Japanese PM spells out grand vision but offers few specifics

Kishida vows to lead nation out of Covid-19 crisis, achieve 'new form of capitalism'

Japanese Prime Minister Fumio Kishida, laying out his grand vision for the country, borrowed buzzwords like wealth distribution, digitisation and climate change in his first policy address to Parliament yesterday .

He also vowed to lead Japan out of the Covid-19 crisis by "preparing for the worst" and putting together a stimulus package that includes grants for hard-hit businesses and higher wages for healthcare workers.

Yet his 25-minute speech contained few specifics on how he plans to achieve - or even fund - many of his long-term goals. Japan has the worst debt-to-gross domestic product ratio among advanced economies, at about twice the size of its economy.

He did not give the size of the stimulus package, though on the party election campaign trail he gave such ballpark figures as "tens of trillions of yen" and "at least 30 trillion yen (S$363.8 billion)".

Questions over the lack of details and perceptions that Japan could slide back on reforms under Mr Kishida, 64, have caused markets to fall in what investors dub the "Kishida shock". While markets tend to rally under a new leader, the Nikkei 225 index has fallen 5.1 per cent since Mr Kishida won the Liberal Democratic Party (LDP) election on Sept 29.

He was sworn in on Monday as Japan's 100th prime minister, but he already seems to be facing an uphill climb to win public confidence. Approval ratings stood at between 45 per cent and 59 per cent across four media polls this week, among the lowest for a new premier.

The LDP will face its first electoral contests under Mr Kishida in by-elections for two Upper House seats on Oct 24, before a general election for the Lower House on Oct 31.

In the Diet yesterday, Mr Kishida gave predecessor Yoshihide Suga credit for his Covid-19 strategy that has seen vaccination rates soar despite a late start, and the number of infections dramatically plunge in recent weeks.

But he did not offer any clues as to when Japan might resume its Go To Travel domestic tourism subsidy scheme, or reopen its borders for leisure travel.

He promised to achieve a "new form of Japanese capitalism" that emphasises fairer wealth distribution, noting widening disparities, given that the fruits of economic growth have not been equally passed down.

He also pledged to promote wage growth, including through "tax support" for companies that boost incomes, though it remains unclear how successful this will be, as previous premiers Mr Suga and Mr Shinzo Abe had broached this to little avail.

He also promised a 10 trillion yen research and development fund this year for new technologies, including quantum computing and climate change.

This pledge is timely after Nobel laureate Syukuro Manabe criticised Japan's myopic approach towards "curiosity-driven research". Dr Manabe, born in Japan but now an American citizen, won the Nobel Prize in Physics this week for his work in climatology.

Mr Kishida, a Hiroshima native, disavowed nuclear weapons but did not mention anything about Japan's reliance on the United States' nuclear umbrella under their security alliance, which extends to threats over the Senkaku/Diaoyu islets that are administered by Tokyo but claimed by Beijing.

Neither did he discuss the expected role of nuclear power under Japan's updated 2030 energy mix to be released ahead of next month's COP26 climate summit.

On foreign policy, he stuck to the same line of working with fellow democracies, but also stressed the need to stabilise ties with China, South Korea and Russia.

Mr Kishida was heckled by the opposition numerous times during the speech. The opposition was disgruntled by the government's refusal to convene the Diet for policy debates, noting a possible violation of the Constitution. A probe over a similar refusal under Mr Abe in 2017 is now before the Supreme Court.

Mr Kishida vowed to bridge divisions, citing Japan's "One Team" slogan at the Rugby World Cup in 2019. "As the saying goes, 'If you want to go fast, proceed alone. If you want to go far, proceed together'... In the spirit of 'One Team', we will overcome divisions and forge a new era together."

A version of this article appeared in the print edition of The Straits Times on October 09, 2021, with the headline 'Japanese PM spells out grand vision but offers few specifics'. Subscribe