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Staff writer

With the gap in fiscal health widening between Japan and the United States, Tokyo is reconsidering one of it’s sacred budgetary cows: support for U.S. military forces in Japan.

The Finance Ministry recently suggested reviewing spending in support of the 42,000 American service members in Japan as part of the process of compiling the fiscal 2000 budget. The move marked the first official second-guessing since Japan first opened its wallet two decades ago.

The ministry says it doesn’t intend to damage the Japan-U.S. security treaty, nor is it demanding an outright budget cut. Still, its suggestion should affect not only next year’s budget, but the expected renewal in 2001 of the bilateral accord on host-nation support, which has made Japan the world’s most generous host of U.S. forces. “We stress that the U.S. forces in Japan are essential to keep the security treaty effective,” a ministry official said. “We just want to encourage them to cut down on expenses.”

The support budget has covered a wide range of expenses, from Japanese employees’ salaries to construction of golf courses.

Host-nation support began in 1978, when the U.S. was having difficulty paying the salaries of Japanese workers at its bases. Washington had a worsening fiscal balance back home, and the dollar was weakening against the yen.

The special expenditure came to be known as the “sympathy budget” after remarks made by Shin Kanemaru, then director general of the Defense Agency. He said the budget was based on “sympathy” for U.S. troops, apparently on the idea that Japan was indebted to the U.S. for national defense.

Spending climbed steadily until 1995. In the current fiscal year, the government plans to spend 275.6 billion yen, up 8.6 percent from fiscal 1998. But in 1998, spending fell for the first time, by 7.3 percent, apparently reflecting the austerity policy Tokyo was following at the time.

The support budget has been the prime funding source for the facilities occupied by U.S. military forces in Japan, according to Hiromichi Umebayashi, a Yokohama-based international coordinator for the Pacific Campaign for Disarmament and Security.

The U.S. defense budget has been tightened since the end of the Cold War, said Umebayashi, author of “U.S. Forces in Japan Revealed Under the Privacy Act.”

Host-nation support covers four areas: personnel; facilities improvement; fuel, lighting and water; and relocation of military-exercise zones.

More than 50 percent of funding is used to cover the salaries and other allowances of some 25,000 local employees.

A third goes toward improving facilities, such as building and repairing barracks, houses, hospitals, schools, roads, shops and leisure centers.

With the current five-year bilateral agreement on host-nation support set to expire in March 2001, the Foreign Ministry is expected to begin renewal negotiations soon.

Meanwhile, in the ongoing budget compilation, the Finance Ministry is trying to define the types of projects that should be funded by Japan. Otherwise, the ministry official hypothesized, the U.S. may widen the scope of requests infinitely and even demand equipment that directly serves military purposes.

The ministry also wants to check long-term facilities-
improvement plans. So far, ministry officials have examined U.S. requests only on a single-year basis. “To maintain public support for the security treaty, they should spend money in a manner convincing to the people,” the official said.

A backdrop to the Finance Ministry’s tougher stance is the contrasting economic situations in the two countries: Japan has been mired in economic troubles in recent years while the U.S. economy is booming.

In 1998, Japan’s central and local governments had a fiscal deficit equivalent to 8.5 percent of gross domestic product. In the same year, the U.S. turned from deficit to surplus of 0.4 percent of GDP. The gap is expected to expand in 1999.

The Defense Facilities Administration Agency, which takes U.S. requests and submits them to the Finance Ministry, has recently been approving only a “minimum level,” according to the agency’s press officer.

On a contract basis, support spending slipped on a year-on-year basis in fiscal 1998 and 1999, and the requested budget for fiscal 2000 is also down 1.8 percent from the previous year. The contract-based figures may indicate a declining trend in budgetary expenditures.

The U.S. military in Japan expected Tokyo to review host-nation support in preparation for upcoming bilateral negotiations and welcomes the review, a U.S. forces official said.

“We expect the (Japanese government) to recognize the strategic value of host-nation support and continue to support U.S. forces stationed in Japan,” the official added.

Disarmament advocate Umebayashi admitted the need to clarify the scope of host-nation support, saying it has expanded “without brakes.”

But he also voiced concern that the Finance Ministry’s stance, despite its objective, may lead to creation of a separate budget bracket for host-nation support.

At present, host-nation support is allocated under the defense budget and accounts for 6 percent of it. A rise in the support budget thus limits spending on the Self-Defense Forces. But making a separate budget bracket could remove that constraint, he said.

“While it would increase transparency, it would also enable more stable support for U.S. forces,” he warned.

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