Abenomics: Policy Progress So Far.....
The IMF's recent report on Japan's economic outlook highlighted Abenomics' two main areas of progress so far, and they break down as follows:
Increased female labor force participation: A huge topic previously discussed here at APAC Trends and a vital one for easing Japan's demographic crisis, the amount of women in the labour force has increased strongly, possibly as a result of increased availability of child-care facilities and cash transfers to families with children.
Japan: Female Labor Force Participation & Job Vacancy Ratio, 1994-2015
Source: IMF: Japan Country Report, 2015
Corporate governance reforms: Measures taken so far include the Stewardship Code inducing greater institutional investor activism; the amendment of the Companies Act and the adoption of Corporate Governance Code requiring listed companies to appoint outside directors on a “comply or explain” basis; and the launching of the JPX-Nikkei Index 400 comprising only profitable firms with good corporate governance and disclosure.
While these changes are to be applauded and Japan's economic outlook seems to be improving, much more needs to be done, particularly in terms of labor market reform, corporate governance and further deregulation.
As we have discussed before, Shinzo Abe has a unique window of opportunity, supported by a strong electoral mandate and a sound set of policy proposals; however, more needs to be done, and quickly, for Japan's economy to get back on track.