TOKYO – Fumio Kishida was re-elected as Japan’s prime minister by members of the Diet on November 10 after his coalition won recent parliamentary elections.
His cabinet line-up and fairly detailed explanations of his policies indicate that he is quite a bit more than the “wishy-washy” but “safe pair of hands” described by some commentators.
Still, “safe pair of hands” is most likely an accurate description assuming it means no extracurricular right-wing activities and no time wasted in petty scandals – unlike former prime minister Shinzo Abe.
Unlike his immediate predecessor, Yoshihide Suga, Kishida has so far proved to be an energetic communicator with a “sense of urgency” regarding Japan’s “precarious situation”, commentators have noted.
This has surprised many observers, given his self-effacing reticence when he served as foreign minister under Abe and his lackluster losing campaign against Suga for the post of Liberal Democratic Party (LDP) president in September 2020.
“When did Clark Kent become Superman?” asks Thomas R Zengage, chairman and CEO of Tokyo consultancy Investor Impact, Inc.
It’s a rhetorical question, the answer being: When he no longer felt bound by his duty to Abe and realized that his time had come.
Kishida also knew, as did everyone else in the LDP leadership, that a lack of charisma and engagement – the lacking elements whose absence made Suga’s resignation inevitable – would result in his own defeat.
In the LDP presidential election held in September this year, Kishida arguably showed greater maturity than his chief rival, Taro Kono. He defeated Kono 257 to 170 in a run-off election on September 29.
Abe’s proxy Sanae Takaichi, who placed third in the first round, positioned herself in far right field by declaring outright that “we need to prepare for a new war” and promising to visit Yasukuni Shrine if elected prime minister.
She lost the election, but visited Yasukuni Shrine anyway, on October 18, an action that would be taken by Koreans and Chinese as a deliberate provocation. Convicted war criminals from World War II are honored along with the ordinary war dead at Yasukuni.
These are not the kinds of things Kishida is likely to say and do, as evidenced by his appointment of Yoshimasa Hayashi as foreign minister.
Hayashi, who was previously head of the Japan-China Friendship Parliamentarians’ Union, is in favor of maintaining stable and cooperative relations with China.
Considering that China is by far Japan’s largest trade partner, a major recipient of Japanese foreign direct investment, and an assertive strategic rival, this – to a certain degree – is common sense.
On the other hand, Hayashi has promised to work with Gen Nakatani, Kishida’s special adviser on human rights, on issues including the situation in Hong Kong and China’s mistreatment of indigenous Muslim Uighurs in Xinjiang.
Nakatani was director-general of the Japan Defense Agency under prime minister Junichiro Koizumi and was minister of defense under Abe.
Kishida himself is on record as saying that he “would consider specifying” in the pages of Japan’s National Security Strategy that the country could “possess capabilities to destroy enemy missile bases.”
This is as close as a sitting prime minister has come to saying in public that Japan needs a “first-strike capability,” although that is widely believed to be consensus thinking in the government and military.
Last May, Defense Minister Nobuo Kishi told the press, “There’s an awareness that just improving our interception capabilities may not really be enough to protect the public.”
Kishi also said that Japan’s traditional 1% cap on defense spending was no longer relevant and that the amount of money spent and what it would be spent on would be determined by the rapidly changing security environment.
Kishi was appointed minister of defense by then-prime minister Suga in September 2020, and remains in the post under Kishida. Japan continues to strengthen its military and overall national security while trying to damp down tensions with China.
On the economic front, Kishida campaigned under the slogan “A Virtuous Circle of Growth and Distribution.”
Alarmed by growing inequality, he wants to build “a new form of capitalism” that generates growth while ensuring that the fruits of that growth are more fairly distributed.
The idea is to accelerate economic growth by reversing the transfer of wealth from labor to capital. Higher wages should lead to higher consumer spending, higher sales and higher profits, enabling further increases in wages.
In this, Kishida is on more or less the same page as US President Joe Biden, who wants to “Build Back Better” with high-wage union labor; UK Prime Minister Boris Johnson, who wants to build a “High-Skill, High-Wage Economy”; and Chinese President Xi Jinping with his new focus on “Common Prosperity.”
Inequality has gotten out of hand all around the world, regardless of political or economic system.
The reaction to Kishida’s “Growth and Distribution” has ranged from a general sense of approval among voters – despite losing seats, the LDP did win an absolute majority in the general election held on October 31 – to ridicule by opposition politicians who lost the election and widespread skepticism among journalists and other commentators.
What, we might ask, is “new capitalism?”
But the question, says Dan Harada, a noted authority on Japanese politics and founder of political consultancy Nagatacho Forum (Nagatacho is the district of Tokyo where Japan’s national Diet and the prime minister’s residence are situated), is not so much “what?” as “how?”
Kishida has presented numerous specifics, among them a 30 trillion yen (US$263 billion) supplementary budget; payments to households with children, single mothers, the under-employed and those suffering from the economic effects of Covid-19; resumption of the “Go To” domestic tourism subsidies; higher pay for health care workers; and tax incentives for corporations to raise wages rather than dividends.
Of these measures, only the last constitutes a fundamental revision of capitalism as it is currently practiced in Japan. And it harks back to Abe’s attempt to jawbone corporate management into raising wages.
Wages did rise while Abe was prime minister, but not enough to stop the wealth gap from widening. And Abenomics was undone by the Covid recession.
Now, with Covid infections down and economic recovery underway, the looming risk is inflation, which is back with a vengeance in America, China, Japan and elsewhere. Bank of Japan data shows wholesale price inflation at a four-decade high in October.
Japanese consumer price inflation (as measured by economists, if not household shoppers) remains low, but if corporations do not pass along their higher costs, profits and stock prices will suffer and they will be reluctant to raise wages.
This logjam must be broken if Japan is to avoid moving from deflation to stagflation and it is up to Kishida and his new government to break it. They have the votes. What they need to do now, with dispatch, is pass the enabling legislation.
If not, the circle could turn vicious rather than virtuous.
Scott Foster, a graduate of the Johns Hopkins University School of Advanced International Studies in Washington, DC, is an analyst with LightStream Research in Tokyo.