Japan’s Defense Ministry is seeking a record budget for the next fiscal year as the pacifist country is set to have some of the highest military spending in the world, with questions remaining as to how the government will finance the surge.
(Bloomberg) — Japan’s Defense Ministry is seeking a record budget for the next fiscal year as the pacifist country is set to have some of the highest military spending in the world, with questions remaining as to how the government will finance the surge.
The ministry said Thursday it’s seeking ¥7.7 trillion ($52.6 billion) for the fiscal year beginning in April 2024, up 13% from the previous year. The amount would be nearly on par with military spending in France and Germany, based on 2022 figures provided by the Stockholm International Peace Research Institute.
Japan’s military spending could eventually leapfrog all of its Group of Seven peers except the US after Prime Minister Fumio Kishida pledged last year to increase defense spending by about 60% over the next five years.
Russia’s full-scale invasion of Ukraine, North Korea’s new array of missiles designed to strike Japan, and China’s assertiveness in the region have prompted Tokyo to ratchet up spending.
The money is set to be used for items such as stockpiling missiles that are capable of striking military assets in Russia, China and North Korea — three neighbors armed with about half of the world’s nuclear weapons and which maintain some of the largest armed forces of any country.
The proposal encompasses a number of items, such as ¥755 billion to boost counterstrike capabilities. That includes funding for the development of missiles that can be fired from Japanese territory to reach targets several hundred kilometers away.
Japan, which has a war-renouncing constitution, is investing heavily to expand its capacity for long-distance strikes. It previously announced spending of more than ¥200 billion to buy about 400 of Raytheon Technologies Corp.’s Tomahawk cruise missiles. It also plans to upgrade its Type 12 anti-ship missile — developed domestically by Mitsubishi Heavy Industries — to reach all of North Korea, as well as nearby Chinese and Russian naval bases. The current version has a range of about 200 kilometers.
The ministry is also looking to make supply chains for military products more robust with an allocation of about ¥97.8 billion. It plans to financially support companies that contribute to supply chain resilience, streamlined manufacturing processes, and improved cybersecurity to ensure the stable procurement of defense equipment.
Opinion polls show concern about the possibility tax hikes will be used to pay for the increased military spending. While factors including higher-than-expected tax incomes have left Japan with a higher budget surplus that could be used, the government has also said tax hikes can’t be avoided in the long run.
Japanese lawmakers are now weighing sales of government stakes in some of the nation’s biggest companies, including Nippon Telegraph and Telephone Corporation, as an option to fund defense.
–With assistance from Isabel Reynolds.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.