Tokyo (AFP) – It was an irresistible promise: elect me, I'll bring back Japan's once-soaring economy & restore its battered national pride.
Three years later, Prime Minister Shinzo Abe is facing the enormity of his grand ambitions, & the clock is ticking.
Abe, 60, swept to power in December 2012 with a novel recipe for success, energising a one-time global powerhouse that languished in a decades-long slump, overshadowed by regional rival China.
p>The take-charge politician trotted around the globe, inking deals for Japanese firms & selling his eponymous "Abenomics" policy blitz.
"I am back & so is Japan," the two-time nationalist leader declared to an American audience.
Abe's call to action — including huge government spending & massive central bank monetary easing — had some early successes, as the yen weakened sharply from record highs against the dollar.
The drop was satisfactory news for exporters as corporate profits soared & the benchmark Nikkei 225 stock index doubled to the 20,000 level.
Japan's prime minister & president of the ruling Liberal Democratic Party, Shinzo Abe (C), and …
A fledgling economic recovery appeared to be taking hold.
But as he marks three years in office on Saturday, the scale of Abe's self-appointed task may be coming back to haunt him.
Growth has stumbled, the war on years of deflation is not yet won, & a promised overhaul of the highly regulated economy is far from complete.
"Compared to the magnitude of Abenomics' stimulus, the economy's performance has been feeble," said Ryutaro Kono, economist at BNP Paribas.
Abe's initial burst of enthusiasm — after a forgettable one-year first term that ended in 2007 — has not been matched by results, some say.
"The first half of (Abe's) tenure showed progress," said Satoshi Osanai, economist at Daiwa Institute of Research. "The second half has not been so bright."
Newly elected main opposition Liberal Democratic Party (LDP) president Shinzo Abe delivers his victo …
– 'No better alternative' –
Abe took power after a rough few years for Japan as it went through a half dozen leaders & saw China overtake it as the world's number-two economy & assume an increasingly assertive role in Asia.
It moreover suffered the shock of the March 2011 triple earthquake, tsunami & nuclear disasters, which dealt another blow to the economy.
Facing summer elections, Abe's popularity is hovering around 50 percent, relatively strong considering the deep unpopularity of some of his policies.
His bid to bolster Japan's defence posture by diverting from the traditional interpretation of the pacifist constitution — which could see Japanese troops go into battle for the first time since World War II — angered neighbours China & the Koreas & was bitterly opposed at home & sparked rare street protests.
An unpopular push to switch on nuclear reactors shuttered after the 2011 disaster has moreover done little to boost his appeal.
Japan's Prime Minister Shinzo Abe swept to power in December 2012 with a novel recipe for succes …
"(Abe's) tremendous advantage is that voters think there is no better alternative," said Robert Dujarric, director of contemporary Asian studies at Temple University's Tokyo campus.
A key reason, observers say, is that a weak & fragmented opposition has been unable to mount a serious challenge. As a result, Abe is tipped to tighten his grip on power in next year's upper house elections.
– 'Painful reforms' –
Meanwhile, Japan's jobs-for-life culture, a cornerstone of its post-war economic boom, has given way to more part-time & unstable contract work.
The country moreover has one of the world's biggest national debts, a problem aggravated by a demographic decline that will see a shrinking labour force made to cover the soaring social security costs of the fast-ageing nation.
The International Monetary Fund has trimmed its growth projections while credit agencies have cut their ratings, amid growing doubts that Abe's economic plan will work.
Even Abe's key constituency — Japan Inc — is not playing ball. The premier is struggling to obtain firms whose bottom line benefited from his policies to share the spoils with employees.
Wage hikes, he says, are key to winning the war on deflation, which held back growth for years as consumers delayed spending in the hopes of getting goods cheaper down the road. That injure firms' expansion & hiring plans.
Abe recently pledged to re-focus his efforts on fixing the world's number-three economy & beef up social programmes, as he tries to lure more women & the elderly into a shrinking workforce.
But his legacy hangs on whether he can obtain tough on overhauling Japan's rigid labour market & tame the spiralling costs of the national pension system, observers said.
Japan has no time to lose as a brief growth jolt from Tokyo's hosting of the 2020 Olympics could donate way to another long-term economic slide, warned Hideo Kumano, chief economist at Dai-ichi Life Research Institute.
"After the (summer) election it would be a tremendous opportunity to carry out painful reforms…(they) need to happen now."
Politics & GovernmentBudget, Tax & EconomyPrime Minister Shinzo AbeJapan