NEWS,22.07.2013

Japan's Abe says he will focus on economy

Japanese Prime Minister Shinzo Abe, fresh from a strong election victory, vowed on Monday to stay focused on reviving the stagnant economy and sought to counter suspicions he might instead shift emphasis to his nationalist agenda.
The victory in parliament's upper house election on Sunday cemented Abe's hold on power and gave him a stronger mandate for his prescription for reviving the world's third-biggest economy.
At the same time, it could also give lawmakers in his Liberal Democratic Party (LDP), some with little appetite for painful but vital reforms, more clout to resist change.
"If we retreat from reforms and return to the old Liberal Democratic Party, we will lose the confidence of the people," Abe told a news conference on Monday.
He emphasized that his priority remains proceeding with his "Abenomics" programme of hyper-easy monetary policy, government spending and economic reform, describing it as the cornerstone of other policy goals.
"It is not easy to overcome 15 years of deflation," Abe said.
"It is a historic project. We will concentrate on that. We won't be able to strengthen the financial base for social security without a strong economy. The same goes for security and diplomacy."
Abe's LDP and its coalition partner, New Komeito, won 76 of the 121 seats contested. Along with seats that weren't up for election, the bloc now has a commanding 135 seats in the 242-seat upper chamber.
The win also raises the chances of a long-term Japanese leader for the first time since the reformist Junichiro Koizumi's rare five-year term ended in 2006.
It also ends a parliamentary deadlock that began in 2007 when Abe, then in his first term as premier, led his party to a humiliating upper house defeat that later forced him to resign. The LDP remains short of a majority on its own.
Ever since Abe stormed back to power with a big win in a December lower house poll, some - including Japanese businesses with a big stake in the matter - have worried the hawkish leader will shift focus to the conservative agenda that has long been central to his ideology.
That agenda includes revising the post-war pacifist constitution, strengthening Japan's defence posture and recasting Tokyo's wartime history with a less apologetic tone.
Despite the hefty win, Abe's mandate was undercut by low voter turnout, with 52.61% of eligible voters casting ballots, more than 5 percentage points below the turnout in the last upper house poll in 2010. That could keep up pressure to stay focused on the economy.
"Three faces"
For now, many experts suggest, Abe will stick with economic matters as he tries to beef up his so-far disappointing economic reform plans. He also confronts a decision on whether to go ahead with raising the 5% sales tax to 8% next April, part of a planned doubling by October 2015 aimed at reining in Japan's massive public debt.
"My understanding is that Abe-san has three faces: Abe as right-wing, Abe as a pragmatist, Abe as the economic reformer," said Shinichi Kitaoka, president of the International University of Japan.
"He has been showing the third face so far and will try to do the same after the election."
Still, Abe is moving towards security policy changes that mark a big shift in a country that has prided itself on pacifist ideals even as it built up a military bigger than Britain's.
Abe reiterated on Monday that he wants to debate changing a self-imposed ban on exercising the right of "collective self-defence", or aiding an ally under attack.
The ban means Japan would be unable to intercept an enemy missile fired at a US navy ship, Abe noted, which he said would call into question the US alliance itself.
Abe's government is also reviewing the possibility of acquiring a preemptive strike capability and creating a Marine force to protect remote islands such as those at the core of a territorial row with China.
One clue to how Abe intends to proceed on the touchy topic of wartime history will be whether he visits the Yasukuni Shrine for war dead, where Japanese leaders convicted as war criminals by an Allied tribunal are also honoured, on the emotive Aug. 15 anniversary of Japan's defeat in World War Two.
A pilgrimage to the shrine would outrage China, where bitter memories of Japan's past militarism run deep, and upset Washington, which fears a further fraying of Tokyo's already fraught relations with its neighbours.
Abe moved quickly to improve ties with China and South Korea at the start of his first 2006-2007 term but it is unclear whether he will repeat that success in his second.
He has since taken a tougher stance towards Beijing, but reiterated on Monday his "door is always open" to diplomacy.
Ties between China and Japan have been seriously strained by territorial rows and feuds over wartime history.
Concerns are simmering about the risk of an unintended clash near disputed isles in the East China Sea where Japanese and Chinese vessels have been playing a cat-and-mouse game for months.
"In that environment, something could go wrong," said Michael Green, Japan Chair at the Washington-based Center for Strategic and International Studies. "That's the Black Swan."
Abe again said he wants to revise the 1947 constitution, drafted by US occupation forces after Japan's defeat and not altered since, although he made clear that was a long-term goal.
Conservatives see the constitution as not only restricting Japan's right to defend itself but as responsible for eroding traditional mores such as duty to the state.
The LDP and smaller parties that also favour revising the constitution failed to obtain the two-thirds majority required in both houses before a constitutional revision can be put before the government in a referendum.
The LDP's coalition partner is cautious about changing the charter's signature war-renouncing Article 9 which, if taken literally, bans maintenance of armed forces.
Sunday's election also left many wondering about the future of a competitive two-party democracy in Japan.
The opposition Democratic Party of Japan, which surged to power in 2009 only to be ousted last year, suffered its worst drubbing since its founding in 1998. 

