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Japan’s defense spending has been rising in recent years amid China’s increased maritime assertiveness and the growing threat of North Korea’s nuclear weapons and ballistic missile development. The ¥97.7 trillion government budget for fiscal 2018 earmarked a record ¥5.19 trillion for defense, a 1.3 percent rise from the current year for the sixth year-on-year increase in a row. A supplementary budget for fiscal 2017 adopted by Prime Minister Shinzo Abe’s Cabinet late last month along with the fiscal 2018 annual budget featured ¥234.5 billion in extra defense-related spending.

Measures need to be taken to cope with the changing security environment surrounding Japan. Amid the nation’s tight fiscal conditions, however, defense spending must still be controlled and prioritized. Close scrutiny should be made on the cost of spending for new items versus their effectiveness in defending the nation — which also needs to be considered in Japan’s broader diplomatic strategy as well as division of roles with the United States under the bilateral security alliance. Such scrutiny will be all the more important as pressure builds for further increases in defense expenditures in coming years.

Upon tapping Itsunori Onodera as defense minister in a Cabinet reshuffle in August, Abe instructed him to review the National Defense Program Guidelines adopted in 2013 to set the course for a defense buildup in the coming decade. Recently, the prime minister said his government, in the review to begin in full early next year, would determine “what defense capabilities we should truly have in order to protect our people, rather than simply expanding traditional ones.” While a ceiling was placed on defense spending for fiscal 2018 under the Medium-term Defense Program covering the five years from 2014, the ceiling on expenditures is expected to be raised further in the next five-year program beginning in fiscal 2019 under the new guideline.

The fiscal 2018 defense budget features more spending to beef up Japan’s missile defense system in the face of rapid progress in North Korea’s missile capabilities. The North fired two intermediate-range ballistic missile over Japan this summer and is believed to have developed an intercontinental ballistic missile capable of reaching the United States mainland. In addition to the current two-layer missile defense system consisting of PAC-3 surface-to-air interceptors and the sea-based Standard Missile-3 deployed on the Maritime Self-Defense Force’s Aegis vessels, the government has approved the installation of two land-based Aegis Ashore systems — likely to be deployed in Akita and Yamagata prefectures.

A total of ¥3.5 billion was earmarked in the 2017 extra budget and the 2018 annual budget for introduction of the U.S.-made Aegis Ashore systems, which are scheduled to become operational in fiscal 2023. Defense officials explain that the two Aegis Ashore systems will be able to cover the Japanese archipelago from Hokkaido to Okinawa and, together with the Aegis combat system on the MSDF ships, will add to the nation’s missile interception capability. Since no missile defense system can be perfect in shooting down enemy missiles, how far the new system will enhance Japan’s capability to defend against possible North Korean missiles will be unknown. Each of the Aegis Ashore systems is projected to cost about ¥100 billion — an increase from an estimate of ¥80 billion given by Onodera in November. The cost may rise further depending on the performance of such components as radar.

The introduction of such pricey U.S.-built defense equipment and systems comes just as procurement of weaponry from the United States under the U.S. government’s Foreign Military Sales (FMS) program — under which the contract terms such as price and delivery date will be set by the U.S. — is rising sharply. The amount of FMS contract procurement in the fiscal 2018 budget will rise ¥50 billion to ¥410 billion.

U.S. President Donald Trump, in a joint news conference with Abe during his visit to Tokyo in November, said that “the prime minister of Japan is going to be purchasing massive amounts of military equipment, as he should” and went on to claim that Japan’s purchases of U.S.-made military gear would lead to “a lot of jobs for us (the U.S.) and a lot of safety for Japan.” Abe agreed that Japan “will be buying more from the United States.”

Whether the installation of more U.S.-made defense equipment will indeed enhance Japan’s national security, it would be a problem if such pressure from the U.S. is going to influence Japan’s defense spending programs in the years head.

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