A man walks past an electronic stock board at a securities firm in Tokyo on April 13, 2020. This has been a time of economic decline for Japan. Photo: AP
by Anthony Rowley
by Anthony Rowley

Ailing Japan needs new ideas from leadership contest to revive its regional role

  • The contest to replace Yoshihide Suga should be wide open, but Japan’s mindset remains closed on key issues, such as the relationship with China and South Korea
  • Economic opportunities in the shape of trade and investment abound if only the restraints of Japan’s relationship with the United States can be loosened

As a former senior Japanese official once told me, Japan is a country of “excellent foot soldiers but poor commanders”. Now, as a new batch of would-be commanders jostles to become prime minister, the danger is that whoever wins will again disappoint hopes of more visionary leadership.

Public enemy No 1 for any new leader is the Covid-19 pandemic, an adversary outgoing Prime Minister Yoshihide Suga has had limited success in fighting. Repairing Japan’s pandemic-ravaged economy will be another priority, but what of Japan’s economic and political role in Asia and the wider world?
This is unlikely to be elevated to top priority, whether the winner of the race for presidency of Japan’s Liberal Democratic Party (LDP) – and thus the role of prime minister – turns out to be the favourite, Taro Kono, or other top candidates such as Fumio Kishida or Shigeru Ishiba.

There has been an increasingly forceful push to elevate national security concerns among Japanese foreign policy issues. But national security concerns are inward-looking and defensive rather than boldly outgoing.

For much of the post-World-War-II era, Japan has been a country “in” rather than “of” Asia. It was tied to the United States, for which it hosts US Asia-Pacific military forces as an “unsinkable aircraft carrier”, to quote former prime minister Yasuhiro Nakasone.


Japanese Prime Minister Yoshihide Suga to step down

Japanese Prime Minister Yoshihide Suga to step down
Japan served also as a kind of US-designated leader in Southeast Asia while South Korea was likewise bound to the US and China was almost off the map as an economic power. China’s rise has changed this balance, but Japan’s economic and foreign policies have not adjusted to the new reality.
Japan’s economic and political destiny under former prime minister Shinzo Abe and Suga became bound up more with countries such as Australia and India as well as the US than with that of China and South Korea, at least at the official level.

This odd geographic configuration prevents any chance of the emergence of the united East Asia that some have dreamed of. It is symbolised as much by the Quad security grouping of the US, Japan, Australia and India as by the rivalry with China in areas such as infrastructure.

What chance is there of more rational geoeconomic configurations emerging as a result of upcoming elections in Japan that are being billed as potentially game changing? The election of a new LDP president will be on September 29, followed by a House of Representatives election before the end of November.


Biden and Suga vow to take on ‘challenges from China’, counter Beijing’s ‘intimidation’

Biden and Suga vow to take on ‘challenges from China’, counter Beijing’s ‘intimidation’

The main candidates are jostling furiously for position. As political analyst Michael MacArthur Bosack noted, “the situation unfolding is dynamic, complex and unprecedented”.

One reason for this is that rank-and-file members of the LDP, which rules Japan in coalition with Komeito, will join party lawmakers in choosing the new leader. That should mean the contest is wide open but, in reality, Japan’s mindset remains closed on some key issues.

One is the relationship with China and South Korea. This was driven in recent years not by factors that economic logic would dictate but by narrow nationalism that characterised the near decade-long rule of Abe, whose influence behind the scenes remains strong.
This has been a time of economic decline for Japan. China has displaced it as the world’s second-largest economy behind the US, and it has shot ahead in everything from infrastructure to IT while South Korea has also advanced by leaps and bounds.

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This speaks of a kind of psychological protectionism developing in Japan. Political leaders have fostered a reverence for past greatness and a culture of dependence in security and economic areas on Pacific partners rather than near neighbours.

It cannot be denied that China’s abrasive behaviour in some areas has exacerbated these tendencies, but Japan has failed to go out and embrace East Asian challenges.

It is hard to envisage any of the candidates in the struggle to become LDP president and prime minister breaking this mould. Kono and Kishida are former foreign ministers, but both have been shaped by domestic politics while Ishiba is a former defence minister.

Something new is needed to set Japan on a course of independent regional cooperation, especially with its near neighbours. Economic opportunities in the shape of trade and investment abound if only the restraints of transpacific relationships can be loosened.

Some do have political courage and vision. Yoshimasa Hayashi, who resigned from the House of Councillors to run in the House of Representatives election and possibly the LDP presidential race, sees a need for Japan to nurture public sector economic initiatives and that could stir changes in political ideology.

The alternative seems to be for Japan to continue its genteel economic decline while the conservative political establishment slowly withers and dies. There is little of promise on the parliamentary opposition horizon meanwhile, and the game-changer elections might not signal game-over reforms.

Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs