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Defense spending at a crossroads

The government is urged to craft concrete measures to prepare for a possible contingency with the Chinese military, which has been expanding its activities, but it needs to tackle various issues, including its internationally low defense spending.

The government plans to draw up an integrated defense strategy, which stipulates Self Defense-Forces response measures to deal with such a contingency in parallel with a joint operation plan, which sets forth cooperation between Japan and the United States.

The administration of Prime Minister Shinzo Abe increased defense spending for five consecutive years. A total of ¥5.12 trillion was earmarked for the fiscal 2017 budget. This marked a 1.4 percent increase from the previous fiscal year.

Among major countries, the United States’ military spending in the last five years was 4.2 percent of its gross domestic product on average, Russia’s was 4 percent, China’s 2 percent, and Britain’s and France’s 2.3 percent. Japan’s defense spending stood at an outstandingly low 1 percent.

The reason for Japan’s low defense spending is that it relies on the U.S. military’s deterrence, including its “nuclear umbrella.”

The government currently pays about ¥760 billion to cover the costs related to U.S. forces stationed in Japan. During the U.S. presidential election campaign, however, President-elect Donald Trump criticized the Japan-U.S. alliance, which he described as unfair, saying it obliges only the U.S. side to defend Japan. He called on Japan to shoulder more of the costs of hosting U.S. forces in Japan.

China has been sharply increasing its military budget, which totaled a record high of about 954.3 billion yuan, or about ¥16.2 trillion, last year. However, its military spending is opaque and there is an estimate that the actual military spending is about 1.6 times that figure.

China is continuing with the modernization of its sea and air power, including the construction of a domestic-built aircraft carrier. In the future, the SDF may lag behind the Chinese military not only in terms of quantity but also quality.

North Korea is continuing with its nuclear and missile development. The “nightmare” of a miniaturized warhead loaded onto a ballistic missile is about to become a reality.

Given the circumstances, the reinforcement of the missile defense system is an urgent task for Japan. The government has begun full-scale discussions on the introduction of the Terminal High Altitude Area Defense, a cutting-edge U.S. missile defense system, and Aegis Ashore, a land-based Aegis system. However, the introduction of the systems is said to cost hundreds of billion yen each.

The country’s defense spending is at a crossroads. An official at the Prime Minister’s Office said, “[What we can do] with the defense budget of about 1 percent of the GDP is near its limit.”

Given tight fiscal conditions, some within the government are calling for enhancing the “quality” of the country’s defense capabilities through increased cooperation between the SDF and the Japan Coast Guard, for the time being.

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