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Abe seeks to cement legacy but hurdles await in his final term

Japanese leader's grip hinges on next year's upper house election

Japanese Prime Minister Shinzo Abe faces a fight to stay relevant as his Liberal Democratic Party starts to consider succession. (Photo by Uichiro Kasai)

TOKYO -- As Prime Minister Shinzo Abe begins his third term as Liberal Democratic Party chief, he faces plenty of political, economic and diplomatic challenges -- not least of which being how to maintain the authority to tackle these issues.

Abe is now set to leave office no later than September 2021, barring another change to the party's charter. With an end date for his tenure now set, he will need to fight the perception that his administration is growing irrelevant as attention increasingly shifts to the issue of succession.

As Abe forms his next cabinet, what position he offers such figures as former Defense Minister Shigeru Ishiba -- his sole challenger for the LDP leadership who fared better than expected -- is a question of particular interest.

A central focus of Abe's remaining days in office will be his long-sought goal of revising Japan's pacifist constitution. He called during the election campaign for the party to submit a draft amendment during an extraordinary session of parliament to be convened this fall, seeking to secure support from conservative voters ahead of an upper house election next summer. But the hurdles to actually changing the charter are high.

His rival Ishiba has expressed concern about the rushed debate within the party on revising the war-renouncing Article 9.

"Now that the election results have come out, we must move forward as a unified front," the prime minister told reporters Thursday, looking to shut down this line of criticism.

On the economic front, Abenomics remains dependent on monetary easing and fiscal stimulus. Observers will be watching for a concrete plan to continue the fight against deflation this term. If the government cannot finally shake off deflation within the next three years, Abe's signature policy may be branded a failure.

That Abe's support did not totally collapse amid the scandals that have battered his administration owes in large part to the strength of the economy and the stock market under his leadership.

Another major factor behind the economic recovery has been the solid American economy. Yet, with the U.S.-China trade conflict clouding the global outlook, economic conditions in Japan are unlikely to improve much more.

The social security system poses another challenge. Japan's entire baby boom generation will be at least 75 years old in 2025, and the cost of their care is expected to swell further.

Abe's administration has contained the natural rise in medical costs from a graying population to about 500 billion yen ($4.45 billion) a year. But its efforts to tackle the problem have largely focused on lowering prices for expensive medications and shifting more of the financial burden onto high-income workers. It has yet to do much to rein in benefits.

Abe has come under fire for his lack of progress on getting Japan's finances in order. Many note that his administration has twice postponed raising the consumption tax to 10%.

With the tax set to rise in October 2019, the prime minister has stressed the need for measures to ensure the move does not affect purchases of big-ticket items such as cars and homes. If the economy cannot withstand this hike, talk of any further increases will likely need to be shelved. Spending wisely, rather than simply throwing money at the problem, will be key.

As for foreign policy, the Group of 20 meeting in Osaka next June presents a perfect opportunity for Abe to demonstrate his diplomatic skills ahead of the upper house election.

The Japanese leader has built a friendly relationship with Russian President Vladimir Putin, who congratulated him Thursday on his re-election. But despite Abe's efforts, the disputed southern Kuril Islands, claimed by Japan as the Northern Territories, remain under Russian administration.

Abe has also worked to forge closer ties with U.S. President Donald Trump, who sent a congratulatory tweet to his "good friend" on Thursday. But as long as Trump maintains his protectionist leanings, trade-related tensions will continue to simmer between the two allies.

Japan has sought to play a role in the efforts toward North Korean denuclearization, and settling the issue of abductions of Japanese citizens by the North in the 1970s and '80s is one of Abe's top foreign-policy goals. But the North Korea situation now revolves largely around the dynamic between Washington and Pyongyang. Tokyo has found no real openings for moving forward on its stalled talks with Kim Jong Un's regime.

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