Prime Minister Suga likely to hit the brakes on IR development

The emergence of Chief Cabinet Secretary Yoshihide Suga as the all-but-certain next prime minister of Japan is good news for Japan’s pro-IR community. However, even with a solid friend in the Kantei, there’s plenty of reason to believe that the government is about to hit the brakes.

On the one hand, if Shinzo Abe had to go, having Suga as his replacement is the best outcome for those who advocate IR development in Japan. Suga has been Abe’s right-hand man for almost eight years and has personally overseen a significant portion of the government policymaking on the issue.

Were another one of the viable ruling party candidates to have come out on top, they all would have been generally favorably disposed to IR development, but none of them would have had the same “skin in the game” that Suga does.

Moreover, it is widely believed—though the direct public evidence is lacking—that it was Suga who pushed Yokohama Mayor Fumiko Hayashi into the IR race at considerable expense to her own political reputation within the local community. Suga is a Kanagawa-based lawmaker and appears to strongly desire that his local area should host one of the first IRs in the nation.

As prime minister, however, he is going to have to balance his own pro-IR inclination against a number of sobering political and practical factors that all argue for him to delay the development timeline.

While Suga is anticipated to win his Liberal Democratic Party presidential election in a decisive fashion, his emergence as the nation’s leader will have been very much an insider’s affair, arranged by a handful of ruling party grandees with no real public input. In fact, the polls show clearly that the general public prefers his rival Shigeru Ishiba by a wide margin.

While it can be expected that, once he is installed as prime minister in mid-September, his poll numbers will rise significantly as the public looks hopefully upon their new national leader, the initial honeymoon will include a lot of very soft support that could easily evaporate.

Prime Minister Suga will be obligated to call a new general election by October 2021—a little over a year from now—and his priority, should he wish to avoid the fate of becoming just a forgettable caretaker leader, will be to curry support with the public to see him past that first major hurdle.

Should he survive beyond that stage, and presuming that the general elections will be held next summer (and they could come earlier), political attention will almost immediately become focused on July 2022 when the next House of Councillors elections will be held.

Those who believe that Suga will simply move forward with IR development according to the current schedule are required to believe that a new prime minister, in the midst of trying to establish himself and facing two national elections in less than two years, is willing to champion a profoundly unpopular policy in the middle of a global pandemic and a national economic meltdown.

That’s a stretch. More likely, should he survive the two national elections with the ruling party’s firm majority still intact, then perhaps in the autumn of 2022 it might make sense for Suga to return to the IR development policy that he believes in. Until that time, it is probably best to keep it on ice and out of the newspaper headlines as much as possible.

There are also some non-political, practical reasons why it makes sense to put the brakes on the process, mainly related to the Covid-19 pandemic.

There is no reason to dwell on them because we have covered these points in previous weeks: With the financial losses being suffered by many gaming companies around the world, this is just about the worst time to expect them to invest billions of dollars in a new market that—while absolutely promising—is creating a highly questionable regulatory regime and may make it near impossible for these firms to recoup their investments and make profits commensurate with the risks.

But even if there is a delay for a couple of years, there is still plenty of important preparatory steps that can be taken now.

For example, the number one concern of the Japanese public regarding IRs remains the issue of gambling addiction. While the Abe government did pass a mostly symbolic bill, there has been no discernible progress in addressing the issue. Frankly, the government has seemed rather disinterested in the subject. It would both make political sense and be good public policy to create a robust anti-addiction framework for the Japanese nation while IR development itself is stuck in neutral.

The Suga administration may not be able to do it fast, but if they show some creativity and forethought, they can still do it right. (AGB Nippon)