The Defense Ministry will seek a budget of over ¥5.4 trillion for fiscal 2021 — another record — government sources said Monday, as Prime Minister Yoshihide Suga vowed to continue with his predecessor’s policy of bolstering Japan’s capabilities in new domains.
The seventh consecutive year of all-time high requests compares with the ¥5.31 trillion sought in the ministry’s initial budget for the year ending in March. The plan comes amid growing concerns about the country’s fiscal health, the worst among major economies, with over ¥1.1 quadrillion worth of public debt. In fiscal 2020, the new government debt issuance is set to exceed ¥90 trillion to a record high in response to a coronavirus pandemic.
“The Defense Ministry’s request for another modest increase in defense spending reflects the changing understanding of the security challenges Japan is facing and the tools it wishes to acquire to mitigate these challenges,” said Stephen Nagy, a senior associate professor at International Christian University in Tokyo.
Suga — Japan’s first prime minister in nearly eight years — took office on Wednesday to succeed Shinzo Abe, who stepped down for health reasons, pledging to continue his policies including those on national security and diplomacy.
The ministry will make a budget request by the end of September that will include funding for a specialized electronic warfare unit as part of efforts initiated under Abe to strengthen capabilities in “new spheres” including cyberspace and outer space in a veiled counter to China and Russia, the sources said.
These attempts to strengthen capabilities in new domains “are seen as the critical areas that need to be developed to counter China’s military modernization, which has been designed to overcome the U.S.’s qualitative and quantitative superiority,” Nagy said.
“Seen from this perspective, Japan and other U.S. allies are investing in capabilities to protect themselves from and also neutralize China’s growing capabilities but also to be able to defend against the growth … of missile systems that North Korea has been developing.”
The new unit of the Ground Self-Defense Force, to be headquartered at its Asaka base straddling Tokyo and Saitama Prefecture, is designed to block enemy attacks by using electromagnetic waves that could disrupt radios, jam GPS and paralyze units.
The government will also seek funds to develop fighter jets to succeed the Air Self-Defense Force’s aging F-2s, which are expected to begin retiring in fiscal 2035, the sources said.
The ministry is expected to sign a contract with Mitsubishi Heavy Industries Ltd. as a main developer of the future fighters, and it has also been considering cooperation from U.S. or British companies, according to the sources.
Nagy said the budget request also reflects a “broader understanding” in Japan “that kinetic conflicts of the future will be won not on the battlefield but in outer space, cyberspace and the electromagnetic spectrum.”
Nagy also noted that in the context of other regional players, Japan’s defense budget increases have been comparatively insignificant compared with its neighbors. He pointed to South Korea’s proposed 6.1 percent increase per year from 2021-2025, Taiwan’s 10.2 percent hike next year and China’s 6.6 percent rise this year.
It will not be clear in the budget request how much the ministry will demand for the alternative to the land-based, U.S.-developed Aegis Ashore missile defense units that Abe had pushed with the aim of protecting the country from North Korean threats, before deciding to scrap them in June, according to the sources.
Japan is considering a substitute plan, as it has told the United States that building specialized ships to counter ballistic missiles would be the most viable option to replace the Aegis plan, which was ditched due to technical and cost issues, according to the sources.
Among other alternatives under discussion are the introduction of an interception system and simply building more Aegis destroyers equipped with missile interceptors, they said.
The government is expected to propose an alternative to replace the Aegis plan by the end of the year. If the policy for the alternative proposal is set, the government may seek additional funds in the next fiscal year in addition to a budget of more than ¥5.4 trillion, sources said.
The majority of the defense budget is for the implementation of the midterm defense buildup program and includes the costs for the realignment of U.S. bases in Japan. Reflecting the expanded purchases of state-of-the-art U.S defense equipment such as F-35 fighter jets, the defense budget has been increasing year after year.
Due to the coronavirus pandemic, the Ministry of Finance delayed the deadline for fiscal 2021 budget requests from each ministry and government agency by one month to the end of September.