Does New Japanese Economy Minister Ishihara Have the Right Stuff?
Some doubt that Nobuteru Ishihara, son of a famed right-wing politician, possesses the skills to help steer his country to recovery.
Nobuteru Ishihara has always lived in the shadow of his famous father, archconservative fellow politician Shintaro Ishihara. But those days may be over for Japan’s new Economy minister.
With Japanese growth stalled, the younger Ishihara faces a tough test as successor to Akira Amari, former chief steward of the Abenomics program. When Amari resigned in late January amid bribery allegations, Prime Minister Shinzo Abe swiftly appointed Ishihara, 58, whose duties include negotiating with the U.S. on finalizing the Trans-Pacific Partnership trade pact. Ishihara previously held other cabinet posts and had been secretary general of Japan’s ruling Liberal Democratic Party since 2010.
Kenneth Courtis, former vice chair of Goldman Sachs Asia, doubts that he’s up to the task. “The son of the far-right-wing nationalist former governor of Tokyo, Ishihara has neither the weight nor the experience of Amari, nor any well-established economic credentials,” says Courtis, chair of Starfort Investment Holdings, a Cayman Islands–registered firm with offices in London, New York and Tokyo.
But Ishihara’s family name carries plenty of weight in Japan, where right-wingers who long for the country to return to its imperialist past still dominate the political arena — and regard him as ideological heir apparent to his dad. “Though Ishihara does not have the economic or financial experience, he does have the political backing of the right,” says a Japanese investment banker who asked not to be identified.
Before Abe was elected prime minister for the second time, in 2012, Ishihara ran against him for the job of LDP president. By naming Ishihara to the Economy post, Abe has neutralized a potential challenger, the banker contends. “Given the fact that he knows little about finance, he will in fact take more directions from Abe on policy implementation, making him further integrated in Abe’s camp and less of a rival in the future.”
Ishihara grew up in the outskirts of Tokyo, in Zushi, a picturesque seaside resort town where his father rose to national prominence as an author and politician advocating Japanese resistance to U.S. hegemony. The elder Ishihara, who served as Tokyo governor from 1999 to 2012, penned more than 40 books; among his writings is “The Japan That Can Say No: Why Japan Will Be First Among Equals,” a 1989 political treatise co-authored with ex–Sony Corp. chair Akio Morita that urged the country to stand up to America and eschew U.S. business practices.
After earning a BA in literature from Keio University, Ishihara spent most of the 1980s as a political reporter for Nippon Television Network Corp., where his purview included the Finance and Foreign ministries and the prime minister’s office. In 1990 he won a seat in the lower house of the National Diet, Japan’s legislature; in 2001 then–prime minister Junichiro Koizumi named him minister of State for Administrative and Regulatory Reform.
Ishihara also briefly served as minister of Land, Infrastructure and Transport before he made his first bid for the LDP presidency in 2008, finishing fourth in a race won by Taro Aso, who later became prime minister for one year. Now Abe’s deputy PM and Finance minister, Aso is a chief proponent of Abenomics.
The program, whose so-called three arrows are quantitative easing, fiscal stimulus and structural reforms, has failed to revive the Japanese economy, which contracted by 0.4 percent year-over-year in the last quarter of 2015. With the Bank of Japan having launched what Starfort’s Courtis describes as a “sneak attack” on short-sellers of the yen and domestic equities with its recent move to negative interest rates, and governor Haruhiko Kuroda signaling that the central bank may head much further into negative territory, Japan now has “no choice but to deliver on meaningful economic reforms,” Courtis says. He believes that task will be difficult, especially with Ishihara, whom he describes as an economics “lightweight,” handling the file.
“Until now, Abenomics has been very little more than a marketing slogan,” Courtis says, noting that real per-capita income for salaried workers has dropped 6.2 percent since Abe took power in 2012. Stemming Japan’s economic decline calls for powerful measures to boost domestic demand, such as abandoning sales tax hikes, he argues. “It is not as if Ishihara does not have his work cut out for him.”
Follow Allen Cheng on Twitter at @acheng87.