Who will be Japan's next (LDP) Prime Minister ?
Article thumbnail of Japan’s National Diet Building, 2009, courtesy of Wikipedia Commons
With Suga Yoshihide's abrupt and unforeseen decision not to run for re-election as leader of the Liberal Democratic Party (LDP), Japanese voters are preparing for a change of Prime Minister with the internal party elections scheduled for Wednesday, followed by the National Diet elections in November, the latest.
Suga’s unpopularity had reached record levels, earning him not only the reprimands of the population, but also of his peers within the LDP, the country's main political formation. At their lowest point, polls showed 26% approval ratings - the worst performance for an LDP Prime Minister since 2012.
Strongly criticised for his perceived disorderly management of the Covid-19 epidemic and slow rollout of the vaccination programme, coupled with his stubbornness in holding the Olympic Games despite public outrage and his approximate communication skills, he leaves behind a weakened LDP, which has not won a single major election in Suga's one-year term.
But despite the turmoil, the peculiar nature of the Japanese political landscape is such that the LDP shall weather the general election relatively unscathed, despite the disaster that the past 12 months have been for Suga and the Party.
The LDP’s historical capacity to lobby and gather funds at the regional level through its “clientelistic” relationship with regional lobbies and actors, its mastery of the electoral system, the particular weakness of opposition parties, along with the Japanese electorate’s apathy and resignation to vote for the LDP by lack of a viable alternative, have made the LDP a formidable election-winning machine - one which has only been unseated twice since its creation in 1955. Its sheer size and diversity also allows the party to reach far and wide, from the centre-right moderates to the staunch neoliberals, to pro-Abe inflationists and far-right nationalists.
In fact, such is the Party's supremacy, that this year’s campaign and media coverage of the general elections has essentially been focusing on the internal elections for the LDP President - who can be almost certain to become Prime Minister given the LDP’s supremacy over the lower house of the Diet - consequently eclipsing the opposition from proper media coverage.
The LDP will choose its next President on the 29th of September through an electoral college, with its 383 parliamentarians receiving half the votes and the party's locally elected officials making up the rest.
In this situation of “democracy without competition“, pundits and investors are keenly following the internal elections seeking clues as to the future colour of Japan's economic and foreign policy.
Markets actually welcomed Suga’s departure, with Japan stocks reaching a three-decade high following the announcement. The Topix index saw a 1.6% rise on 3/09 with a decline of the Yen and Japanese government bonds in expectation of upcoming further stimulus.
The challengers
With voting restricted to elected party members, the race will inevitably be subject to the LDP’s usual factional struggle. However, the many younger members of the Diet have expressed their desire to move away from factional discipline, making the result more unclear. Nevertheless, two frontrunners have emerged in the persons of Kono Taro and Kishida Fumio:
Kono Taro : the 58 year-old, Georgetown-educated, social media-savvy and English-speaking Minister of administrative reform enjoys high levels of popularity with voters - making him the safest bet for the Diet elections. A former Minister of Foreign affairs under Abe Shinzo, his outspokenness has made him popular with the public and younger LDP constituents, with many in the latter willing to defy LDP factionalism to back Kono.
More liberal on economic issues and an avowed deregulationist, he has called for targeted spending on sectors like renewable energy and 5G network expansion while staying ambiguous on the size of a stimulus package to absorb the shock of the pandemic crisis. He also recently retracted his criticism of Abe's bold monetary policy, saying it should remain accommodating for the time being given the current situation. He further stated that more helpful communication from the Bank of Japan regarding future monetary orientation would be necessary to support markets. In favour of an increased defence budget, he reiterated his support for the US-Japan alliance and stressed the importance of US bases in deterring China.
Kishida Fumio : With the Ministry of Defence, the Ministry of Foreign Affairs and the LDP Policy Research Council in his employ, this LDP apparatchik and former right-hand man to Abe Shinzo is a true Party insider. Although not as popular with the public as Kono, the trust he has from party heavyweights puts him in pole position for next week's ballot.
Opposed to the neo-liberal turn taken under Abe and Koizumi’s premierships, he says he has set his sights on narrowing the wealth gap exacerbated by the pandemic. He is proposing a 30 trillion yen (273 billion US$) spending package and has backed the Bank of Japan’s expansionary move to fight deflation and the pandemic. He and his faction have nevertheless placed considerable emphasis on fiscal consolidation in the past. Moving away from the Abenomics approach based on maximisation of corporate profits and trickle-down economics, he strongly stressed his intention to redistribute more wealth to households. While also in favor of increasing the defence budget, he holds a relatively moderate stance on China, asserting that Japan must balance its alliance with the United States and its relationship with China.
Takaichi Sanae : this outspoken former Minister of Internal Affairs and Communications is probably one of the most prominent female politicians in the Party. A radical and controversial figure, member of the ultra-nationalist Nippon Kaigi lobby, her contentious positions on constitutional reform, national security and her repeated visits to the Yasukuni shrine (where Japanese war deads are honoured, including some convicted in the Tokyo trials) would certainly cause turmoil in Japan and abroad.
Advocating for her own polished version of Abenomics, the “Sanaenomics”, she calls on Japan to suspend its goal of achieving a balanced budget by 2025 to focus on reaching the 2% inflation rate set by the Bank of Japan, in order to keep fiscal and monetary policy as accommodative as possible. She also strongly emphasised her aim to increase investment in the country's crisis management capabilities and set-up a new relief package in next year’s budget. Foreign policy is an integral part of her campaign, embracing her hawkish views on China to call for extensive strengthening of Japan's military capabilities. Despite prestigious support from Shinzo Abe, her radical positions and female status put her at a disadvantage in the run-off.
Noda Seiko : The last minute candidate, former Minister of Internal Affairs and current Executive-Acting Secretary General of the LDP, has made the defence of the weakest and the management of the declining birth rate issue her central priority. Whilst being a seasoned politician and a long-standing figure in the LDP, her centrism, her gender and her non-factional affiliation (as with her counterpart Takaichi) make her a long shot.
While she has not given any clear outline of her economic programme yet, Noda has traditionally opposed deregulation and was a leading figure in opposing the privatisation of the postal service under Koizumi, for which she was temporarily expelled from the party in 2005. A strong advocate of "womenomics", she distinguished herself as Minister for Gender Equality for her work on the inclusion of women in politics and the labour market. Critical of Abe Shinzo, she has consistently urged Japan to address its declining birth rate and rapidly ageing population and the long-term economic risks they pose. She has made a case, amongst other things, for "child bonds" to support measures to build a society that favours parenthood.
With less than a week to go before the election, Kono and Kishida's status as favourites is being confirmed, however, without a clear frontrunner emerging. Indeed, nothing tells us that Kono's popularity with the public and the young LDP members will translate into the internal vote - especially against Kishida and his network within the LDP. This year’s ballot is all the more interesting as the LDP hasn’t been so divided in choosing its leader in a long while. With strict factional discipline unlikely to apply this season, the outcome is all the more uncertain.