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Japan after Abe

Japan's Suga leans on contacts with reformers and CEOs

PM hopeful mixes with Goldman former analyst, Suntory chief and US ambassadors

Yoshihide Suga, Japan's PM in waiting, will look to advisors ranging from former U.S. Ambassador Caroline Kennedy, to Suntory CEO Takeshi Niinami, left, to ex-Goldman Sachs analyst David Atkinson. (Nikkei Montage/Source photos by Manami Yamada and AP) 

TOKYO -- Yoshihide Suga, the newly elected president of Japan's ruling Liberal Democratic Party, will tap his extensive web of advisers as he takes over as prime minister from longtime leader Shinzo Abe.

Suga is all but assured to be chosen as the next prime minister at an extraordinary session of parliament convening Wednesday. His extensive network of contacts is drawing attention as a guide to the new administration's domestic and diplomatic policies as well as to his economic management.

Many of Suga's close connections have called for reform in their respective fields, from tourism to the bureaucracy, sparking hopes that he could advance Japan's stalled push for structural reform -- especially with the help of his many friends outside the LDP.

Back when Suga was still a fresh-faced lawmaker, his mentor Seiroku Kajiyama warned him that "bureaucrats are masters at explaining things away, so someone like you would be easily fooled."

Suga took the message to heart and made it his mission to get to know power brokers so as not to be fooled. He later inherited the expansive connections Kajiyama had fostered across the country's politicians, bureaucrats and business elite.

Suga leaned heavily on such connections during his seven years and eight months as chief cabinet secretary under Abe. He would meet with different key figures over breakfast, lunch and dinner -- oftentimes even a second dinner.

The aggressive push to boost inbound tourism under Abe was based largely on recommendations by David Atkinson, a U.K.-born former analyst for Goldman Sachs who has written extensively about the shortfalls of Japan's tourism sector.

In March 2016, the Japanese government doubled its target for foreign visitors to 40 million by 2020. The Japan Tourism Agency's budget has skyrocketed to roughly 70 billion yen ($659 million), thanks to a new exit tax and other measures, from roughly 10 billion when Abe began his second stint in office more than seven years ago.

Atkinson advocates raising the minimum wage and consolidating small and mid-size businesses. "It's worth considering," Suga said of these ideas in a Sept. 5 interview with Nikkei.

Another Suga adviser, Suntory Holdings President and CEO Takeshi Niinami, has also called for a higher minimum wage.

On regulatory reform, Suga looks to input from Yasufumi Kanemaru, chairman and president of consultancy Future Corp., and a former member of the government's Council for Regulatory Reform. Kanemaru is knowledgeable on digital policies and pushed to lift restrictions on telemedicine in Japan.

Suga also has many connections that could help him with his key policy goals, like cutting mobile phone rates and consolidating regional banks. Hiroshi Mikitani, for example, is chairman and president of Rakuten, which launched mobile service this year. Heizo Takenaka was minister for internal affairs and communications under then-Prime Minister Junichiro Koizumi in the 2000s and led the government's structural reforms at the time.

Hiroto Izumi, a friend from Suga's early days in the parliament, was tasked with facilitating the move of a U.S. Marine Corps base from Futenma to Henoko in Okinawa Prefecture.

But despite his commitment to continuing Abenomics, Suga is not as close to proponents of reflation. In contrast, Abe had actively tapped reflationary figures as economic advisers, such as Yale University economics professor emeritus Koichi Hamada and Etsuro Honda, a key architect of Abenomics.

Suga's diplomatic policies and overseas connections are not widely known, since he largely stayed on the sidelines in diplomacy. But he did foster a friendship with Caroline Kennedy through monthly meetings during her tenure as U.S. ambassador to Japan.

When Suga visited the U.S. in April 2019, Kennedy invited him to her home and presented him with a cake decorated with the kanji characters for "Reiwa" -- the name of Japan's new imperial era that began that year. Suga had been the one to announce the new era's name, and photos of him holding up a sign with those characters had gone viral.

Suga also met with U.S. Vice President Mike Pence on that trip. Pence walked him all the way to the car afterward.

He is in communication with former U.S. Ambassador to Japan William Hagerty, as well as Hudson Institute President Kenneth Weinstein, who has been nominated as Hagerty's successor.

With China, Suga has dealt primarily with top diplomat Yang Jiechi.

Suga's circle extends far beyond the ruling Liberal Democratic Party. He has worked with Ichiro Matsui, Osaka mayor and head of Nippon Ishin no Kai party, as well as Toru Hashimoto, founder of the Osaka Restoration Association. The three usually meet at the end of the year with Abe to discuss their shared views on administrative reform and revising Japan's constitution.

Suga is also a trusted figure in junior coalition partner Komeito and its main supporter, a Buddhist group called Soka Gakkai. He has worked with Komeito's Yoshihisa Inoue to coordinate on tax reform and elections.

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