Commentary: No, seriously, this is one Japan scandal that’s important

TOKYO: Almost a half century ago, Japan’s biggest political scandal saw the prime minister convicted of taking bribes and a porn actor attempt to murder a fixer in a kamikaze plane attack on his home. 

The funding affair that’s currently gripping the long-ruling Liberal Democratic Party (LDP) might lack the level of drama of what is known as the Lockheed case. But don’t dismiss this new one as another low-stakes Tokyo transgression.

This incident, which involves hidden slush funds and has ensnared multiple lawmakers spoken about as potential future prime ministers, could upend the entire political system in what might be right now the United States’ most important ally.

The world’s press, which often focuses on quirky or salacious “Weird Japan” tales, isn’t yet too interested - at the time of writing, the scandal had yet to feature in the pages of the New York Times. Yet Tobias Harris, the Japan political expert and Shinzo Abe biographer, wrote recently that this is a “once-in-a-generation political crisis” with likely far-reaching ramifications.

Admittedly, in this case, it’s more bad bookkeeping than the Lockheed scandal’s Catholic priest who secretly funnelled cash into Japan for bribes. But allegations that leading lawmakers failed to correctly report millions in fundraising income have already seen prosecutors raid the offices of two leading LDP factions. Criminal complaints and arrests seem likely to follow. 

WILL THIS BE THE END OF FUMIO KISHIDA?

That the affair will, sooner or later, be the end of Prime Minister Fumio Kishida seems increasingly probable. His unpopularity is staggering.

A Mainichi poll this week gave his Cabinet a nearly 80 per cent disapproval rate, the worst result since the newspaper began surveying in 1947. Given the many inept leaders who have presided since then, that’s saying something. 

Kishida has, to date, little direct involvement in the alleged wrongdoing. Though there are reports his party faction may be involved, it wasn’t one of the two whose offices were raided. Yet the public is blaming him anyway. A hastily organised Cabinet reshuffle that ditched Abe faction members has done little to shore up support.  

With no clear rival, and potential challengers likely reluctant to take their shot with support so low, Kishida may yet hang on in the near term. National elections aren’t due until 2025, so lawmakers don't seem to be in imminent danger of losing their seats. In the interim, however, Kishida’s floundering popularity opens the door to more ill-advised vote-grabbing moves such as his recent one-time tax cut.  

Removing the Abe faction (the party’s largest) from the top jobs also introduces risks. One is that, like when the United Kingdom’s Conservative Party removed Remainers after Brexit, those left behind to fill the most senior jobs may not be the most astute operators.

Another is that the faction, with little to lose, could lash out and destabilise Kishida, or whoever holds power. Effective leaders need to be able to control a vast swath of the broad church that is the LDP. Making good policy just got more difficult.

The sidelining of the Abe faction, which may have hoped to produce the next leader, also makes party electoral math difficult in the event Kishida does go, either imminently or when leadership elections are held in September.

Some speculate now might be the time for a left-field leader to emerge, like the maverick Junichiro Koizumi did in 2001. That would encourage reformers like Taro Kono, or even Koizumi’s son Shinjiro, who has the backing of former leader Yoshihide Suga. 

Koizumi’s time in power is remembered fondly for its bold reforms and as one of the country’s longest postwar booms. Alternatively, Japan could slip back to the revolving-door days of the post-Koizumi years, which would be disastrous.

Stability is good for Japan’s presence on the global stage and for personal relationships vital to forging closer ties. The US in particular found it difficult to deal with Japan during the constant turmoil of the late 2000s, undoubtedly to Tokyo’s detriment. 

POTENTIAL FOR WIDER IMPLICATIONS

It’s likely that if the prime minister does depart, key programmes such as defence and semiconductor spending will be taken up by a successor. But don’t underestimate Kishida’s ability to get things done: Abe, too, dreamed of doubling the defense budget but couldn’t get it passed.

Kishida has made it a key policy, even if he hasn’t figured out how to pay for it. Conversely, party unity forced Kishida to retreat from more left-leaning economic policies touted before he took office. A prolonged decline of the Abe faction might endanger that. 

The scandal could even affect monetary policy. Bank of Japan Governor Kazuo Ueda wouldn’t discuss the impact when asked Tuesday (Dec 19). But analysts are already speculating that a sidelining of the Abe faction, which supports easy money, would make it easier for the BOJ to end negative rates. Alternately, Kishida (or a successor) might wish to avoid any more turmoil; that might have been the message his economy minister was sent to deliver when Yoshitaka Shindo, unusually, attended Tuesday’s central bank meeting. 

Further out, the ruling coalition makeup and even the party itself could be under threat. Calls to eliminate factions entirely will likely grow. The LDP’s long-standing partnership with junior coalition partner Komeito has been in rough waters for some time, and this could end it; as Harris writes, the "predictable stability that characterised Japanese politics since 2012 is in all likelihood over".

Japan has largely avoided the trend of populism that has consumed many countries over the past decade. But if it starts to lose seats, the LDP might be forced to make friends with some less mainstream parties - opening the door for more fringe figures.

There’s also a danger that, as has happened elsewhere, this affair could exacerbate public disillusionment with the system itself and spill over into something much less palatable - a concern made worse by the lack of a convincing mainstream opposition that could step in to take over from the LDP. 

One way or another, we’re witnessing a moment with the potential to redefine Japanese politics in profound and unexpected ways. This time it’s worth paying attention.