One impact of the coronavirus crisis is that it has exposed the deep economic disparities in Japanese society. And with the race now on to replace Prime Minister Yoshihide Suga as head of the ruling Liberal Democratic Party (LDP), the four candidates should be debating policies on how to correct those distortions and ease people's anxieties.
After Suga announced that he would not seek reelection as LDP president, the stock market average jumped over the 30,000-yen mark, hitting highs not seen since the economic bubble period ending in the early 1990s. It indicated that many market players were expecting a new administration would launch some major economic policies.
However, only a portion of high-income earners benefit from the blessings of the stock market. Meanwhile, Tokyo and other parts of the country continue under an extended coronavirus states of emergency, and the economy overall is suffering. There are many low-wage, non-permanent workers employed by restaurants, bars and other businesses subject to shortened business hours. People in weak positions in our society are in yet greater danger of slipping into poverty.
The nearly nine years of "Abenomics" -- the economic policy mix pursued by former Prime Minister Shinzo Abe -- fed Japan's widening wealth gap. Abenomics championed economic growth and efficiency above all things, and was deeply influenced by neoliberal economic ideology. Suga and his emphasis on "self-help" continued the Abenomics policy.
Monetary easing and fiscal stimulus have pushed down the value of the yen and fueled stock market gains, but virtually the only ones to reap the rewards were major corporations and the already rich. Meanwhile, non-permanent employees came to make up nearly 40% of Japan's workforce. Family budgets were squeezed, and consumer spending stagnated. In the end, economic growth continued to wallow in the doldrums, while the country's debt load swelled to stratospheric levels.
These issues must be brought to the fore and reviewed in the LDP leadership election campaign, set to culminate in a vote on Sept. 29. However, in-depth debate does not appear to be forthcoming.
Candidate Sanae Takaichi, a former minister of internal affairs and communications, is pushing a beefed-up version of Abenomics. Taro Kono, the current administrative reform minister and head of Japan's vaccine rollout, has acknowledged that Abenomics has not led to higher wages, but indicated he considers continuing regulatory reform of enormous importance to stimulating economic growth.
Former LDP Policy Research Council chief Fumio Kishida has called for "turning away from neoliberalism," but at the same time lauded Abenomics for "strengthening Japan's economic makeup." Seiko Noda, acting LDP secretary-general, is talking about a rethink on favorable treatment for big corporations, but has not put forward any concrete policy proposals of her own.
We are also struck by a push for large stimulus packages coming out of the leadership campaign. While Japan must not be stingy about pandemic-related spending, an easy reliance on government bonds to cover costs is problematic on multiple levels.
If the objective of this race begins and ends with putting on a lavish banquet, so to speak, with an eye on the upcoming general election, then the structures that produced Japan's current crisis of inequality will remain in place, risking leaving an even bigger bill for the future.
If the livelihoods of people on the lower end of the income spectrum are improved, this will broaden the base of consumer spending, and become the foundation of Japan's economic regeneration. It is the ruling party's responsibility to present a vision for how the people can live their lives with peace of mind.