Toshihide Suga has promised to keep Abenomics and take it forward to fulfil Abe’s unfinished agenda. He wants the central bank to take additional easing steps to protect jobs. But he is not in favour of lowering the 10 per cent consumption tax currently levied, which he sees as indispensable to social security reforms. He is unlikely to comply with the demands of some lawmakers who have demanded lowering the tax to reduce the burden of the coronavirus pandemic on households. In fact, he has hinted that he might consider compiling another economic stimulus package by the end of 2020 to “put the pandemic to an end and shift the economy to a new stage”. That would be in addition to the 230 trillion yen ($2.2 trillion) package the Abe government set out for tackling the Covid-19 outbreak, including subsidies for beleaguered businesses and promotion of domestic tourism.
There are some academics such as Etsushi Tanifuji of Waseda University who have expressed concern that Suga does not have a grand vision for Japan and is more of a problem solver at home but could face problems when it comes to foreign policy issues. But that apprehension can very well be dispelled by ministers who have the right expertise to handle the country’s foreign policy. Abe’s presence in the government also would be of immense help as he can guide the right course.
Suga’s rise in the political hierarchy to the top spot is comparable to that of Indian Prime Minister Narendra Modi. Like Modi who rose in politics to be the prime minister of the country from being a tea seller, Suga rose to become the Prime Minister from being a strawberry farmer’s son in Akita, northern Japan. Without any knowledge or blood ties unlike his predecessor Abe, Suga launched into the world of politics, started from zero, then became a local assemblyman and navigated through party traditions and history to hold the key post of chief cabinet secretary since 2012. He acted as Abe’s top government spokesman coordinating policies and keeping bureaucrats in line before reaching the top post.
Besides his focus on reviving the battered economy and keeping coronavirus under control, Suga’s longer-term challenges would include the falling birth rate and a myriad of diplomatic disputes with Asian neighbours. Suga has pledged to pursue many of Abe’s programmes, including his signature “Abenomics” economic strategy, and forge ahead with structural reforms, deregulation and streamlining bureaucracy.
On the foreign policy front, there are apprehensions that owing to Suga’s relative inexperience he might falter in his dealings. That would be an extremely pessimistic view. He has already promised to continue working toward securing the return of Japanese nationals who were abducted by North Korea in the 1970s and 1980s, and to hold negotiations with Russia to resolve a territorial dispute to clear the way for a long-awaited post-war peace treaty. Suga also looks to continue Abe’s push to amend the post-war Constitution by adding an explicit reference to the Self-Defense Forces to the war-renouncing Article 9.
As regards India-Japan ties, these would remain robust as before on all fronts. Like any previous prime minister of Japan, alliance relationship with the United States shall remain as the mainstay of Tokyo’s diplomacy and security. But seeking stable ties with neighbouring countries, especially with the Asean grouping shall be another focus area. Despite Abe’s sustained efforts he could not resolve the issue of Japanese citizens abducted by North Korea decades ago. Suga is expected to pursue Abe’s unfinished agenda. Suga is also expected to pursue Abe’s unfinished but cherished goal of revising the US-drafted pacifist constitution. If threat perception from China increases over the Senkaku islands, Suga might seek to acquire additional capability to strike enemy targets.
In conclusion, it can be said that Suga’s focus point would be first to rebuild the country’s economy that has recorded its worst post-war contraction due to the coronavirus pandemic. Suga would remember that public debt has ballooned to more than twice the country’s gross domestic product (GDP) and the gap between the rich and the poor widened further. How to shift from such an economic policy would be the focal point of his policy priorities.
Structural reforms ought to be the priority of Suga administration’s growth strategy. This would entail reorganization of small- and mid-sized firms with a view to encourage market competition. Unless this is done, Japan would not be able to recover from a prolonged slump of nearly 30 years since the bubble economy burst.
The establishment understands that the small and midsized companies are hit hard due to the Covid-19 and if these firms bearing 70 per cent of the nation’s employment were to go out of business, it could lead to the collapse of Japan’s economic foundations. Therefore, supporting these firms and protect competitiveness would be one of Suga’s priorities.
Whatever might be the strategy, the ultimate aim ought to be to strike a balance between competition and distribution in order to secure a sustainable economic growth and provide a viable social security system that could create a liveable country amid a declining birth rate and aging population.
So, no major policy reversals are envisioned with Suga at the helm. Jumpstarting the economy and containing the virus would be Suga’s immediate priorities. Managing tensions with China over Senkaku could be another focus area. In the light of this, ties with the Quad countries could be crucial for Japan and Suga is expected to activate this process. Suga shall be happy that Abe has assured of his support and guidance in any of the policy initiatives that he would undertake. India-Japan ties shall remain on track and it can only assume robustness as geopolitical and geo-strategic situation in the region would only draw them closer to see deeper convergences of interests. (Concluded)
The writer, a leading expert on Japan, was formerly Senior Fellow at the IDSA