A Month of Premier Takaichi

One month has passed since Sanae Takaichi Cabinet was established on October 21st. As she keeps relatively high approval rate among past premiers, her way of handling politics begins to show three characteristics: systematic in discussion, diplomatically naïve and fiscally immodest. Her hawkish stance in policies can invite political inconsistence with former administrations’ handling of the country.

 

Takaichi administration is a coalition government between the Liberal Democratic Party (LDP) and Japan Innovation Party (JIP). JIP insisted on reduction of Diet seats as an “absolute condition” for their coalition, setting a goal of submitting a bill on the seat reduction to current session of the Diet.

 

What Takaichi did for implementing the bipartisan agreement was establishing a discussion body. The LDP and JIP set a table to discuss Diet seat reduction. As the discussion continues in the commission, Takaichi argued that the issue neededto be discussed in a broader framework including opposition parties. If JIP has its opinion to Takaichi, it should be discussed in the discussion body, not be directly cast to Takaichi.

 

To absorb requests from JIP, Takaichi set up five councils in the coalition framework. They are on Diet seat reduction, regulation of donation from companies and organizations, constitutional amendment, governmental system reform and social security reform. As long as discussions continue in these bodies, JIP cannot leave the coalition with hope of implementation of their agenda. It is, in other words, a mechanism of face-saving for JIP.

 

Takaichi has no experience of Minister for Foreign Affairs or Defense. It might have affected her careless remark in the Diet on relations with China. She said that maritime blockade around Taiwan might consist of “survival-threatening situation,” in which Japan would use its force, provoking China’s sharp response against Takaichi, including resumption of trade ban on Japanese sea products.

 

Former prime ministers did not explicitly talk about possible “Taiwan contingency.” Takaichi is likely to have succeeded a concept of Shinzo Abe that Taiwan contingency is Japanese contingency. However, she could not imagine the consequence of her speech on Taiwan. Takaichi told her staff that her comment was excessive. It is not hopeful, however, that Takaichi can restabilize relations with China for the time being.

 

Takaichi’s economic policy is represented by her slogan, “responsible and active fiscal policy.” To deal with price inflation and keep her popularity, she is delivering extra-large size of supplemental budget this fall. To implement her economic stimulus policy, she instructed ministries to request their own projects regardless of fiscal resource. While LDP Research Commission on the Tax System has traditionally been working as a deterrence against fiscal extravagance with its independent authority, Takaichi replaced the top of the commission to her ally.

 

Takaichi’s active stance for fiscal spendings invited certain skepticism in the markets. With fundamental concern on deterioration of financial balance of Japanese government, stock, bonds and Japanese yen marked a triple low on November 18th. Nevertheless, Takaichi insists that she is responsible for both fiscal and monetary policy, in the meeting with Governor of Bank of Japan

 

When she makes her own decision, she tends to consult with no one. That style may invite unpredictable result in diplomacy or economic policy. 

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