Japan sets defence spending target at 2% of GDP for first time

WORLD  30 November 2022 - 03:04

Prime Minister Fumio Kishida has instructed his Defence and finance chiefs to boost Defence spending to 2 per cent of gross domestic product by 2027 — a target long sought by the ruling party but now referred to by Kishida as a specific budget figure for the first time.

Kishida outlined his orders to Defence Minister Yasukazu Hamada and Finance Minister Shunichi Suzuki to secure the necessary funds in a meeting late Monday at the Prime Minister’s Office in Tokyo, Hamada said, adding that Kishida had also stressed that the defence budget “needs to be urgently boosted within five years,” The Japan Times reported on November 29.

"Instead of saying we can’t do so due to the lack of financial resources, we need to come up with ways to secure the necessary funds swiftly,” Hamada noted.

Suzuki said he would “continue to discuss” the matter with Hamada.

Japan has long maintained an informal cap on defence spending of around 1 per cent of GDP, with the fiscal 2022 defence budget coming in at ¥5.4 trillion ($47 billion), excluding supplementary funding. The Defence Ministry is seeking ¥5.59 trillion in spending for the next fiscal year, a figure that is highly likely to balloon as unspecified projects get price tags.

To reach the 2 per cent target — a move that would put Japan on par with NATO’s defence spending standard — the Defence Ministry has said roughly ¥48 trillion will need to be allocated over the next five years.

Kishida has repeatedly reiterated his pledge to “fundamentally reinforce” the country’s defence capabilities amid an “increasingly severe security environment,” but had not set out a specific budget target until Monday evening.

But with his support rate having faltered in recent months, Kishida will also have to take into account the heavily indebted nation’s tight coffers, especially amid the current economic climate.

An expert panel advising Kishida has called for spending reforms and a broad-based source of tax revenue to cover the defence costs, though it did not recommend specific measures. The head of the ruling Liberal Democratic Party's tax panel, however, has said that raising corporate and household income taxes in the next fiscal year cannot be ruled out.

On Tuesday, LDP lawmakers with an intraparty security panel welcomed the 2 per cent of GDP announcement but were critical of the expert panel's tax increase recommendation, calling discussions of a hike "abrupt," media reports said.

Calls for bolstered defence spending have grown amid the rapid pace of China’s military modernization and its recent moves near Taiwan, as well as nuclear-armed North Korea’s unprecedented flurry of missile launches this year.

The LDP, which is headed by Kishida, has pushed for the 2 per cent of GDP target. It has also urged the government to acquire a so-called counterstrike capability, which would allow it to target enemy bases and command-and-control nodes in the event Japan is attacked. Such a move would be a major shift for the pacifist country’s defence -oriented policies.

Supporters of acquiring the capability say it would allow Japan to better deter its increasingly assertive neighbors in China and North Korea. The expert panel that advised the government on bolstering the country's defence s submitted a proposal to Kishida last week recommending that Japan acquire the counterstrike capability.

According to a poll published Sunday by Kyodo News, more than 60 per cent of respondents said they backed Japan acquiring the capability, while 35 per cent were opposed.

Speaking in parliament on Tuesday, Kishida hinted that building up the capability, in addition to improving missile defence s, would send a message to those that threaten Japan.

“The basic idea (behind acquiring a counterstrike capability) is to enhance deterrence and further reduce the possibility of missile attacks,” he said.

Kishida’s administration has also pledged to update Japan’s National Security Strategy, as well as two other security documents that will cement its defence policy for years to come. The budget hike and counterstrike proposal are expected to be included in those documents.

Ultimately, the shape of the next defence budget and security documents will depend on whether Kishida has the political capital to secure public understanding for such measures and move them forward, though a poll released last month by NHK found that 55 per cent of those surveyed were in favor of a defence spending hike, while 29 per cent were opposed.

Caliber.Az