You worked with Suga’s team when he was Chief Cabinet Secretary. What insights do you have into what sort of prime minister he will be?
Suga has been a very important key player in the cabinet as a very close partner for Prime Minister Abe, especially around coordinating with key ministries. When the government planned reforms or new initiatives, they needed strong support from key ministries such as taxation or education or labor reform or anything. Suga has been vocal in promoting the key initiatives that push the national economy, including relaxing visas for visitors and restrictions on professional workers.
Suga also strongly supported an initiative in taxation, what we call “Furusato Nozei,” a policy aiming to revitalize regional economies by allowing tax-deductible donations to municipalities. He comes from a rural background as well, so decentralization and revitalizing regions in Japan is an important theme for him.
Suga really understands the importance of leveraging the global economy for Japan’s benefit. He was a strong supporter for promoting and exporting Japanese agriculture products to other parts of the world, a key mindset change, as traditionally Japanese agriculture has not been export-orientated. One common theme that runs through all of this is, he has been very focused on revitalizing the Japanese regional economy through attracting foreign investment and people. Consistency is key. Some analysts are already saying that “Suganomics” will take over from Abenomics.
In terms of geopolitics, I think the main thing on the minds of many is the US-China relationship. How do you see that affecting Japanese businesses abroad and as non-Japanese businesses interested in Japan?
Yes, the general geopolitical tension affects Japanese politics as well as the Japanese economy and business environment. Aligned with the security measures or political measures taken by the US or other countries, the Japanese government has implemented restrictions or new rules around trade with foreign countries.
Japanese corporations have been affected by a decrease in trade volume with China, while seeking more partners in South East Asian countries. However, Japanese corporates really understand the importance of keeping business ties with China, and hence the key going forward will be whether some perceived security concerns can be addressed and whether trust in China and Chinese companies can be improved.
In terms of regional or international security, Suga will likely take over the course charted by Abe and emphasize the US-Japan alliance and partnership with India, Australia, as well as important relationships with China and other Asian countries in order to secure this region.
Yoichiro Sato is a Brunswick Director in the firm’s newly opened Tokyo office and was previously on the government affairs team at Goldman Sachs. Yoichiro served as special assistant to Prime Minister Shinzō Abe on foreign affairs and as Chief Cabinet Secretary, working directly not only with Prime Minister Abe, but also with the team of Yoshihide Suga, now the current Prime Minister. Yoichiro also served with Japan’s Ministry of Foreign Affairs and was instrumental in the negotiations for the economic partnership agreement between Japan and the European Union, in addition to his two-year station in Pakistan as part of a front line on the war on terrorism.
Daisuke Tsuchiya is a Brunswick Partner and Head of Japan. He is a former Japanese government official who often served as interpreter to Shinzō Abe during his first tenure in office, 2006–2007, on occasions such as the G8 Summit and other meetings with global leaders. Daisuke is currently based in the firm’s London office.
Photographs courtesy of Shinzo Abe, Yoichiro Sato and Daisuke Tsuchiya.