How Kishida Fumio’s first year as Japan PM is a roller coaster

Japanese Prime Minister Kishida Fumio marked the first anniversary of his assumption of office on 4 October.  It has been a roller coaster ride for him. he came to power replacing Suga Yoshihide as the leader of the LDP, thus becoming the prime minister. Thereafter he led the ruling LDP to a lower house election victory. He consolidated this further through a substantive victory in the Upper House election.

This gave him complete control over the Diet. The expectation was that with these electoral victories, Kishida was now in the saddle for a further three years in which he could undertake his governance initiatives and guide Japan to the next level of development.

An Asahi Shimbun poll conducted on 1 and 2 October, on the eve of the first anniversary of Kishida’s prime ministership on 4 October, showed the disapproval rating of his cabinet crossed 50 per cent for the first time. This increased from the 47 per cent disapproval rating of a similar poll in September. The approval rating fell to 40 per cent from September’s 41 per cent. It was the second consecutive month for the disapproval to outrun the approvals by 10 per cent. Among nonparty voters 62 per cent disapproval was recorded; though among LDP supporters, the approval rate still remained at 70 per cent.

The reasons for the rising disapproval of the Kishida cabinet is the unhappiness over the conduct of the state funeral for former prime minister Abe Shinzo on 27 September. Moreover, the unhappiness over the disclosures of links between LDP party members and the Unification Church is critical. The Abe assassin blamed Abe’s relationship with the Unification Church which misled his mother and created his animosity.

A total of 59 per cent of the poll disapproved of the state funeral for Abe; 58 per cent of LDP supporters supported it but the wider Japanese people are unhappy. Another 67 per cent of nonaffiliated voters did not support the state funeral. Interestingly, among people beyond 70 years of age, only 25 per cent supported the funeral. This was odd because normally it is the older people who support the LDP in full measure.

There is unhappiness over Kishida’s handling of the Unification Church links with the LDP. People see these as mishandled. This has a 67 per cent disapproval rate which is almost the same over the last three months.

Within the survey, 56 per cent said they did not approve of the performance of the Kishida cabinet. They will not support the opposition, but there is a greater expectation of how the Kishida Cabinet will conduct itself. A total of 64 per cent of respondents said the LDP should investigate the links between Abe and the Unification Church, which is now renamed the Family Federation for World Peace and Unification. Even among the LDP supporters, 53 per cent sought such an investigation. Statements by various individual LDP members and ministers have not drawn positive public reactions.

There are major challenges looming. With Abe gone Kishida has lost a mentor who controlled the bulk of the LDP in favour of Kishida. Kishida became stronger but without the controlling power of Abe will now dissipate. Faction leaders will reemerge and demand their own concessions from Kishida. The era of the ‘shadow shoguns’ will be back. The Party peace that Kishida wanted for the next three years to run government will now be spent in finding new allies within the party. The State funeral was a concession to Abe supporters. How to act against party members for links to the Church is perhaps beyond his control.

On foreign policy, Kishida is not making moves which are different from the Abe policy. He has stuck with the Quad and intensified his partnership with the United States. This includes increasing the defence budget, buying more American equipment, attending the NATO summit in Madrid, and joining the rhetoric against China, on Taiwan and elsewhere. Japan is a frontline ally of the US more than many European countries with regard to Russia and China.

The real challenge that Kishida now faces is the economy. The Ukraine crisis has pummeled the Japanese economy; the rise of the US dollar has weakened the yen beyond expectations. A total of 70 per cent of the survey respondents of the Asahi Survey felt that the economy was causing hardship in their daily lives. This feeling was amongst 62 per cent of younger voters, crossing 70 per cent among older voters. The handling of the price situation faces 71 per cent disapproval.

When Kishida took office, he had promised a new form of capitalism, which would increase growth and better distribute wealth. Now it is perceived that his new capitalism is not fully thought out and is more advertisement than clear targets. The world’s third-largest economy is facing unprecedented challenges which include rising inflation, disturbed global supply chains and the unending crisis in Ukraine. The rise of the US dollar which has weakened the Yen is of no help either.

Kishida’s post-Abenomics policy, was to seek two major transitions. One from the laissez-faire approach to the welfare state and the second from the welfare state to neoliberalism. The swing between market or state, public or private would need to be moderated for his new capitalism to succeed. The wealth redistribution that he seeks requires Japan’s economy to grow.

For this Kishida has broad brush ideas like investing in the training of the Japanese people, enhancing women’s role in the labour force, increasing green initiatives, digitalising the government and supporting innovation and startups.

Some analysts believe that Kishida’s idea is basically a return to the post World War II strategy of seeking high growth through close collaboration between government and the private sector. For this, they would need to pick possible successes in the new industrial climate and channel investment to sectors mentioned above which could be promising. Ultimately, they would seek to convert their winning combination with automobiles and electronics by adding the new measures to these industries.

Kishida ‘s proposal to raise capital gains tax from the current 20% met with resistance from the business groups and was not pursued. His ability to see through policy implications is called out. The yen is now at a 24 year low against the US dollar and has further put pressure on Japanese sales and caused hardship to Japanese consumers.

With the world’s largest oldest population, with 28 per cent of Japanese aged over 65, Japan’s labour market lacks mobility and is not creatively seeking immigration.

Kishida’s initial success was that he was seen as a steady hand who would not rock the boat and look for incremental changes. He could do this when the party was firmly behind him. Now with the party in a post-Abe stutter and challenges to his popularity increasing, Kishida would need to do something more spectacular than simply steadying a rocking boat.

The writer is a former Ambassador to Germany, Indonesia & ASEAN, Ethiopia & the African Union. Views expressed are personal.

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