The inauguration of U.S. President Donald Trump has sparked debate on whether Japan should increase its defense spending.
Japan has kept its defense outlays at about 1 percent of the country's gross domestic product (GDP). However, the ruling Liberal Democratic Party (LDP) could intensify its calls for an increase in such spending if President Trump, who calls on U.S. allies to increase their financial burdens associated with U.S. forces stationed in their territories, were to demand Tokyo expand its security role.
A tug-of-war will likely intensify between the LDP and the fiscal authority over the issue as the government is scheduled to draw up the next mid-term defense program (fiscal 2019-2023) in late 2018.
In 1976, the Cabinet of then Prime Minister Takeo Miki decided to keep Japan's defense spending at 1 percent of Japan's gross national product or below to prevent Japan from becoming a major military power. The ceiling was removed in fiscal 1987 under the administration of then Prime Minister Yasuhiro Nakasone and replaced by a system under which the total amount of defense outlays is limited in the mid-term defense program.
Nevertheless, Japan's defense outlays have been kept at around 1 percent of GDP, considering the country's fiscal squeeze.
The current mid-term defense program from fiscal 2014 to 2018 sets defense spending at around 24.67 trillion yen over that period. The Cabinet of Prime Minister Shinzo Abe has increased that spending in the initial budget -- excluding costs associated with reorganizing U.S. forces in Japan and other expenses -- by 0.8 percent a year, and is allocating 4.9 trillion yen from the fiscal 2017 budget draft for defense. Still, defense spending has remained less than 1 percent of Japan's GDP -- 0.955 percent in fiscal 2015, 0.937 percent in 2016 and 0.885 percent in 2017.
NATO requires its member countries to aim to spend at least 2 percent of their GDP on defense. However, the ratio remains at 1.9 percent in Britain and 1.8 percent in France, well below the 3.4 percent in the United States. As such, U.S. President Trump has criticized allies for failing to shoulder sufficient costs associated with stationing the U.S. military.
The Institute for International Policy Studies, headed by former Prime Minister Nakasone, insisted in a report it released in January that Tokyo should aim to spend 1.2 percent of its GDP on defense.
PHP Research Institute, Inc. also recommended last month that Japan should increase its defense outlays rather than sharing more costs of U.S. forces stationed in Japan, which Trump demanded during his election campaign.
Regarding the Japan-U.S. alliance, Prime Minister Abe told a House of Councillors plenary session on Jan. 25 that Japan should try to steadily boost its defense capabilities. "Based on the recognition that the core of the security policy is self-help efforts, Japan should build up its defenses and expand the role it can play," he said.
The LDP's Research Commission on Security is poised to launch a study session on how to beef up Japan's defense capabilities with an eye to working out the next mid-term defense program.
Opinions are prevalent within the Defense Ministry that an annual 0.8 percent increase in defense spending is insufficient for responding to changes in the security environment surrounding Japan. There are also observations that the prices of defense equipment, such as state-of-the-art F-35 fighters, could rise under the Trump administration. These views suggest that officials hope that Japan can take advantage of pressure from the United States -- in addition to the threat posed by China and North Korea -- to increase its defense spending.
However, the Abe government has maintained its goal of moving the primary balance of national and local government finances into the black by fiscal 2020. If only defense spending is sharply increased, it could stir protests from opposition parties as well as the general public.