The following is from an essay by Professor Yōichi Takahashi, published in Weekly Fuji.
A must-read not only for Japanese citizens but for people around the world.
“The ‘Post-Ishiba’ Battle Between Koizumi and Takaichi Backed by the Ministry of Finance: The Fundamental Divide Between the Sanseitō and the Conservative Party”
By Yōichi Takahashi
Japan’s Way Forward
In the opinion poll conducted by the Sankei Shimbun and FNN (Fuji News Network) on the 14th and 15th, Agriculture Minister Shinjirō Koizumi ranked first as “the next Prime Minister,” followed by former Economic Security Minister Sanae Takaichi.
If Mr. Koizumi were to become the next Prime Minister, in what direction might his policies go?
Does Ms. Takaichi have any strategy to counter him?
The poll also showed that support for the Democratic Party for the People declined, while the Sanseitō gained traction—what is behind this shift?
I have written in various places that lowering the price of rice is a “trivial” task, but the media’s glorification of Koizumi is excessive.
There’s something about it that resembles “Koizumi Theater,” reminiscent of his father, former Prime Minister Junichirō Koizumi.
“Koizumi Theater” and Secretary General Moriyama
LDP Secretary General Hiroshi Moriyama and former Agriculture Minister Takashi Etō both opposed Koizumi Sr.’s postal privatization and have a history with him.
The tension between them and Koizumi Jr. now adds drama to this new “theater.”
I myself was involved in the detailed institutional design of postal privatization.
So let’s revisit how that turned out.
The privatization we envisioned lasted effectively only “two years.”
Once the Democratic Party came to power, the Postal Privatization Act was amended, resulting in what could be described as “de facto re-nationalization.”
Privatization should mean “private ownership and private management,” but under the DPJ, the release of Japan Post shares was halted, and Yoshifumi Nishikawa—former Japan Post President and key figure from Sumitomo Mitsui Banking Corporation—was effectively dismissed.
Mr. Nishikawa brought in several dozen trusted aides to Japan Post.
In an organization as massive as Japan Post, without such personnel, proper management is impossible.
In that sense, Nishikawa was sincerely trying to privatize it.
After him, private-sector appointees came in name only; most brought no trusted staff and were merely figureheads doing the bidding of the bureaucracy.
The Collapse of Postal Privatization
Due to these circumstances, postal privatization collapsed.
Since it was essentially re-nationalized, it’s no wonder Japan Post has stagnated since.
Lacking appeal, it drew no interest from foreign investors.
Regulations placed on foreign investment at the time of privatization remain, so the oft-repeated claim that “it was sold off to foreigners” is baseless.
This is the “reality after postal privatization.”
Back then, the public was swept up in postal reform enthusiasm, and support for the Koizumi administration was high.
However, Koizumi Sr. was so obsessed with postal reform that he famously declared, “I will not raise the consumption tax during my term,” deeply disappointing the Ministry of Finance.
This is a key point.
To avoid repeating that experience, the Ministry of Finance has likely been preparing Koizumi Jr. with lectures on the consumption tax.
The fact that Koizumi Jr. suddenly used the accounting term “discretionary contracts” suggests, in my view, that the Ministry of Finance is fully backing him.
Thanks to this new “Koizumi Theater,” the virtually “dead” Ishiba administration has shown signs of recovery.
Not because Ishiba did anything—but because of Koizumi’s popularity.
In the upcoming Upper House election scheduled for July 20, the LDP is unlikely to suffer a loss, even if not a sweeping win.
The LDP and Komeito already hold 75 uncontested seats.
To secure a majority, they need just over 50 more—something the LDP alone could achieve.
No Long-Term Ishiba Administration
That said, even if the LDP wins the Upper House election, a long-term Ishiba administration is unlikely.
After the election, the “Post-Ishiba” succession battle will begin.
Seeing that Takaichi is steadily building her base, involving former Finance Minister Tarō Asō, it’s natural to assume that the Ministry of Finance has shifted to supporting Koizumi.
The fact that Secretary General Moriyama did not oppose Koizumi’s appointment as Agriculture Minister also hints at bureaucratic involvement.
After the election, I suspect the focus will not be on agricultural reform (riding on Koizumi’s popularity), but rather on “tax hikes.”
If so, the public must not get carried away.
We should be highly cautious of the media-driven Koizumi popularity.
What will Takaichi do?
Her likely strategy until the election is to consolidate the conservative bloc within the LDP and prepare for the “Post-Ishiba” phase.
Her policies are her strong point.
Given time, such a steady strategy has every chance of succeeding.
