In late May, a panel on national security and defence held by Japan’s ruling Liberal Democratic Party (LDP) issued a draft proposal calling for a significant increase in Japan’s defence budget, among other defence related recommendations. This proposal, alongside recent comments made by Japan’s Minister of Defence, suggests a shift towards higher levels of spending and a more proactive defence policy.
The Proposal
The LDP proposal, which was hammered out on 24th May, focused predominantly on increasing Japan’s defence expenditure in the face of increased defence spending by many of Japan’s neighbours. For example, China increased its defence spending by approximately 6.6% between 2019 and 2020. It is worth noting that, at the time of writing, China spends 4 times the amount Japan does on defence. Moreover, South Korean defence spending increased by 7.4% over the 2019-2020 period, and is set to increase by around 5.4% in 2021.
Underlining Japan’s sluggish pace compared to its neighbours on defence, Japan’s defence spending increased by only around 1.1% between 2020 and 2021. Admittedly, Japan still spends more overall on defence than South Korea, according to data from 2020 collected by the Stockholm International Peace Research Institute, at USD$49.1billion compared to South Korea’s USD$45.7 billion. Nevertheless, given Japan’s slow pace, the LDP proposal called for Japan to achieve a comparable rate of growth by 2022’s budget.
In terms of areas where the budget increase would be applied, the proposal particularly highlighted the development of next generation fighter aircraft and, in conjunction, investment into the utilization of AI and drone technologies for such aircraft. In addition, the proposal called for research and development into long range standoff missiles, in keeping with a policy shift undertaken in December 2020 towards the construction of a maritime long range missile capability. Of course, the submission of this proposal does not mean much at face value for Japanese defence spending. After all, despite the Ministry of Defence requesting a budget increase of 8.3% in September 2020, defence spending only increased by the aforementioned 1.1%.
Lifting the Spending Cap
However, there are indications that the government will be more likely to take the LDP proposal into consideration given recent statements by government officials. Notably, last month both Minister of Defence Kishi Nobuo and Kato Katsunobu, the Chief Cabinet Secretary, expressed that the government is not concerned with keeping defence spending below 1% of Japan’s GDP. Since 1976 Japan has maintained the informal rule that defence spending will not exceed 1% of the country’s GDP. To date, this rule has only been broken once; this was in 2010 when Japan’s GDP dropped due to the effects of the 2008 financial crisis.
Taking these statements into account and the fact that, owing to the financial impact of the COVID-19 pandemic, Japan’s 2020 GDP suffered a contraction worse than that which occurred during the 2008 global financial crisis, it’s quite probable that Japan’s 2022 defence budget will exceed 1% of the country’s GDP. Nevertheless, it is worth noting that Japanese officials have spoken of exceeding the 1% cap in the past, yet ultimately not followed through. Particularly, in 2017 then-Prime Minister Abe Shinzo stated that Japan would not follow the 1% policy, yet ultimately little changed. Thus, the possibility exists that these recent statements will likewise not amount to much. Unlike Shinzo, Prime Minister Suga Yoshihide has not taken a clear stance on increasing the defence budget.
The approval rating of PM Suga’s administration and historic public opinion polling results concerning defence spending, similarly suggest that, in the short term, defence spending will not increase significantly beyond the 1% cap if it exceeds 1% at all. A 14th May opinion poll found that Suga’s Cabinet has an approval rating of only 32.2%, the lowest level since the Cabinet’s formation. Concerning spending, a 2018 opinion poll found that the majority of respondents (36%) felt that Japan should keep its defence spending at the 1% level. With both these facts in mind, it is possible that Suga’s Cabinet will remain wary about exceeding the 1% cap out of a desire to avoid criticism over unnecessary spending during the COVID-19 health crisis.
In conjunction with the above, the fact that an LDP leadership election and a general election are scheduled for September and October respectively, also raises the possibility that Suga will hold off on boosting defence spending. The possibility that increasing defence spending in the face of the pandemic might generate negative publicity, suggests that an augmentation of the defence budget beyond the 1% cap in the short term will be unlikely.
The Need for Change
Nonetheless, the need for Japan to spend a greater proportion of its GDP on its self-defence forces is only going to increase in the coming years, and more consistent spending over the 1% level is likely to occur in the medium to long term. As nearby nations like China and Russia pump funds into the development of cutting-edge weaponry like hypersonic missiles, the importance for Japan of enhancing its missile defence system and developing its own long range missile capability to help restore the regional military balance will become increasingly important. Raising defence spending could also go a long way towards helping rectify weaknesses in Japan’s defences, such as the neglected area of cyber security.
In conclusion, despite appeals by LDP members, it seems unlikely that Japan’s defence spending will undergo a dramatic increase in the next year or so owing to the Suga government’s poor approval ratings and the more pressing concerns surrounding Japan’s COVID-19 response. However, the proposal by the LDP panel and the aforementioned statements about exceeding Japan’s informal defence spending cap hint at a greater consciousness within the Japanese government – the imperative to invest more into the military. Consequently, it is quite likely that in the medium to long term, Japan will take a stance which places greater emphasis on spending to deal with the country’s defensive vulnerabilities.
