by 岡崎久彦 on 2003年8月18日
National debate is going on over whether Japan should put priority on structural reform or economic stimulus.
The dispute is nothing new as it has been repeated since the days of Prime Minister Ryutaro Hashimoto’s administration. The difference would be several trillion yen at most, with Japan stuck with an annual budget deficit of some 30 trillion either way.
While it can afford to do so, Japan should consider spending its money in a more effective way that would be remembered by later generations. Japan should revise its budget policy, since it suffers from an extreme shortage of outlays for defense and intelligence.
This is the essence of an article I wrote in May on Japan’s fiscal affairs. Many critics have raised questions on how to rectify the state of the disproportionately small defense budget at present.
There is no need to strain to increase expenditures; Japan should do so at its own pace. Defense technology is fast progressing and keeping pace is far from easy. At the cutting edge of defense technology is missile defense, which is important not only to guard against North Korea’s military threat but also to prevent Japan from falling behind in technology.
Politically, missile defense is the focal issue in Japan-U.S. defense cooperation, given the U.S. defense authorities’ efforts to prevent the proliferation of weapons of mass destruction and their delivery systems.
Japan will have to cooperate, in some way, with the United States in missile defense. It will need to spend at least 200 billion to 300 billion in the next several years on urgently needed minimum systems and 700 billion to 800 billion on comprehensive systems. To appropriate such spending, the traditional pattern of seeking to cut expenditures on other defense spending should be avoided. Thus the proportion of defense spending in the total budget would increase.
To understand the significance of this issue, it is necessary to recognize the extent of distortions in national defense caused by the past application of the 1 percent cap on defense spending in relation to gross national product.
When Japan launched its Self-Defense Forces, the ratio of its defense spending to GNP was more than 2 percent. Amid Japan’s long-standing pacifism, the ratio was reduced to 1 percent to accommodate rises in public works, welfare and environment-related spending.
The defense budget, essential to cope with unexpected emergencies, should naturally be cut in peacetime. However, there are common-sense limits to spending cuts. Most nations in the world are unable to reduce their defense spending to less than 2 percent of their GNP. However ingenious the method, Japan would have serious difficulties if it cut the defense budget-to-GNP ratio to 1 percent.
Limited defense spending has caused a serious shortage of ammunition for the SDF. The SDF will need a certain number of fighter planes, considering the balance with neighboring countries. Given a choice between aircraft and missiles, the SDF would choose the former. In an emergency, it may be possible to ask the U.S. for help in obtaining ammunition, but it would have difficulty in getting aircraft. It would be somewhat like asking a freshman college student whether he or she preferred money for tuition or for textbooks. A student would need both, but setting a limit on spending would lead to this absurdity.
More serious would be a cut in equipment-maintenance and training costs that might be necessitated by outlays on new equipment. A cut in maintenance costs would affect equipment performance in an emergency. A reduction in training costs would affect the traditional high standard of performance skill of the SDF.
The present SDF is extremely deficient in room for adjustment; no more spending cuts are possible. A spending increase would only force the hard-pressed SDF to work harder and improve efficiency, instead of making it easier for concerned personnel as at other government agencies.
What is needed is needed. There have been calls for Japan to join the ranks of “normal nations” in terms of national defense. Before that, it needs a minimum level of spending to prevent it from falling below normal.
I am not saying that defense spending should be increased at a stretch. Japan should appropriate necessary expenditures for missile defense, for defense against possible attacks from North Korea, for maintenance of strength in its critically important defense alliance with the U.S. and for promotion of its technical development. In doing so, Japan should simply avoid illogical cuts in outlays on other defense items.