Japan: Where did Fumio Kishida go wrong?

Long-anticipated, Japanese Prime Minister Fumio Kishida opted out of re-election as leader of his ruling Liberal Democratic Party (LDP) and chose to step down from his post next month. Meanwhile, Shigeru Ishiba, former defence minister, said on Saturday he would run in the ruling party’s leadership election, which is to be held on September 27 to pick Kishida’s successor.

In Japan, Kishida is known for his pro-active approach to foreign policy, calibrating East Asian affairs with allies to a peaceful place and deepening US-Japan relations amid various economic difficulties. He assumed the office of Prime Minister just after the COVID outbreak settled, but its lasting effects remained on the domestic front. The economy wants a much-needed boost, but the export calculus was not in his favour.

Kishida chose to work on his idea of ‘ New Capitalism’ to ramp up domestic consumption through manifold efforts like structural wage growth, invigorating domestic investment, and transitioning towards a digital society. He failed to implement these very much necessities of the country due to domestic denial and fractious policy measures.

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The Bud of Refusal

Fumio Kishida decided to push reforms without his consensus-building style within the party as well as in the government. The two major factions of the LDP decided to deny his escalated claims to fix the economic mismanagement through a high degree of domestic investment under the PPP model surpassing 100 trillion yen. In parallel, his cabinet colleagues also questioned the certainty of investments from the private sector in the long term. Many Keiretsu and Zaibatsu questioned the sustainability of the new inflationary policies, followed by a sharp rise in domestic wages and the downward spiral of the Japanese cost-cutting economy.

On the other hand, his party LDP was rocked by the slush fund scandals in which many of his cabinet colleagues were also tainted. The party’s relationship with the controversial Unification Church tarnished his government’s image, which later sank to the greatest depth as former PM Shinzo Abe was assassinated by a member of the same organisation.

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Public Disaffection

Kishida’s efforts to revolutionise Japan under Society 5.0 through multiple measures of digitalisation irked the local populace as its security element and ability to drive people without limits raised major concerns. The digital twining of cyberspace and physical space integrating day-to-day executive systems seems a far thing for them. This ‘ Moonshot R&D’ approach was aimed to attract masses with ambitious goals resolving societal issues, but it was outright rejected by the people due to its overly scientific utilities.

His efforts to promote heavy investments through inclusive stakeholder policy were refused by major conglomerates in targeted sectors of social development. It attracted people’s discontent to his promised virtuous cycle of growth and distribution of financial resources among the middle class. Gradually, it resulted in plummeting approval ratings in national surveys, eroding public support for him and his party, the LDP. At the time of his succession from PM Yoshihide Suga, Kishida had a 54 per cent approval rating, which deteriorated to 25 per cent recently. In addition to that, his cabinet’s approval rating hit a new low of 15.5 per cent.

Party’s Conundrum

Due to the PM’s plummeting appeal towards the public and eroding support for the party, the LDP sniffed public discontent with the current cabinet. Due to numerous scandals within the LDP (unrecorded political donations), the party has been searching for months for a potential successor to Kishida to cleanse its image under a new prominent face. LDP’s entanglements with the former Unification Church and slush fund scandals filled discontent with their junior political ally, Komeito. So, it was a must-do for the LDP to do an overall cleaning of their fragile future policy projections for upcoming general elections. The clearest way is to remove Kishida and his cabinet immediately.

Also, Kishida completed a three-year term as a leader of the party, which is considered an average leadership tenure in LDP. Many factions within the party want new leadership to takeover domestic policy revival as their public support is rapidly shifting towards opposition parties, mainly the Constitutional Democratic Party of Japan (CDPJ) and the Japanese Communist Party (JCP). Kishida’s policy obscurity eroded support from his own senior cabinet colleagues of other party factions, and he is not in a position to say, ‘I’m special; I need more time to fix it’.

Currently, LDP controls both houses of the National Diet, providing it leverage to reshuffle the current administration to portray ‘reborn LDP’ with a much clearer national vision under new leadership. Kishida’s ouster will be used heavily in the coming general elections by the LDP to mark a significant step favouring the nation’s mood rather than backing the incumbent leader. The new leader chosen by the party in September 2024 will be tasked with effectively implementing neo-liberal policies and regaining public trust at the earliest.

Sharp rise in popularity of opposition parties among the Japanese populace due to unpopular opinion about Kishida and his cabinet turned his own party against him. LDP doesn’t want to lose its reigning empire since 1955 (except for four years) to the newly entrants born after Japanese resurrection. It has been seen that rather than turning his party in a new direction, the party itself drove his policies towards unclear domestic objectives.

Economic rebuttal

Brute failure of PM Kishida’s economic policies under the idea of ‘New Capitalism’, no workable development in increase in structural wage, invigorating domestic investment, transition towards a digital society, and promotion of investment in human capital was observed. His unreal massive stimulus packages with fractured financial support under the PPP model grew disbelief in his policy plans. It is in Japan’s DNA that they never support frenzy ideas.

Historic grand depreciation of Yen (¥) against US Dollar ($) increased inflation pressures on the Bank of Japan (BOJ) and budgetary measures by policymakers. Another policy failure was that the ‘asset income doubling plan’ was rejected by market players under (re)distribution measures. Many announced subsidies and direct benefit plans never reached the locals, especially in countryside regions.

Among many, one issue related directly to the public— inflation countermeasures by his cabinet—has fallen flat head in the last six months. The rapid rise in prices of daily needs put pressure on Japanese households, resulting in sour acceptance of Kishida’s economic plans. The American rate cut weakened the Yen to a historic low, leading to an unexpected increase in food inflation and vital imports like fuel and medicines. It impacted the elderly class steadily, which is a major opinion maker in Japan.

Overall, Kishida’s heavy focus on international affairs rather than tackling domestic issues timely and assiduously penalised him a big price. His bonhomie with the US escalated geopolitical tensions with China and a historic regional imbalance in strategic alignments in East Asia. His major focus remained with the greater Indo-Pacific throughout his tenure, undermining national issues and their importance to voters.

Poles apart, Kishida successfully led Japan to end COVID thwacks, strategic amiability with the US and South Korea, unconditional support to boost defence spending, and ditched the corporate profit-driven trickle-down economy in favour of household-led economic principles. One can blame him for his extravagances in focussing on big structural issues, but his tenure served the rightful fixes necessary for Japan. His successor will surely think about what really brings Kishida down, as he was doing everything fine for the long-term well-being of his country.

Kishida’s tenure will be remembered for international alignment efforts more than domestic ones. His decision to not run for leadership will give Japan its 101st Prime Minister in just around 70 years of the 1955 System.

The author is a PhD Researcher at Department of East Asian Studies, Faculty of Social Sciences, University of Delhi. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.