Japan ruling party wins elections

Japanese Prime Minister Shinzo Abe's ruling Liberal Democratic Party (LDP) won an overwhelming victory in elections for the upper house of parliament, recapturing control of the chamber, final returns showed on Monday.

The conservative LDP won 65 seats and its ally, the New Komeito, captured 11 seats in Sunday's voting. The ruling coalition had needed 63 for a majority.

"I must respond to people's hopes that I will bring about [an economic recovery] that they can actually feel," the premier said on Sunday night.

Abe, who took office in December, promoted aggressive monetary easing to prop up the economy and appealed to voters to support his economic policies as he vowed to pull the country out of 15 years of deflation.

On Sunday, the main opposition Democratic Party of Japan grabbed only 17 seats, its worst showing in an upper house election since its foundation in 1996, while the Japanese Communist Party made significant leaps, winning 8 seats, the biggest number since 1998.

"It is a crucial step forward for us to take the offensive" against the LDP, JCP leader Kazuo Shii told a news conference.

"Citizens are concerned that the LDP will go out of control," he said.

In the 2007 upper house elections, the LDP led by then-premier Abe suffered a crushing defeat, losing a majority for the first time in its history.

The upper house has elections for half of its 242 seats every three years, and this year 433 candidates competed for the 121 seats.

Voter turnout in Sunday's elections was estimated at 51.57%, the lowest since the 1995 race, according to a tally by the Kyodo news agency.

Detroit not banking on Fed help - city

Detroit must dig itself out of the hole it created and cannot wait to see if the federal government will come to its rescue, the city's emergency manager said on Sunday.
Kevyn Orr, charged with guiding the collapsed Motor City out of the largest municipal bankruptcy in US history, said any outside assistance would be "great" but he is not banking on it.
"Hope is not a strategy from my perspective. I can't plan on the basis of what may or may not happen or what help may or may not come," Orr said on "Fox News Sunday."
"We are not expecting the cavalry to come charging in," he said. "We have to fix it because we dug the hole."
Detroit filed for bankruptcy on Thursday, setting the stage for a costly court battle with creditors and opening a new chapter in the long struggle to revive the cradle of America's auto industry.
If approved by a federal judge, the bankruptcy would force Detroit's thousands of creditors into negotiations with Orr to resolve an estimated $18.5bn in debt.
Detroit Mayor Dave Bing said he was talking to officials in Washington about what they could do to help.
"I'm not sure exactly what to ask for. I mean, money is going (to) help, no doubt about that, but how much?" Bing said on ABC's "This Week."
The mayor has had no executive authority since Orr's appointment as emergency manager in March.
Michigan Governor Rick Snyder told CBS' "Face the Nation" the city's problems had been 60 years in the making and he saw no prospect of a federal or state bailout.
Detroit has been hit hard by the move away from industrial manufacturing in America since the 1950s, its problems compounded by chronic mismanagement and a dwindling population. Retirees now far outnumber active workers among the city's 700 000 residents, and unfunded pension liabilities are a key source of its problems.
After the economic collapse of 2008, Washington injected billions of dollars into automakers General Motors and Chrysler as the first step of a quick bankruptcy process. But the federal government made no promises this time.
Vice President Joe Biden said on Friday said it was unclear whether Washington could help.
Steven Rattner, who led the auto industry restructuring in 2009, said it would be a mistake for Michigan and the federal government not to provide funds for the city.
"America is just as much about aiding those less fortunate as it is about personal responsibility. Government does this in so many ways; why shouldn't it help Detroit rebuild itself?" Rattner wrote in an opinion piece Friday in The New York Times.
The bankruptcy led investors to dump the city's municipal bonds on Friday but Orr deflected criticism that it will be hard for investors to lend the city money again.
"The reality is, they are going to look at the credit rating of a rehabilitated city. And if that city is capable, they're going to make rational decisions because they are financial institutions," Orr said on the Fox programme.

