Tokyo (Reuters) – A draft of Japan’s economic policy that was seen by Reuters shows that the country wants to “dramatically strengthen” its military. This is because officials are worried that Russia’s invasion of Ukraine could cause instability in East Asia.
On Monday, when he met with U.S. President Joe Biden, Prime Minister Fumio Kishida promised to “substantially increase” Japan’s defense budget.
The draft is an annual update of a long-term economic plan. It doesn’t give details about spending, but it does say for the first time: “There have been attempts to change the status quo in East Asia by force, which is making regional security worse.”
It also doesn’t say what kinds of security threats are in the area, but Japan’s military planners have said many times that they are worried about China and North Korea, with whom Japan has a long-running territorial dispute.
The president’s statement that the U.S. would be willing to use force to protect Taiwan from Chinese aggression took up most of Kishida’s news conference with Biden.
The draft document says, “We will greatly improve our defense capabilities, which will be the best way to ensure national security.”
The Nippon Television Network said that on Thursday, former prime minister Shinzo Abe called for defense spending of nearly 7 trillion yen ($60 billion) for the next fiscal year. This is up from the initial budget of 5.4 trillion yen for this year and is in response to China’s growing military spending and North Korea’s missile threats.
Abe, who still has a lot of power as head of the largest faction of the ruling Liberal Democratic Party, was quoted as saying, “It’s natural for the government to spend 2 percent of GDP on defense.”
Kishida hasn’t said how much he wants to increase spending on the military for the fiscal year that starts in April 2023.
Spending more on defense will make Japan’s already bad public finances even worse.
Takuya Hoshino, a senior economist at Dai-ichi Life Research Institute, said, “There will always be pressure to spend.”
On Friday, the lower house of parliament approved an extra budget of 2.7 trillion yen, paid for by selling bonds, to help households and businesses deal with rising costs of fuel and raw materials. Next week, the upper house is likely to pass the budget into law.
Since Kishida has a national election in July, Hoshino said that another supplementary budget was “almost a sure thing.” “The question is how to get money without having to rely on the Bank of Japan’s extremely low–interest rates.”
($1 = 126.9800 yen)
