World Leaders Should be More Like Japan PM Abe

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Published June 25, 2014

| FOXBusiness

It’s not all Barack Obama’s fault that six years into his presidency, he’s losing his global mojo. Time will do that, and our massive debt isn’t exactly helping. After all, beggars can’t be choosers. So it’s not surprising that Vladimir Putin toys with us, Syria dismisses us, and much of the world seems to ignore us. But the thing about global leadership is that it tends to abhor vacuums. If someone is falling, someone else should be rising. That’s the vacuum verve. The question is who is filling that vacuum.

Let’s just say it’s not who you think. It’s not the leaders grabbing the headlines; so go ahead and act surprised when I say it’s not Mr. Putin. History suggests those who make a difference in history actually start out doing so very quietly – not by shouting outside their country, but first changing things inside their country. Such leaders recognize intrinsically you have to first wow your own people before you try and wow all people. For all his bluster, Putin has yet to do that in Russia. Just like President Xi Jinping has yet to convince his country’s restless and growing middle class in China that it is even remotely close to the economic powerhouse it showcases to the world. Not quite, and not quite…yet.

Enter Shinzo Abe. What, the name doesn’t ring a bell? Abe-nomics draws a blank? Pity, because for my money, Japan’s prime minister is perhaps this planet’s prime leader. More of a marvel than Merkel, as in German Chancellor Angela Merkel. And more keyed in than Cameron, as in British Prime Minister David Cameron. They’re better known, but their parties have seen better days.

Not so for Abe’s ruling Liberal Democratic Party, on the rise and now, taking names. Much of that owes to Abe himself. He’s sharp. He’s smart. He’s direct. And, he’s funny. He once zinged a reporter who claimed he was acting too much like a rock star by saying, “Do I look like a rock star to you? If so, please alert my family.”

And Abe is quick, very quick – quick to address economic troubles and getting quick at addressing political scandals that routinely engulfed his many predecessors. The latest proof – Abe’s apology for sexist taunts shouted by a party member at a Tokyo assemblywoman. The offending party member has since resigned, and the offended assemblywoman has since accepted Abe’s apology.

To be sure, there was great pressure on Abe to do something, but since he wasn’t the one telling an opponent to just “get married,” the prime minister could have just as easily continued ignoring the fuss. But since Abe has made inclusiveness a centerpiece of Abe-nomics, that just wasn’t an option – and business as usual political silence wasn’t an option either. That’s where the Abe difference stands out, and his mark on what had been a revolving door of nameless prime ministers stands out as well.

It’s not just what he’s done for the once moribund Japanese economy or now-soaring Tokyo shares, it’s the attitude he’s brought with it. Gone are the days of placid acceptance of sub-par growth at home, or taking a back seat to a rising China in the region. Abe’s famous for saying Japan may be the world’s third-largest economy but “that doesn’t mean Japan’s a third-rate power.” He’s taken to ripping up a post-World War II non-defense charter, to rebuild the country’s military to the new regional reality. Abe vows he will never leave Japan vulnerable to “others’ ventures.”

The message is clear: China acts up in the region, Japan responds in the region. Beijing does some saber rattling, Abe is more than happy to rattle back. He’s already challenged Beijing's territorial claims to disputed islands in the China Sea, but not as other Japanese leaders have in the past. Abe eschews the vague, quiet diplomatic channels favored by his more passive predecessors. As historian and commentator Pat Buchanan explains, the new Japan takes it directly to Beijing – loudly and forcefully.

He’s been just as in-your-face dealing with Japan’s corporate culture. For too long, Abe claims his country’s interlocking corporate structure has stifled its once legendary innovation. He’s called on companies to quit hiring among themselves, and reach out to more women, and even more foreign workers. As economist Robert Brusca has noted, it’s about breaking Japan’s notoriously insular money mentality. Such thinking might have helped Tokyo keep its focus after rising from the ashes of World War II, but it does nothing to address the challenges of the world as it is today.

Let’s step back and think of the magnitude of what Abe is saying, actually demanding. A long reclusive Tokyo either opens up to the world, or gets forgotten by it. But there is carrot to this Prime Minister’s approach – the confidence to say that Japan already has the technological prowess to make good on its new openness. Abe is famous for bragging other countries can talk a good game on free trade but Japan “has what the world wants to trade.”

When it comes to technology, he’s right. Some of this planet’s greatest innovations continue to come out of this tiny, largely island nation – high definition TV, 4K TV, plasma display, miniaturized cameras – to name a few. Japan’s also quickly becoming a biotech powerhouse, particularly in the area of molecular imaging, where the country’s famous gadget-expertise has yielded unprecedented body images that can enable the earliest reads yet of potential cancers and tumors.

Abe sings such praises. But he does so happily rattling some cages – oftentimes saying that the greatest threat to Japan’s “next greatness” comes not from outside the country, but inside the country. His latest push now is to unshackle companies from what the New York Times calls a “sprawling web of mutual shareholdings that shield company executives from the pressures of the stock market.”

Such relationships might keep those executives in power, but Abe fears it’s driving their business out the door. He wants them to take more risk, and challenge institutional stereotypes – don’t settle for the same old thing, try new things, even potentially destructive things. Abe will even reward them for the effort – pushing government incentives and credits for companies that expand their hiring practices and listen to their long-too-silent investors. That makes Abe the first global leader to essentially demand shareholder rights, and reward company bosses who hear their complaints.

Not surprisingly, comfortable corporate interests aren’t too comfortable with Abe’s in-your-face approach to their matters. They say government should stay out. Abe argues he has no plan to stifle their creativity, just reward those who aren’t afraid to be creative. In so doing, Japan’s feisty leader has put the country’s corporate culture on notice – appreciate what’s going on in the world, and change the world, by listening to and welcoming input “as you do money” from the world.

It is easy for politicians to give lip service to change. But now and then, a leader emerges who turns conventional wisdom on its head by bringing change. Abe’s concrete reforms to goose housing and spread the wealth have already turned around the country’s embattled real estate industry, and helped awaken Japan from a more than two-decade-long deflationary funk. It’s why he enjoys poll numbers that would be any world leader’s envy, and make even Ronald Reagan smile. Because like Reagan, this conservative firebrand recognizes that inherent in changing a society is making voters not only see the wisdom of change, but helping them realize…they have no other choice.

Watch this guy. Maybe someday soon, someone here will imitate this guy. We could do worse.  Come to think of it, we already are.

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http://www.foxbusiness.com/economy-policy/2014/06/25/and-award-for-best-global-leader-goes-to-abe/