Leadership Transition in Japan and its Implications

Japan swore in a new Prime Minister, Mr. Yoshihide Suga, on September 16, 2020. The leadership change came about due to the unexpected decision of Prime Minister Shinzo Abe to step down a year before time citing ill health, ending a consecutive 8-year term in office - the longest ever such in Japanese history. The news of Abe’s impending resignation, the ensuing election for the leadership of the Liberal Democratic Party (LDP) and the choice of Suga, his Chief Cabinet Secretary since his re-election in 2012, as his successor, has received unprecedented global attention. This has been due to the remarkable legacy of PM Abe on both the domestic front and in the realm of foreign and security policy. In an Asia transforming into the nub of the global economy, and at the same time roiled by the challenges posed by an ascendant and militarily assertive China, PM Abe exhibited foresight, courage and tenacity to initiate regional and global strategic as well as economic realignments which will survive him. PM Suga, as his closest confidante and the one who was tasked to explain his vision as his spokesman, appeared to be the best choice for continuity in Japan’s policies.

PM Abe’s principal contributions domestically were to provide political stability after a revolving door phase of five years with five Prime Minister, leading the LDP to six election wins which secured them majorities in both houses of the parliament, and keeping the Japanese economy afloat with the partially successful three arrows of Abenomics – fiscal stimulus, monetary easing and structural reforms. On the foreign and security policy front he worked hard to strengthen the US-Japan alliance despite a truculent Trump, paradoxically thawed frosty relations with China despite the continuing standoff on the Senkaku islands and saw his vision of a “Free and Open Indo Pacific” achieve wide acceptability, along with the institutionalization of the QUAD, bringing together four democracies of the Indo-Pacific.

Given this weighty legacy, as well as tasks unfinished, it must have been important for Mr. Abe to identify a successor who would provide both stability and continuity, be ideologically aligned, and also permit his steadying hand on the tiller as an influential member of the Diet and party. Another key element of the succession dynamics for Mr. Abe was to ensure that his principal opponent within the LDP, former Defense Minister Shigeru Ishiba who has a following amongst the party’s rank and file, did not take his place. The outcome was engineered by getting his Chief Cabinet Secretary, Yoshihide Suga, to declare his candidature, then gather five of the seven LDP factions behind him, and using the provision of an emergency election where voting is limited to lawmakers and a limited number of prefectural representatives, to ensure his victory.

As expected, Mr. Suga won the election to the leadership of the LDP with ease, and following convention, was sworn in as PM on September 16, 2020. He has cited his priorities as reviving the economy already in recession, which has seen a post-Covid GDP contraction of 27.8 % (on an annualized basis) in April-June 2020, while simultaneously taking measure to contain the spread of the pandemic. He has also said that he would continue with Abenomics but push for enhanced regulatory and administrative reforms along with greater digitization of the public sector. He has signalled continuity in the composition of his cabinet by retaining key economic Ministers of the Abe cabinet. He has also moved former Defense Minister Taro Kono, as Minister in charge of administrative and regulatory reform, given his experience in the field and reputation for decisiveness. Another key appointment has been of his erstwhile deputy in the early Abe years, Katsumoto Kato, as Chief Cabinet Secretary.

PM Suga has been forthright in saying that he will follow his predecessor’s line in foreign and security policy. His retention of Foreign Minister Toshimitsu Motegi, who has experience both of trade issues as former METI Minister, and foreign relations, and of National Security Adviser Shigeru Kitamura underscore this. Accordingly, his first telephone conversations were with Australian PM Scott Morrison and President Donald Trump, respectively. He is said to have told President Trump that the US-Japan alliance is the “cornerstone of peace and stability in the region and both reaffirmed their sharedvision of a ‘free and open Indo Pacific’. Despite anticipated pressure by President Trump for further concessions on the trade front and to renegotiate the host country agreement for the stationing of US troops in Japan, the US-Japan relationship will continue to define Japan’s foreign policy. The choice of his first call to PM Scott Morrison was followed by the announcement of a likely visit of the Australian PM. This gives an indication of the continuing importance that Suga will place on the Australia-Japan-US-India grouping of the QUAD which is to meet at the foreign minister’s level for the second time in Tokyo in October 2020.

It is also clear that PM Suga will continue PM Abe’s policies on bolstering Japan’s military capabilities.Reports indicate that the Japanese Defence Ministry under the new Defence Minister Nobuo Kishi, PM Abe’s brother, has sought a record defence budget of Yen 5.4 trillion for 2021, despite fiscal stress. This is required to carry forward the projects initiated by PM Abe, including an alternate to the Aegis Ashore missile defense system which had to be abandoned in June 2020 on technical and cost considerations.

PM Suga’s handling of ties with China will also come under close scrutiny as he tries to balance national security and economic interests in a situation further complicated by the dispute between the US and China. PM Abe was credited with having worked with persistence to re-establish equipoise in the bilateral relationship which had reached a nadir due to the dispute on the Senkakus and his visit to the Yasukuni shrine as PM in 2013. His efforts resulted in the resumption of high-level bilateral visits, including his own in October 2018, during which both sides signed 52 Agreements to work together on projects in third countries, signalling acceptance of the BRI by Japan. (None have taken off so far, though). President Xi Jinping was to have made his first bilateral visit to Tokyo in April 2020 which was cancelled due to the pandemic.

However, China’s aggressive air and maritime incursions around the Senkakus continued unabated in tandem with this warming of political contacts. The spike in violations of Japan’s air and territorial waters in 2022 has resulted in legislators demanding a cancellation of President Xi’s postponed visit, and more recently, for joint US-Japan patrols around the Senkakus. PM Suga has indicated that he will continue the dual approach of dialogue and cooperation while taking a tough position on threats to territorial integrity. He is also said to have been strongly in favour of PM Abe’s strategy of economic decoupling from China post Covid-19 by diversifying supply chains and can be expected to continue to reduce economic reliance on China. The tensions in the East China Sea are said to have been mentioned during PM Suga’s telephone conversation with President Xi on September 25 where the leaders spoke of developing bilateral relations and cooperating in tackling the pandemic but did not set new dates for the postponed state visit.

The India-Japan close and wide-ranging partnership appears to be on course despite cogitation that PM Abe’s exit might affect the intensity given his personal contribution and commitment to it. The warm farewell ‘summit telephone conversation’ between PMs Abe and Modi was followed by PM Suga’s call to PM Modi on September 25, during which he was extended an invitation to visit India for the postponed annual summit once the pandemic abates.

All indications, thus, are that PM Suga has settled in quickly into his new position, taking measures and making statements to reveal his own imprimatur on the domestic and foreign policy of Japan which points to continuity with limited tweaks. While this shows that he is preparing for the long haul even beyond elections due in a year, there continues to be a national debate on the pros and cons and likelihood of a snap election. PM Suga himself has not spoken in favour off this and there is opposition for this scenario from alliance partner, Komeito, and sitting lawmakers who will need to face the hustings early.

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