Business

Comment: Japan’s premier Shinzo Abe pays price of poor work practices

It’s ironic that the illness that cut Shinzo Abe’s premiership was worsened by the disease he set out to cure; Japan’s self-destructive work practices.

For Abe’s chronic gastric troubles came after the 65-year-old had worked 147 days straight trying – and failing – to deal with the country’s Covid epidemic.

The reason, he admitted, was the cultural pressure to “gambaru” – persevere through adversity.

Gambaru seems like a fine concept, until you realise it means sick, badly performing people refusing to rest.

There were many cultural problems in Japan’s corporate culture that Abe sought to resolve when he arrived in office nearly a decade ago; the lack of women in the workplace, the refusal to engage with outside shareholders or pay regular dividends, the cross-shareholdings between corporate titans that left minority investors powerless.

In most of those areas, he can be credited with partial success.

He has got more women in work, but few still break the glass ceiling to high-up jobs; cross-shareholdings were untangled although the drive ran out of steam in latter years; boards have become more willing to engage with shareholders but not in all companies.

Investors have responded well – the stock market doubled.

There were abject failures, too. The appalling treatment of Carlos Ghosn, the Nissan CEO jailed for months without trial before escaping the country, highlighted a dismal, cronyist judicial-corporate system that still deals badly with foreigners.

It risked setting the country’s international reputation back years to the treatment meted out to Olympus chief executive Michael Woodford, drummed out after blowing the whistle on an accounting scandal.

Japan’s coronavirus measures have been inconsistent and, after initially holding down the disease’s spread, are now blamed for a late surge and concerns about its hospitals’ ability to cope.

But where Abe undoubtedly succeeded was in reining in the deflation that plagued it during the so-called Lost Decade that preceded him.

Abenomics’ reforms based on the “three arrows” of government spending, monetary easing and structural reforms did jolt the economy out of its torpor, at least until Covid arrived.

Now, as the pandemic risks tipping Japan back into another deflationary morass, the country must opt for a continuity candidate to replace him.

One just hopes he (and it will be a he) is also a moderniser, and has a more healthy approach to gambaru.