Wed. Oct 20th, 2021


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Over the past few days, several Tokyo friends have described a sudden craving for – or acted on – okonomiyaki. They especially like the Hiroshima-style version of the savory pancake, with a base of noodles, a humble egg crown and a big fame on social media after Yuko Kishida made one for dinner one Wednesday.

She did so in the hours that followed when her husband, Fumio, won the ruling Liberal Democratic Party’s leadership race. That means he will succeed Yoshihide Suga as Prime Minister of Japan: a country where ordinary people enjoy one of the highest life expectations in the world, but the prime ministers last about two years after the war – about the same lifespan as a western mosquito fish. A few considerations of a new prime minister, says the chairman of one of the largest enterprises in Japan, are more important than the chance to achieve this opportunity.

For all the hope of a true scrap for the top position or even a generation of power shift, the victory of Kishida was a spectacle recorded by traditional LDP machine politics and printed on the screens. This is a show that has been running at a more or less constant pace since 1955. The photo of the lovingly prepared okonomiyaki was in this cynical context the subliminal cut edited in the reel to make Japan involuntarily swing over the relativity of its latest helmsman. The strange glow can still be hot, the LDP calculates, when the country votes in the lower house in parliamentary elections this year.

As usual with changes at the top of one of the world’s largest economies and financial markets, there’s a big scramble to determine what this will mean for the business, what popular policies Kishida is likely to pursue (while he can), what macro narratives he can evoke and what he will do for outside perceptions of a stock market that depends on the sentiment of foreigners. These questions will increase this week once the new cabinet is appointed. According to analysts, the initial focus of markets will be how a leader surrounded by choice with financial bureaucrats will formulate a promised stimulus package worth ten billion yen and handle a reopening to the Covid.

But, say a number of senior executives, that businesses are already in internal discussions about what a Kishida administration could still try. The incoming prime minister looks serious about the pressure or incentive of corporate Japan to raise wages, which could put him on a collision course with the Keidanren Chamber of Commerce. His non-okonomiyaki posting on social media was about introducing quarterly reporting rules that could make it optional, not mandatory. He also proposed additional changes to the Code of Corporate Governance that would encourage businesses to focus on broad stakeholders, rather than on narrow ones.

Businesses can welcome the changes; investors would see it as an attempt to reverse the momentum of reform of the past six years. Kishida also spoke of a new style of capitalism and a rejection of the neoliberal policies that Japan adopted in the mid-2000s. One prominent CEO informed me that Kishida’s thoughts on the redistribution of wealth ‘give me chills’.

But business leaders are asking themselves how much of this is relevant if Kishida has no clear weapons to defeat the statistics? And are there any good signs at this point of the potential longevity of a leader if a medium-term corporate strategy, by averages, can expect at least two changes from prime minister before it is completed?

Part of the problem lies with Shinzo Abe, the kingmaker behind the victory of Kishida, who was Japan’s longest-serving prime minister when he retired in 2020 with a record of 3,186 days. Aside from the fact that the average rate was higher, Abe’s long life managed to convince the corporate, bureaucratic, political and diplomatic areas that after many years there was something like a Japanese prime minister who could survive a mosquito bird. Says the residents of the four spheres, a transforming posture that requires new assumptions about how far a given prime minister’s plans and promises should be expected.

Suga’s single year in power, given the peculiarities of the pandemic, can be considered a deviation. The mechanism by which Kishida was installed strongly suggests that the old LDP ways are back, and with it the tendency for short-lived leaders. Kishida is thus the real test of whether Abe puts the average life expectancy on an ascending trajectory. If not, we just have to wait until 2023 to find out what the next prime minister’s favorite Instagram-ready, man-of-the-people food is.

leo.lewis@ft.com





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