On Aug. 14, Japanese Prime Minister Fumio Kishida announced that he would step down as leader of the ruling Liberal Democratic Party (LDP) next month. Soon after, the LDP would select Kishida’s replacement, who would serve as prime minister, given the LDP-led coalition’s control of the Japanese Diet. The new government is then likely to call a snap election, in the hopes that the “honeymoon effect” would help it increase its majority. What the LDP must figure out now is which of its members has the standing with the public and within the party to lead the way to victory.
It is worth considering, first, why Kishida is stepping down. While the media greeted the decision as a surprise, it is hardly incomprehensible. Much like US President Joe Biden, who withdrew from the US presidential race last month, Kishida has a very low approval rating, running below 30 percent since November last year, owing not least to a political-funding scandal.
It was in November last year that the news broke that major LDP factions had not been properly reporting the funds they received from the sale of tickets to fundraising parties. LDP members who sold more tickets than their allocated quota were given the surplus as kickbacks. Such kickbacks were particularly widespread in the LDP’s Abe faction. (The late prime minister Shinzo Abe did not allow the practice while he was in office, but it was later revived.) Many powerful politicians were disgraced.
To his credit, Kishida was not involved in the scandal. Moreover, he responded admirably, calling for the dissolution of the LDP’s factions and dissolving his own first. Others followed, with the notable exception of the Aso faction, led by former prime minister Taro Aso. Still, as the LDP’s approval rating plummeted, so did Kishida’s.
Japanese prime ministers with approval ratings below 30 percent have always either stepped down from party leadership or ended up leading their parties to electoral defeat. Kishida probably did not want to risk such a disgrace, especially since, like Biden, he has already racked up a number of achievements of which he can be proud.
Kishida did not hesitate to join Japan’s Western allies in heavily sanctioning Russia after its full-scale invasion of Ukraine in 2022. Moreover, at a time of rising regional security threats (especially from China) and deepening uncertainty about the US’ willingness to protect Japan in the long term (particularly if former US president Donald Trump wins November’s US presidential election), Kishida took steps to ensure that Japan can take responsibility for its own security. In 2022, Japan’s government announced plans to double defense spending in five years and acquire the ability to strike enemy bases.
On the economic front, Kishida introduced a plan to expand subsidies and lump-sum tax rebates to help families with children. More broadly, he helped to lift Japan’s economy out of the doldrums. Under his leadership, zero inflation and declining real wages gave way to 2 percent inflation and positive real-wage growth.
To be sure, this process started with Abe, whose economic policy, known as “Abenomics,” broke deflation. However, not even ultra-loose monetary policy, overseen by former Bank of Japan governor Haruhiko Kuroda, could get inflation running sustainably at the 2 percent target.
Achieving that required a few shocks: In 2022 and last year, a combination of supply-chain disruptions, an energy-price surge, and the yen’s depreciation pushed inflation to 4 percent, breaking persistently low inflation expectations. However, it also required leadership: Kishida worked hard to persuade companies to offer major wage increases in this year’s “spring offensive” (pay-rise season). The average pay rise, at more than 5 percent, was the largest since 1991.
Beyond his political and economic accomplishments, Kishida has already outlasted other LDP prime ministers who, like him, belonged to the party’s liberal faction, known as Kochikai. Masayoshi Ohira and Kiichi Miyazawa were each in office for less than three years. Given his apparent respect for these prime ministers — for example, Kishida’s “Vision for a Digital Garden City Nation” has roots in Ohira’s “National Garden City” initiative — Kishida is likely proud to have remained in office longer.
Japanese media suggest that 11 LDP members are preparing to vie for Kishida’s position, but a few stand out. Takayuki Kobayashi, who announced his candidacy just a few days after Kishida announced that he would not run for re-election, is a conservative former finance ministry bureaucrat, meaning that he would likely place a high priority on fiscal discipline. At just 49 years of age, he might appeal to an LDP that is eager to escape the shadow of the fundraising scandal and the power politics that characterized the old faction structure.
Another young candidate is 43-year-old Shinjiro Koizumi, who served as the environment minister in the Abe and Suga Cabinets. The son of former prime minister Junichiro Koizumi — who enjoyed a high approval rating for his colorful language and success in following through on his promises (most notably, the privatization of Japan Post) — he is well-known and popular among the public, who expect him to emphasize education and family-oriented policies. A recent survey by Nikkei puts Koizumi in the front of the pack.
Other candidates are considerably older. Former foreign minister Taro Kono, 61, could be expected to pursue important structural reforms, although he will have to clinch Aso’s support if he is to have a chance. The 67-year-old Shigeru Ishiba, a conservative defense expert, surprised no one when he announced his candidacy, as he has run four times before. (In 2012, he won the first round, but lost to Abe in the second.) Two more candidates — Minister of Foreign Affairs Yoko Kamikawa, 71, and Yoshimasa Hayashi, 63 — are members of Kishida’s now-dissolved faction.
Now that he has stepped down, Kishida might be able to act as a kind of kingmaker in the LDP. In any case, several contenders will be vying for his support.
Takatoshi Ito, a former Japanese deputy vice minister of finance, is a professor at the School of International and Public Affairs at Columbia University and a senior professor at the National Graduate Institute for Policy Studies in Tokyo.
Copyright: Project Syndicate
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