New Prime Minister Fumio Kishida Promises a ‘New Capitalism’ for Japan. Will It Succeed?

Japanese businessmen walk past a screen displaying Nikkei
James Matsumoto/SOPA Images/LightRocket via Getty Images Japanese businessmen walk past a screen displaying the Nikkei share average and world stock indexes outside a Tokyo brokerage on Sept. 6, 2021

Kishida’s plan for Japan’s economy

Consisting of monetary easing, fiscal stimulus, and structural tinkering, Abenomics achieved marginal gains by getting a handle on deflation and bringing more women into the workforce (albeit chiefly in non-regular jobs that were first to go when the pandemic struck). But the ultimate goal, of generating sufficient growth to spark deeper structural change and innovation, did not happen. Today, wages in Japan remain stagnant and household income is slightly down.

It is, of course, a problem that predates Abe. In 2001, the Koizumi administration unleashed bold, cost-cutting economic, administrative and structural enhancements in order to end the “

In his first big policy speech on becoming Japan’s 100th prime minister, Fumio Kishida doubled down on campaign promises to redistribute wealth and shrink inequality. “If you want to go fast, go alone; if you want to go far, go together,” Kishida told lawmakers on Oct. 8, quoting a proverb of hotly contested provenance.

But the “new form of Japanese capitalism” advocated by the softly spoken Kishida—a former foreign minister with a reputation as a consensus builder—spooked Tokyo investors wary of higher taxes and prompted markets to plunge. In response, the 64-year-old chosen to lead the ruling Liberal Democratic Party (LDP), following last month’s resignation of Yoshihide Suga, insisted that he wasn’t planning on raising capital gains tax anytime soon.
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Ultimately, it matters little. Disarray in opposition ranks means the LDP is expected to stroll to victory in snap elections Kishida called for Oct. 31. But what his “new” capitalism actually entails is still a matter of debate. Analysts agree that, at the least, it’s a repudiation of the “Abenomics” of Japan’s longest-serving prime minister, Shinzo Abe, as well as of the reformist agenda of Taro Kono, whom Kishida defeated in the party leadership race.

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“Kishida is trying to reposition the LDP as the party of growth and redistribution,” says Jeffery Kingston, director of Asian Studies at Temple University in Japan. “Abenomics is generally regarded as welfare for the wealthy.”

James Matsumoto/SOPA Images/LightRocket via Getty Images Japanese businessmen walk past a screen displaying the Nikkei share average and world stock indexes outside a Tokyo brokerage on Sept. 6, 2021Kishida’s plan for Japan’s economy

Consisting of monetary easing, fiscal stimulus, and structural tinkering, Abenomics achieved marginal gains by getting a handle on deflation and bringing more women into the workforce (albeit chiefly in non-regular jobs that were first to go when the pandemic struck). But the ultimate goal, of generating sufficient growth to spark deeper structural change and innovation, did not happen. Today, wages in Japan remain stagnant and household income is slightly down.

It is, of course, a problem that predates Abe. In 2001, the Koizumi administration unleashed bold, cost-cutting economic, administrative and structural enhancements in order to end the “lost decade” of Japan’s middle-income trap. The gains from those measures were uneven.

“That left a lot of the population impoverished and frustrated that their life was not getting better, and a lot of criticism that deregulation and reform really hadn’t benefited them,” says Saori N. Katada, an associate professor at of international relations at the University of Southern California.

But despite widespread criticism of Abenomics from across Japan’s political spectrum, few politicians have proffered any meaningful alternatives. “Many Japanese politicians espouse economic policies that are essentially a continuation or marginal modification of Abenomics,” says Kristi Govella, deputy director of the Asia Program at the German Marshall Fund of the United States.

Read More: How the Pandemic Forced Japan to Rethink Its Work Culture

Kishida, however, is …read more

Source:: Time – World

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