Tokyo: Ruling party chooses new leader to replace Premier Suga

Two men and two women candidates for the leadership of the Liberal Democrats. In recent days they have outlined their economic policies to lift the country after the pandemic: the most enterprising is Takaichi; the favorite in the polls is Kono. General elections in November.

Tokyo (AsiaNews/Agencies) - Today sees the start of the election campaign for the leadership of the Liberal Democratic Party (LDP), which on September 29 will decide the successor to Prime Minister Yoshihide Suga. The candidates are two men and two women: former Foreign Minister Fumio Kishida, former Communications Minister Sanae Takaichi, Vaccination Minister Taro Kono and Seiko Noda, acting secretary general of the LP.

The new party leader will automatically become premier because the LP controls the House of Representatives. Suga resigned earlier this month after public support for him hit an all-time low due to the response to the Covid-19 pandemic.

The next prime minister will have to deal with Japan's fiscal health: the world's third-largest economy is saddled with a public debt of more than 1.2 trillion yen (8.5 trillion euros), corresponding to more than 200% of its annual gross domestic product. Japan's primary deficit has more than doubled in recent months due to a decrease in tax revenues and an increase in pandemic spending.

According to analysts, Takaichi appears to be the more resourceful candidate on fiscal spending than Fumio Kishida and Taro Kono, although the latter is given as the favorite in the polls.

"The three contenders can distinguish themselves by launching their own fiscal policy and growth strategy, but Takaichi's fiscal policy seems more expansionary and if applied it would be easy to increase budget deficits," explained Yoshimasa Maruyama, chief economist at SMBC Nikko Securities. As she stated at the press conference, Takaichi's economic plan is a reshaped version of former Prime Minister Shinzo Abe's "Abenomics."

Kishida said she will "maintain the banner of fiscal consolidation," but also promised an economic package of "trillions of yen" to combat the consequences of the Covid-19 pandemic and narrow the gap between rich and poor in the country. The economic policies of Kono and Noda (who only joined the race yesterday) are less clear.

With the pandemic holding back the country's economic recovery, businesses and people need financial aid. All the candidates plan a stimulus package, according to Yuichi Kodama, chief economist at the Meiji Yasuda Research Institute. They may, however, have chosen policies that meet with public favor looking ahead to this fall's general election, added Takahide Kiuchi, executive economist at Nomura Research Institute. The election for the House of Representatives is likely to be held on Nov. 7 or 14. The Democratic Constitutional Party and three other opposition groups have proposed lowering the consumption tax, but the measure does not have the support of the LP leadership candidates.