Japan's Thatcher: Sanae Takaichi's win may reshape Indo-Pacific geopolitics

Sanae Takaichi’s landslide victory in the snap polls over the weekend is likely to profoundly alter the dynamics of Japanese politics and Indo-Pacific geopolitics. A major reason for this lies in Ms Takaichi’s background. She is not only the first woman Prime Minister in a traditionally patriarchal society with deeply embedded gender roles, she has risen through the ranks without the advantages of entrenched dynastic politics, which has marked post-war Japanese politics. A protégé of former Prime Minister Shinzo Abe, Ms Takaichi hails from a modest background, the daughter of a policewoman and a machinery maker. A conservative and ultra-nationalist, she sees herself as Japan’s Margaret Thatcher, Britain’s first woman Prime Minister, who came from a similar background and whose reforming zeal also altered Britain in lasting, if not always desirable, ways. 

 

Having gambled on elections to test her popularity — she was appointed, not elected, to the post in October last year — Ms Takaichi is now armed with a decisive majority in Parliament to carry out her agenda. Her Liberal Democratic Party (LDP) won 316 seats in the 465-seat lower house, improving on the LDP’s previous 198-seat tally. Together with the coalition partner, the Japan Innovation Party, the bloc commands 352 seats, a super-majority that enables her government to override challenges from the Upper House, where the LDP lacks a majority. Parliamentary Opposition may have been muted but Ms Takaichi’s agenda could be tested in the real world. The yen has weakened since her appointment in October, raising the costs of energy and food imports. Key to her electoral victory is a two-year suspension of the 8 per cent consumption tax on food to combat rising living costs and boost household purchasing power. Given Japan’s high debt, the annual foregone revenue of about 5 trillion yen as a result of this tax break has roiled the bond markets with yields rising sharply after her election victory. It is also unclear whether the tax cut will be sufficient to address Japan’s long-standing socioeconomic infirmities — a rapidly ageing population and concomitant strict immigration policies, which have resulted in acute labour shortages in a host of sectors. Ms Takaichi has indicated that she is unlikely to liberalise immigration policies, suggesting that Japan rely more heavily on technology, automation, and a greater participation of women in the economy.

 

On the external front, Ms Takaichi has eschewed Japan’s traditional equidistance between the United States (US) and China. She has actively courted US President Donald Trump and chosen to weaken the country’s pacifist Constitution by raising the defence Budget with the stated intention of thwarting Chinese threats to its islands, including those close to Taiwan. Predictably, Beijing has condemned Japan’s return to militarism and promised a “resolute” response if Tokyo persists with rearmament. A dispute with Beijing over rare-earth exports has added to the climate of hostility across the East China Sea and exposed the vulnerabilities of Japanese manufacture of electric vehicles and defence equipment. While the tilt towards the US may reflect the ideals of Shinzo Abe, the wisdom of provoking a nuclear-armed near neighbour with which Japan has deeply embedded economic ties in favour of an ally of doubtful allegiance across the Pacific could become as much of a defining element of Ms Takaichi’s tenure as her spend-and-stimulate economic policy.