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12 Nov 2020

Defense Ministry seeking ‘drastic' increase in fiscal 2022 budget

Defense Ministry seeking ‘drastic' increase in fiscal 2022 budget
Defense Minister Nobuo Kishi inspects the troops at the Ground Self-Defense Force's Camp Higashi-Chitose in Hokkaido. (Naoki Matsuyama)

The Defense Ministry is seeking a huge increase in its budget request that tops even the record figure included in the current fiscal year budget.

The large increase will serve as proof that Tokyo is sticking to a pledge made in the April meeting between Prime Minister Yoshihide Suga and U.S. President Joe Biden, but is also being eyed to keep in partial step with China's huge military spending increases.

The budget request, which the ministry is expected to compile by the end of August, will far exceed the 5.342 trillion yen ($48.4 billion) included in the fiscal 2021 budget.

After the Suga-Biden summit in Washington, Japan and the United States released a joint statement that said, “Japan resolved to bolster its own national defense capabilities” to further strengthen the alliance with the United States and regional security.

“A major increase in defense expenditures will be one way of keeping that promise with the United States,” a Defense Ministry source said.

The ruling Liberal Democratic Party got behind the Defense Ministry when its National Defense Division issued a recommendation in May asking for a “drastic” increase.

LDP lawmakers are calling for a 6-percent increase over last year and said that the minimum amount for the budget request was 5.4 trillion yen.

The figure nears the level of the defense spending increase by China, whose defense budget for fiscal 2021 was a 6.8-percent increase over the previous year.

But according to Japan’s Defense White Paper, China’s defense spending rose annually about 10 percent every year between 1989 and 2015.

In yen terms, China’s spending in fiscal 2021 came to 20.3 trillion yen.

As a percentage of gross domestic product for fiscal 2020, China’s defense spending came to 1.25 percent, while Russia’s figure was 3.09 percent and South Korea spent 2.61 percent of its GDP on defense.

In contrast, Japan spent 0.95 percent of its GDP in fiscal 2021, if amounts spent for realigning the U.S. military in Japan are included.

A potential cap on the defense budget request is the five-year Mid-Term Defense Program, which outlines the defense equipment to be purchased and the overall spending.

The current program covers the fiscal years between 2019 and 2023 and states that total spending for that period should be about 25.5 trillion yen.

The two remaining fiscal years under that program now have 10.3 trillion yen available so some accounting magic may be needed to allow for a major increase for fiscal 2022.

One measure LDP lawmakers are mulling is to use some of the funds that would have gone for use in fiscal 2023 to fiscal 2022 and then revise the Mid-Term Defense Program to make up for the shortfall in fiscal 2023.

Finance Minister Taro Aso would normally be expected to be pessimistic about any major increases in government spending.

But at an Aug. 10 news conference, he indicated understanding for what the Defense Ministry was trying to do.

“If other nations are increasing spending, a similar measure will have to be taken,” he said.

However, Finance Ministry bureaucrats were also saying that the Defense Ministry alone would not be able to decide on the amount of the increase, especially as other pressing areas require large amounts of government spending, such as in dealing with the novel coronavirus pandemic and social welfare expenditures to match the graying of the population.

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