A common thread appears to tie the flurry of global media coverage on Japan’s newly appointed Prime Minister Yoshihide Suga. He is described as a veteran politician with a preference for the long shadows cast in the wake of Shinzo Abe, rather than the limelight — often the fixation of the country’s dynastic political class. Suga was Abe’s chief cabinet secretary, a role akin to chief of staff and government spokesperson, making him the public face of Abe’s record-breaking eight-year tenure.
His rise through the Liberal Democratic Party (LDP) ranks was not the work of hereditary design, like most of Japan’s political elites who can trace lineages to former premiers, ministers and parliamentarians — including his predecessor, Abe himself. He is the first in nearly three decades to occupy a seat not inherited from a relative in the parliament.
Despite a combative relationship with the press, Suga has been keen to press his “outsider” story and austere background to raise his appeal and preview a few of his priorities, which lean heavily on the domestic side. After all, despite the relative successes of “Abenomics” — a combination of increased public spending, fiscal easing and structural reforms — Japan’s economy, battered by prolonged recession, is again under threat of deflation owing to the coronavirus pandemic.
Additionally, despite imbuing the domestic landscape with some much-needed dynamism after a decade of sluggish growth, the Abe administration had yet to tackle another ticking time-bomb, Japan’s ageing population. More than 20 percent of the country is over 65, and by 2030 that could climb to as much as a third. Demographics are a priority item for Suga, who is from Akita prefecture, where nearly 40 percent of the population is over 65.
It is unsurprising, therefore, that Suga’s focus will track with some of his earlier work, supporting productivity, deregulation, increased competition in the heavily subsidized agriculture sector and pressuring the telecommunications industry to lower rates. He has also shown interest in opening Japan up to migrant workers and increased tourism, mostly to spur domestic consumption and shore up declining labor productivity.
Lastly, apart from pushing for the consolidation of regional banks, Suga is laser-focused on dragging an archaic, bureaucratic Japanese government into a digital future. Its dismal initial response to COVID-19 was largely to blame for the scuttling of this year’s Olympic Games in Tokyo.
The first test of his leadership will therefore be his handling of the pandemic. For now, the country is on a declining trend in daily cases, which should be fairly easy to maintain and possibly accelerate, should Suga achieve his goal to improve coordination between ministries. The success will be measured by the reception of the re-scheduled Olympics in 2021, which should help in the general election shortly after.
The over-arching message of the incoming Suga era is the need for stability and continuity in these increasingly vulnerable times fraught with risks and unprecedented challenges, and steering clear of factionalism would afford some measure of flexibility.
However, an 8 percent contraction in the economy chasing elusive growth via Abenomics, even with Japan’s central bank doing more than others to reduce the impact of economic slowdown, will be a major headache for Suga. Not much is left in the Bank of Japan’s arsenal and there are palpable fears that any measures, such as further cutting rates — already below zero — will do more harm than good.
Persisting with quantitative and qualitative easing will leave the central bank with fewer at a time when economies are desperately in need of significant stimulus injections. It is these sorts of challenges that will determine whether Suga will persist with Abenomics, proving increasingly non-viable given the times, or carve out an alternative path to much-needed economic reform.
It remains to be seen how he hopes to achieve such lofty goals having declared the intent to persist with Abe’s policies to the point of naming a status quo cabinet, with a single notable change — the appointment of Abe’s younger brother, Nobuo Kishi, as defense minister.
Critics have panned his appointments as a gift exchange within a party assured of its continued leadership given an ineffectual political opposition. There are also concerns that Suga, who does not belong to any of the factions within the LDP, may stumble into party disputes and rivalries.
Indeed, the over-arching message of the incoming Suga era is the need for stability and continuity in these increasingly vulnerable times fraught with risks and unprecedented challenges, and steering clear of factionalism would afford some measure of flexibility. However, domestic woes aside, Japan still has the unenviable position of balancing relations between the US and China.
The new prime minister has little interest in foreign policy aside from outspoken frustration at rising anti-Japan sentiment in South Korea over Tokyo’s refusal to compensate for atrocities committed on the peninsula before the Second World War. If Suga is indeed the “Abe 2.0” many analysts expect him to be, then it is safe to assume there will be a continuation of Abe’s focus on strengthening ties with traditional allies Australia, India and the US without letting relations with Beijing sour.
Japan still has significant interests in mainland China, which provides Beijing crucial leverage in the coming post-pandemic world, where most nations are likely to decouple at Washington’s behest or simply as a matter of national self-preservation.
The appointment of Abe’s younger brother is also curious. It may be a strategic move to persist with internal LDP debates about whether Japan should acquire or develop weapons capable of striking launch sites in “enemy” territory. It is an unusually bold and aggressive step for mostly pacifist Japan, but North Korea remains a threat and recent camaraderie between Washington and Pyongyang has not calmed any nerves in Tokyo. However, Kishi has little defense experience and his selection may just be Suga’s way of maintaining a connection to his predecessor.
For the time being, Suga will run down the clock on the current term, so there is little probability of any major policy shifts aside from band-aids and palliative measures needed to cope with the pandemic. His decades of behind-the-curtains maneuvering certainly served him well in his capacity as chief cabinet secretary.
However, handling the levers of power is a different ball game from mediating squabbling factions in the LDP or presenting a united front as the government’s chief spokesperson. It is no exaggeration to say that all eyes are on Suga now, curious how he will step out of the shadows and fare in the limelight.
Hafed Al-Ghwell is a non-resident senior fellow with the Foreign Policy Institute at the John Hopkins University School of Advanced International Studies. He is also senior adviser at the international economic consultancy Maxwell Stamp and at the geopolitical risk advisory firm Oxford Analytica, a member of the Strategic Advisory Solutions International Group in Washington DC and a former adviser to the board of the World Bank Group. Twitter: @HafedAlGhwell