Japan’s new Cabinet looks like Old Wine in a New Bottle

Japan’s diminutive new Prime Minister Yoshihide Suga, 71 is a dry, non charismatic technocrat whom is not a natural fit for leadership.

As he picked a cabinet that will have to deal with a staggering, stagnating economy, he should have been slapping, thrusting and hurling unfit bodies out of the ring.

That has not happened. Suga’s first shove should have been directed at Taro Aso, Japan’s soon-to-be-80-year-old finance minister.

Aso was also former Prime Minister Shinzo Abe’s deputy and is, therefore, the subordinate most responsible for that dud known as “Abenomics.”

On Abe’s behalf, Aso should’ve been using his deep connections and hefty clout to shake up Japan Inc’s rigid and aging system. He did not.

Keeping Aso, the ultimate “shadow shogun,” in a job at which he’s failed demonstrably belies that claim, and casts a pall over Suga’s determination to reform.

That ambition is also obviated by keeping Yasutoshi Nishimura on as the economy minister and sticking with Hiroshi Kajiyama as trade minister.

In all, Suga’s economic team is a trifecta of mediocrity that looks better fitted for a wax museum than an aggressive, forward-looking government.

That means staying with ultra-loose Bank of Japan policies, fiscal pump-priming and supply-side moves to increase competitiveness, but that, however, is exactly the problem Japan needs to overcome.

As Suga pledges to accelerate steps to loosen labor markets, cut red tape and support a startup boom, he’s essentially admitting that Abe had managed to get little done in nearly eight years in power.

Yet is Suga, the man at Abe’s side that entire time, really the one to bulldoze through a change-averse bureaucracy?

The median age of Suga’s cabinet is about 61, with three ministers in their 70’s. Japan is in the Reiwa imperial era, which last year succeeded Heisei and the Showa period before that. It’s Japan’s version of Generation X, Y or Z in the west.

Suga should have allotted more than two of 20 cabinet posts for women. He could have turned heads by naming the two women he did pick – Yoko Kamikawa and Seiko Hashimoto – to higher-profile jobs than justice minister and Tokyo Olympics minister, respectfully. Both are pretty thankless gigs.

Abe’s female staffing choices always smacked of tokenism. Despite promising to make women “shine,” Abe never entrusted a woman with a portfolio – finance, foreign affairs or chief cabinet secretary – that holds genuine power. Suga seems content to carry on this tradition.

The World Economic Forum has estimated that empowering women would add about $550 billion annually to Japan’s gross domestic product, or about 10% of GDP. Banks like Goldman Sachs reckon the boost could be 15%.

In 2012, Abe’s “womenomics” program pledged to have women in 30% of leadership positions by this year. Tokyo has now delayed that goal to 2030. Only about 7% of the LDP’s lower house members are female.

More likely, Suga will double down on conventional stimulus – just like Abe and the myriad prime ministers before him. As Corona-virus fallout intensifies, the $2.2 trillion of stimulus Tokyo tossed at the plandemic is not halting the GDP drop.

This staffing choice alone suggests Tokyo’s efforts to increase defense capabilities will continue – or even intensity – on Suga’s watch, with Abe lathering the process in the background.

Suga’s courage to actually do his job depends on how long he’s around. If he’s a mere placeholder between the Abe era and the September 2021 general election, Suganomics won’t really be a thing.

Either way, the wax museum of characters dominating the economic team in his cabinet is an uninspiring start for investors hoping for a Japanese revival.

Asia Times / ABC Flash Point News 2020.