Japan PM Ishiba faces first major policy test with stimulus plan
JAPANESE Prime Minister Shigeru Ishiba is set to lay out his latest policy vision on Friday (Nov 29) in a speech to an extraordinary session of parliament as he pursues approval of a 13.9 trillion yen (S$124 billion) extra budget to fund a stimulus package.
After early policy flip-flops and an uneven performance at international summit meetings in South America, Ishiba is now looking to deliver on pledges to boost the economy and help households struggling with rising costs of living, while also preparing for the incoming administration of US president-elect Donald Trump.
Ishiba’s government remains vulnerable after it lost its majority in an election last month, but a deal with the opposition Democratic Party for the People over tax policy gives it some stability as lawmakers prepare to debate the plans in a parliament session that’s set to run to Dec 21. The Cabinet is expected to approve the extra budget on Friday.
While Ishiba’s public approval ratings remain weak, political analysts say he’s unlikely to face moves from within the ruling Liberal Democratic Party (LDP) to replace him before the spring, when legislation for the budget for the fiscal year starting in April is expected to be approved. A challenge is seen more likely in the run-up to an upper house election in the summer.
“The job of prime minister in a minority administration is a difficult and thankless one, and no one else in the LDP is likely to want it at this stage,” James Brady, a Japan analyst at Teneo, an advisory firm, wrote in a note to clients.
In his speech, Ishiba is likely to highlight his priority of trying to foster economic growth in Japan’s rural areas, which have been hit hard by depopulation and economic stagnation. He may also touch on plans for handouts for those struggling with high prices of fuel and food, and bolstering Japan’s ability to cope with frequent natural disasters.
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The new extra budget will feature 5.8 trillion yen in spending for growing Japan’s economy including its regions, 3.4 trillion yen in response to inflation, and 4.8 trillion yen for security and social policies, according to sources familiar with the matter.
On foreign policy, Ishiba is likely to highlight the importance of Japan’s alliance with the US ahead of the transition to a new administration in Washington, while also noting recent moves to dial back tensions with China through dialogue.
Ishiba held talks with Chinese President Xi Jinping on the sidelines of the recent Asia-Pacific Economic Cooperation Summit in Peru. The Japanese prime minister had also hoped to meet Trump on his way back from South America, but was told the president-elect was not planning to meet world leaders before his inauguration.
Ishiba faced some public criticism in Japan for not standing up to greet other leaders at Apec and for missing a group photo because he was caught in a traffic jam. BLOOMBERG
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