New prime minister would carry on with Abe’s IR development policy
As far back as January this year, Japan’s Chief Cabinet Secretary, Yoshihide Suga made the point that the bribery case involving Chinese online gaming firm 500.com would not impact the nation’s IR schedule, adding: “The Chinese company under investigation has no history of IR and we have to be suspicious about what the real story actually is. This is not an issue with IRs.”
As news came that Suga is favourite to replace outgoing prime minister Shinzo Abe, the prospective Japan prime minister stated that, “the national policy of introducing casino resorts was vital to the country’s plan for promoting inbound tourism,” and that he would proceed with it.
Japan is in need of a smooth transition to get down to brass tacks on the economy that has sunk deeper into its worst post-war recession, reporting a record 28% annualised contraction in the second quarter of this year.
Now, development of three IRs with casinos would help on the economic recovery post Covid-19, and bring a welcome sigh of relief that millions of dollars of investment will begin to stimulate the building industry with projected development of the casinos for three prefectures. Up to three casino resorts are to be permitted in Japan in a first phase of gaming industry liberalisation.
Suga’s candidacy to become party leader of the Liberal Democratic Party gains momentum before next week’s leadership bid to be held on Sept. 14, having secured almost 308 (80%) of ruling LDP members with seats in parliament, giving him 58% of total LDP votes. As this is more than the majority required, it’s odds on that he is the person most likely to replace prime minister Shinzo Abe who resigned on August 28.
Banking group Nomura said in an August 28 memo that, “were Mr Suga to take over the top job, the casino policy would in likelihood remain in place. We think that Mr Suga would continue Mr Abe’s economic policies. Having served as chief cabinet secretary since December 2012, he has had a guiding hand in the way successive (second to fourth) Abe administrations have kept a tight rein on policy and can be expected to maintain that style if elected.”
“As well as continuing Mr Abe’s policy of reforming the social security system, we expect he would continue his policies of promoting tourism, including legalising casinos, and cutting mobile phone charges,” added the Nomura memo.
However, not all will be plain sailing for Japan’s IR projects, as leader of the Opposition Yukio Edano has renewed his vow to combat the government’s IR development policy. As clear reference to recent comments by Suga, Edano said: “The casino issue is symbolic of the clear confrontational axis between top-down politics and grassroots politics… We cannot let matters continue as they have under the Abe administration.”
