LDP Presidential Election: Candidates Should Present Visions for Driving Economic Growth

Editorial

16:32 JST, September 23, 2024

How can the Japanese economy be put on a path of full-fledged growth in order to raise the nation’s international presence once again? The candidates in the Liberal Democratic Party’s presidential election should present comprehensive visions.

The Japanese economy, which has been stagnant for a long time, has reached a critical point where it needs to shift to a growth-oriented economy in which both wages and investments increase. Economic measures are an important point of contention in this election.

Former Environment Minister Shinjiro Koizumi has said he will aim to revitalize the economy by reviewing regulations on the dismissal of workers and shifting more people into growth sectors.

Economic security minister Sanae Takaichi has vowed to strategically increase government spending mainly in areas of growth.

Meanwhile, former LDP Secretary General Shigeru Ishiba calls regional revitalization a “catalyst for the Japanese economy” and intends to support companies in taking steps such as expanding into regional areas. Ishiba has also expressed his intention to raise the rates of taxation on financial income such as capital gains from the sale of stocks, as he believes it is necessary to rectify the preferential treatment of the wealthy.

Many of the candidates are placing a focus on ways to raise wages and income through measures such as improving the tax system and providing benefits.

However, such measures have been discussed in the same manner as in the past and will not be sufficient to accelerate growth.

Through the promotion of the Abenomics economic policy, former Prime Minister Shinzo Abe achieved a long-term economic recovery and an increase in employment, but his growth strategy was not powerful enough.

Prime Minister Fumio Kishida touted a “new form of capitalism” that would strike a balance between economic growth and the correction of wealth disparities, but it lacked concrete measures and ended up being no more than a slogan.

In this LDP leadership race, the candidates need to present comprehensive economic visions for leading the Japanese economy to the next stage.

Rebuilding the nation’s finances is also a challenge. It is said that the public’s concerns about worsening public finances in the future have driven them to reduce spending, hindering economic growth.

Almost all of the candidates have stated their intention to implement economic measures by the end of the year, with Chief Cabinet Secretary Yoshimasa Hayashi saying that he wants to extend measures for curbing electricity, gas and gasoline prices, for example.

Although support for low-income earners struggling with higher prices is essential, the easy implementation of pork-barrel measures should be avoided.

Energy measures are also a major policy issue. It is essential to secure affordable and stable energy sources for the nation’s economic growth to continue while decarbonization efforts are being made.

Digital minister Taro Kono has moved away from a stance of seeking zero nuclear power in anticipation of an increased demand for electricity. Most of the candidates are favorable about the use of nuclear power.

Ishiba, meanwhile, has said that he believes the percentage of nuclear power in the nation’s energy mix will decrease as a result of the promotion of renewable energy sources.

However, under such a stance, can the nation ensure a stable supply of power? It is hoped that the candidates will present compelling visions for the future.

(From The Yomiuri Shimbun, Sept. 23, 2024)