Japan must look beyond the usual suspects for its next leader

William Pesek is an award-winning Tokyo-based journalist and author of “Japanization: What the World Can Learn from Japan’s Lost Decades.”

In the end, even Yoshihide Suga could not vote for Yoshihide Suga.

Back in September 2020, when Suga replaced Shinzo Abe as prime minister, voters hoped he would be a capable, decisive leader keenly attuned to the will of the people. Instead, Suga’s decision not to run in the ruling Liberal Democratic Party’s presidential election later this month was an admission that it is time for new blood.

Much has been written about where Suga went wrong — on COVID-19, holding an Olympics during a pandemic, a lackluster economy, fresh Liberal Democratic Party scandals. It is indeed a lengthy list.

But let us consider how this is a great chance to reboot an economy buckling under the weight of a fifth COVID wave. As Tokyo considers who — and what — comes next, there are three vital considerations.

One: admit the Abe era was a bust. In retrospect, the first big clue Suga was a goner was Abe’s re-emergence on the scene these last couple of months. After quitting for health reasons, just as he had in 2007, Abe receded to the background.

But Abe’s return in a series of public events in July seemed tacit recognition that the low-energy Suga needed an assist. The other clue things were slipping away: Abe was talking about Taiwan, code for the LDP still being tough on China.

Suga’s premiership flamed out partly because he was Abe’s chief cabinet secretary from 2012 to 2020, a deeply disappointing period for economic change. Abe returned to the top just as voters were absorbing the idea that China had surpassed Japan in gross domestic product terms.

Despite huge parliamentary majorities, great approval ratings and all the time in the world to get big things done, instead of cutting red tape, modernizing labor markets, catalyzing a startup boom, empowering women, boosting productivity and attracting international talent, Abe mostly left things to the Bank of Japan. He did hold Donald Trump’s hand, even as the U.S. president undermined Tokyo’s priorities at every turn.

Shinzo Abe speaks in Ube, Yamaguchi Prefecture, on Sept. 3 after Yoshihide Suga announced his decision: the Abe years were a lost opportunity to revive Japan’s mojo.    © Kyodo

The Abe years were a lost opportunity to revive Japan’s mojo. The more leaders talk of accelerating the Abe-Suga “reforms,” as if they remade the place, the more Japan is in denial about what its real problems are.

Two: leadership is quality over quantity. With Suga barely lasting a year in office, pundits wonder if Japan is reverting to Italy mode, where the globe struggles to keep track of the latest, latest prime minister to come out the revolving door.

But the world is not waiting for Japan. In the nearly eight years the LDP talked about a Big Bang, China actually executed one. We can quibble about what Xi Jinping’s “common prosperity” shake-up means, but no one doubts that, for better or worse, the China of 2022 will look quite different from the one that entered 2021.

Japan’s next leader must spell out an immediate, clear and achievable economic attack plan. Suga wanted Japan to be carbon-neutral by 2050. Let us now target 2030, a goal backed up — and propelled — by public spending, regulatory changes, power-grid upgrades and tax incentives to make the next generation of innovation and prosperity Japan’s for the taking.

Why not cajoling Japan’s 100-plus regional banks to merge? Or getting hip to the digital revolution that upstarts like Vietnam and Indonesia are excelling at. Tokyo could empower the Bank of Japan to buy fewer government bonds and stocks via exchange-traded funds and instead load up on local government debt to help create innovation clusters around the nation.

The next leader should lobby U.S. President Joe Biden hard to return to the Trans-Pacific Partnership fold, and woo South Korea, India, Indonesia, the Philippines and others to join. Sadly, Japan’s leaders are too afraid of losing their jobs to actually do their jobs.

Three: give women a chance. This column often tackles the reasons why Japan must better utilize the female half of the labor force. As Goldman Sachs argues, increasing female labor participation rates to the orbit of men would add 15 percentage points to GDP.

When Christine Lagarde was French finance minister in 2010, she told me that Japan’s gender stance was effectively “tying one arm behind your back and wondering why you cannot keep up.” Here we are, 11 years later, and Japan ranks 120th on the World Economic Forum’s league tables, trailing Angola, Guinea and Sri Lanka. Ouch!

Two female LDP trailblazers who have hinted at a run are Seiko Noda and Tomomi Inada. There is also Tokyo Gov. Yuriko Koike, should opposition parties succeed in wrestling power from the LDP at the next election.

At the very least, women must get far more than the two of 20 cabinet seats they have now — and in top portfolios, too, like finance, foreign affairs, chief cabinet secretary. What about a woman to lead the Bank of Japan?

Might a female leader have handled COVID better? Who knows? But if Japan wants a prime minister who prioritizes public health over the stock market, it is time to look beyond the usual suspects. And move beyond the revolving doors of policies doing more to secure China’s future than Japan’s.


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