As Japan’s Shinzo Abe leaves the scene, most economists aren’t thinking of India. Yet the missteps of the former leader explain why the latter’s economy is sputtering. 

The “Abenomics” public relations juggernaut inspired Prime Minister Modi’s economic Big Bang more than pundits want to admit—even today. As Indian gross domestic product plunges 23.9% in the three months to June from a year earlier, are we really still going to pretend Modinomics has delivered what was promised?

Really, good luck with that. Prime Minister Abe’s reign predated Modi’s by 516 days. But Abe’s revival scheme clearly captivated leaders from across the region including New Delhi. In fact, Abe became, for better or worse, arguably Modi’s best pal in Asia as the two men shared notes on economic reform plans.

The speed with which Japan hit a Covid-19 wall—GDP fell at a 27.8% rate between April and June—almost mirror’s India’s own about-face, growth-wise. But India’s GDP drop is exponentially worse given its lower standard of living. India is less than $2,200 in nominal terms relative to Japan’s $41,000. 

Modi is also having a challenge Japan isn’t. “India has the dubious distinction of being one of the few economies, even within emerging markets, where inflation is back above the pre-pandemic level,” says Priyanka Kishore of Oxford Economics.

Japan’s problem, of course, is the untimely return of deflationary forces. India is, by sharp contrast, “lending support to the inflation camp for now,” Kishore says. “Headline consumer inflation has averaged 6.7% in the last four months, markedly above the [central bank’s] 2% to 6% target range.”

The reasons for the inflation jump reflect badly on Modinomics. It’s not driven by rising consumer demand, but supply-side bottlenecks. Inefficiencies across the economy that Modi’s team hasn’t come close to sorting out after six-plus years in power.

It’s a muddy picture, admittedly. Coronavirus-related lockdowns brought production and distribution of many non-essential goods and services to a virtual halt. Amid these disruptions, some consumer price chaos is to be expected. But India had a so-called cost-push inflation problem before the pandemic, and now its creating control problems for the Reserve Bank of India.

That’s an unwelcome development, considering how the RBI, like the Bank of Japan, has been thrusted into the driver’s seat by a disinterested prime minister. Like Abe, Modi essentially called his central bank several years ago and said “you run the economy, I’ve got other things to do.”

Sadly, many of these other things involve nationalist pursuits. In Abe’s case, it was amending the pacifist constitution to cheer his fellow right-wingers. With Modi, it’s promoting his brand of Hindu nationalism.

All the while, the bold economic reforms both men promised took a backseat. That was always the plan. Abe saw a stock market boom and talk of bold deregulation as a means of distracting voters from his real priorities, many of which were reminding Japan’s neighbors who’s boss in East Asia.

Modi, of course, has been sticking his chest out in South Asia. And reminding India’s minorities who holds power. Yet Modi, like Abe, was elected to make their respective economies great again.

The reason Japan’s economy is stumbling now because Abe failed to follow through on his promises. The BOJ certainly held up its end of the bargain, though, easing massively, weakening the yen and pumping up corporate profits. All this did, however, was treat the symptoms of Japan’s malaise, not the underlying structural causes of that underperformance.

This pattern will sound familiar to economists in India wondering how Modi went from bold reformer to abdicating responsibly to the RBI. In fact, Modi is now on his third RBI governor. Since 2014, he’s shopped around for the most compliant central bank leader he can find.

This more talk-than-reform problem has traveled far and wide in Asia. China’s Xi Jinping, for example, has at almost every turn prioritized increased stimulus over steps to recalibrate growth engines. Earlier moves to curb the $10 trillion-plus shadow banking system have since gone away as Covid-19 weighs on China’s economy.

India’s troubles, though, require a surge of technocratic retooling. The April-June plunge wasn’t just the biggest since New Delhi started publishing quarterly figures in 1996. It was easily as bad, or worse, than many of the world’s major economies.

Abe’s Japan gets away with its complacency, to some extent, because it’s a wealthy nation with considerable household savings and other shock absorbers at its disposal. Modi’s India doesn’t have that luxury. Abenomics stumbled in Japan, never mind an India sinking as we speak. As Abe leaves the scene, so should a flailing revival movement.