Despite significant gains in Japan’s foreign engagements, it is the country’s domestic challenges which largely motivated Kishida’s decision to not contest the upcoming leadership vote
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Ahead of the Liberal Democratic Party’s (LDP)—Japan’s current ruling party—leadership vote, scheduled in September, party leader and Prime Minister Fumio Kishida, announced that he will not contest the vote. The leadership contest would, therefore, see new potential contenders for the top party post and the position of the Prime Minister before the country’s general elections due in 2025.
Kishida’s foreign policy successes mark a significant era in the country’s post-war diplomacy. As foreign minister, Kishida played a pivotal role in prioritising and reshaping Japan's foreign policy. He strengthened the scope of partnerships in a period marked by increasing Indo-Pacific tensions, particularly with China's assertiveness in the South China Sea and North Korea's nuclear ambitions. Subsequently, as Prime Minister, Kishida's legacy has been defined by the continuity and adaptation of the policies he championed as foreign minister.
Under his leadership, Japan has continued to position itself as a key player in international diplomacy alongside a renewed emphasis on multilateralism, as seen in Tokyo’s active role in the Quad and other international forums.
His approach has been characterised by a careful balancing act—maintaining strong ties with the United States (US) while navigating increasingly complex relations with China and Russia. Under his leadership, Japan has continued to position itself as a key player in international diplomacy alongside a renewed emphasis on multilateralism, as seen in Tokyo’s active role in the Quad and other international forums. He was a driving force behind the Japan-European Union Economic Partnership Agreement, a landmark trade deal that underscored Japan’s commitment to free trade amidst rising protectionism globally. Although a resolution was not achieved, Kishida’s persistent engagement in navigating the complexities of Japan’s relationship with Russia, particularly regarding the longstanding territorial dispute over the Northern Territories, helped keep diplomatic channels open. Tokyo’s bilateral ties with countries in the neighbourhood, including South Korea, improved during Kishida’s tenure as it did with other countries in the Indo-Pacific, notably the Philippines, India, and of course, the US. Particularly with respect to external engagements, his commitment to Japan's core foreign policy principles—strengthening alliances, advocating for free trade, and promoting regional stability—has remained steadfast.
Kishida and the LDP have faced challenges in maintaining domestic political stability and retaining public support. The LDP’s position has been periodically threatened by widespread dissatisfaction over various issues, including economic policies, social welfare, and government transparency. Kishida’s moderate and consensus-driven approach has also been criticised for lacking decisiveness in the face of pressing issues. Despite significant gains made in terms of Japan’s foreign engagements and contributions, it is its domestic challenges which largely upended the administration and motivated Kishida’s decision to not contest the upcoming leadership vote.
Kishida’s moderate and consensus-driven approach has also been criticised for lacking decisiveness in the face of pressing issues.
One of the most significant challenges is the country’s long-standing economic stagnation. Despite efforts by even Kishida's predecessors, including Shinzo Abe’s “Abenomics,” Japan has struggled with deflation, an ageing population, and a shrinking workforce. Kishida has sought to address these issues through his “New Capitalism” initiative, which promotes wealth redistribution and tackles income inequality.
Second, the pandemic highlighted several domestic issues in managing public health concerns alongside the management of economic disruption. Kishida has navigated vaccine rollouts, healthcare system strains, and public dissatisfaction with the government’s response, while also trying to ensure a swift economic recovery. The pandemic also aggravated existing issues, such as labour shortages and the need for healthcare reform, which further complicated the government’s agenda.
Third, Kishida has had to balance the country’s energy security needs, economic considerations, and Japan’s commitments to reducing greenhouse gas emissions. The transition to renewable energy has been slow, and Kishida's administration has faced criticism for not doing enough to address climate change and for relying too heavily on nuclear power.
Fourth, and most importantly, Kishida’s low approval ratings were triggered by a series of scandals related to unrecorded political donations and the party’s ties with the controversial Unification Church that implicated many of the LDP’s lawmakers. The cabinet recorded a 55 percent disapproval rating in August 2024.
The transition to renewable energy has been slow, and Kishida's administration has faced criticism for not doing enough to address climate change and for relying too heavily on nuclear power.
Notwithstanding the above challenges, Kishida’s contributions will remain significant for the country. First, despite criticisms, Kishida's New Capitalism policy formed the central pillar of his economic agenda and sought to address the country's growing income inequality and wealth disparity, which have been exacerbated by years of economic stagnation. He advocated for higher worker wages, increased public investment in innovation and technology, and stronger social safety nets to balance growth with social equity.
Second, Kishida recognised the need to balance the pacifist constitution's constraints with the realities of a more volatile regional security environment, as the administration paved the way for a significant increase in defence spending. Marking a departure from Japan's traditionally low defence spending, the government moved towards a defence expenditure target of 2 percent of GDP, reflecting the growing recognition of the need to enhance military readiness. Kishida has also supported the revision of Japan's National Security Strategy and launched the Overseas Security Assistance initiative to allow for more proactive defence measures.
The focus on digital transformation is intended to enhance productivity, address demographic challenges, and position Japan as a leader in the global digital economy.
Third, Kishida prioritised policies aimed at promoting digital transformation and launched initiatives to modernise the country’s digital infrastructure, promote digital literacy, and encourage innovation in critical areas such as artificial intelligence, fintech, and biotechnology. The focus on digital transformation is intended to enhance productivity, address demographic challenges, and position Japan as a leader in the global digital economy.
From a foreign policy perspective, Kishida’s most significant contribution is transforming Tokyo’s global position. His efforts also highlight his approach to addressing the country's immediate challenges and long-term structural issues. However, the country’s successful external role and its partnerships do not serve to counterbalance the domestic problems that face the leadership. Thus, Kishida’s decision is a considered one and also one that would offer opportunities for new party leadership to overhaul the position of the LDP ahead of the general elections in 2025. Despite the problems that have plagued the LDP, as one of Japan’s longest-serving foreign ministers and as Prime Minister, Kishida's legacy is one of continuity, stability, and a pragmatic approach to navigating the geopolitical complexities of the 21st century.
Pratnashree Basu is an Associate Fellow, Indo-Pacific at Observer Research Foundation
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Pratnashree Basu is an Associate Fellow, Indo-Pacific at Observer Research Foundation, Kolkata, with the Strategic Studies Programme and the Centre for New Economic Diplomacy. She ...
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