingly difficult task of implementing an economic and foreign policy agenda in the face of widespread and mounting public opposition.