"After some time, after this little kerfuffle, we'll be back in business."

Biden on visit to fire up US-India ties

US Vice President Joe Biden was due in India on Monday at the start of a four-day visit designed to revive momentum in flagging diplomatic ties and fire up bilateral trade.
Biden, the first vice president to visit India in three decades, will meet senior leaders including Prime Minister Manmohan Singh in New Delhi before heading to the financial hub Mumbai to deliver a keynote speech on the economy.
In an interview published in Monday's Times of India newspaper, Biden said the world's two biggest democracies had a "tremendous capability to work together" but should be doing more.
He also emphasised that he wanted to see an acceleration in bilateral trade, which he said was on track to meet $100bn this year.
Emerging market
"The United States has welcomed India's emergence and both nations have profited from it," the vice president said.
"India's rise as a global economic power is one of the most powerful stories of the 21st century," he added.
The announcement of Biden's visit was made during a trip to India last month by Secretary of State John Kerry, who sought to assuage Indian fears about the aftermath of next year's withdrawal of US troops from Afghanistan.
India, which has spent more than two billion dollars of aid in Afghanistan, fears any return of the Taliban, hard-line Islamists who were strong allies of Pakistan before being toppled in 2001.
Nascent talks between the US and Taliban were due to start last month after the Islamists opened an office in Doha, but they collapsed before even getting off the ground.
Renounce violence
In his meeting with Indian leaders, Biden is expected to reiterate that the US will not back any peace process involving the Taliban unless they renounce violence.
"If the Taliban are to have any role in Afghanistan's political future, they will need to break ties with al-Qaeda, stop supporting violence and accept the Afghan constitution as part of the outcomes of any negotiated peace settlement," he told the Times of India.
"We strongly support the role India has played in Afghanistan, leveraging its economic strength to improve Afghanistan's economy ...in projects that will help to ensure our common goal of a stable and prosperous future for the Afghan people," he added.
Biden will fly on Wednesday to Mumbai where he is expected to hold a roundtable with business leaders and press for stronger intellectual property protection.
While bilateral trade has grown in recent years, there is still widespread frustration among US business leaders over what they see as unfair trading practices.
Among the points of contention is India's championing of generic drugs - which advocates say save lives in poor nations - despite protests from Western drug firms.
India in turn has been alarmed by proposals in the US Congress to curb visas for high-tech workers.
Insecurities
India's Finance Minister P Chidambaram and Commerce Minister Anand Sharma were both in Washington last week to pitch for investment and discuss India's readiness to open talks on a bilateral investment treaty.
"Economic engagement in both trade and investment, though robust, is well below potential, given the opportunities a growing economy like India offers and the opportunities in the largest economy of the United States," Sharma said.
Biden will be the most senior administration official to visit India since President Barack Obama visited in 2010.
While the US has been among the world powers calling for India to be given a permanent seat at the UN Security Council, observers detect a sense of drift in ties.
"India is a natural ally of the US but... relations require greasing occasionally because insecurities have crept in, especially on the Indian side," Subhash Agrawal, of the Delhi-based think tank India Focus, told AFP.
Biden will head from India to Singapore on Thursday, where officials say he will tackle tensions over the disputed South China Sea.