China is rapidly building up its military, and the dominance of the U.S. armed forces in the Western Pacific is being shaken. North Korea’s nuclear weapons and missiles are also an imminent threat. It is only natural that Japan should improve its own response capabilities.
The House of Representatives has begun deliberations on two bills aimed at strengthening Japan’s defense capabilities. One is to establish a special measures law to secure financial resources to pay for the increase in defense spending, and the other is to establish a law to support the nation’s defense industry by strengthening the industry’s production base.
Last year, the government decided that spending on defense will total about ¥43 trillion over the five years from fiscal 2023. The figure is more than 50% higher than the size of the current defense spending plan. It is understandable that the rigid defense budget should be reviewed in light of the worsening security environment.
The bill to secure financial resources aims to use nontax revenues, such as surpluses from special accounts, to cover the increase in defense spending. The government intends to set aside ¥4.6 trillion in nontax revenues through legislation and other means, and allocate the revenue over the five-year period.
The government cannot rely solely on the issuance of government bonds to finance defense expenditures, which are a permanent expense. It is reasonable for the government to utilize the surpluses in the special accounts and other funds.
Meanwhile, the main pillar of the bill to enhance the production base of the defense industry is that the government will provide funds for companies to, for example, improve the manufacturing process of defense equipment.
The defense industry has low profitability because sales are limited to one client — the Self-Defense Forces — and companies have been withdrawing from the business one after another. If the SDF depend on overseas suppliers for the procurement of equipment, they will not be able to smoothly obtain such equipment in the event of a contingency, and their ability to sustain organized fighting will deteriorate. The government must rebuild the defense industry.
At the same time, to strengthen the production base it certainly is also necessary to take measures to support the defense industry’s business by helping expand overseas sales channels for parts for equipment and other products.
In 1967, Japan established the Three Principles on Arms Exports to prohibit the export of defense equipment to the communist bloc. In 1976, exports of defense equipment were, in effect, totally banned.
In 2014, Japan finally established the Three Principles on Transfer of Defense Equipment and Technology, which opened the way for exports in the five areas of rescue, transportation, vigilance, surveillance and minesweeping, but exports have not been successful, in part because they do not meet the needs of other countries.
Japan’s security cannot be ensured if the defense industry is weakened by old-fashioned ways of thinking. Japan should explore approaches to expand exports of equipment while maintaining the principle of a pacifist nation.
According to an opinion survey conducted by the Cabinet Office last year, 42% of respondents said that the scale of the Self-Defense Forces should be “increased.” Although the survey method was different, this was 12 percentage points higher than the results of a previous similar survey in 2018. It can be said that the public is taking the worsening security environment seriously.
The ruling and opposition parties must engage in deliberating the bills in a calm and constructive manner by taking such public opinion into account.