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Expert: Discuss sources of revenue for increasing defense budget

The following is a commentary by Keio University Professor Mori Satoru, as told to Abe Shinji.


During the Upper House election campaign, voters apparently paid attention to the issue of defense spending and the debate on the global situation following Russia’s invasion of Ukraine, but it’s hard say there was a lively debate on these issues. I hope that discussions will deepen as the government examines the contents of the three documents, including the National Security Strategy, to be revised by the end of 2022.


It is highly commendable that Prime Minister Kishida Fumio attended the North Atlantic Treaty Organization (NATO) summit held in Madrid during the election campaign. Kishida said during the summit that “the security of Europe and the security of the Indo-Pacific are inseparable,” and that “East Asia may be the Ukraine of tomorrow.” It is very significant for the global community that Kishida called attention to and showed a posture of being actively involved in cross-regional security issues.


There are two main issues on the diplomacy and security fronts. The first one is related to enhancing deterrence in defense.


The Liberal Democratic Party (LDP) has formulated a proposal to increase the defense budget within five years that refers to NATO’s defense budget of at least 2% of the gross domestic product (GDP). The proposal is significant because it symbolizes Japan’s willingness to play a role in security.


There are various budget items that should be increased, such as reinforcing the protection of SDF facilities, securing ammunition, acquiring “counterattack capabilities,” research and development of advanced defense capabilities, and training and securing personnel.


What is most important is securing the financial resources and explaining the increase to the people. Will the budget increase be covered by a tax increase, government bonds, or cuts in other parts of the government budget? Will it be a combination of these? The government and ruling parties need to present various options and explain the increases, including why they decided on those options.


Although missile defense is necessary, the response system limited to intercepting missiles has reached its limits. Japan’s possession of the ability to counterattack, combined with other capabilities and cooperation with the United States, will strengthen deterrence against China.


Former Prime Minister Abe Shinzo took the lead in enhancing Japan’s defense capabilities. Other countries will think that “Japan’s diplomatic and security policies without Abe will stagnate” if the Japanese government does not implement its goals and policies. We need to produce visible results so they will not think such things.


The second issue is diplomacy, which requires the use of various means to build relationships with the countries in the region toward the realization of a “Free and Open Indo-Pacific.” The Indo-Pacific Economic Framework (IPEF), the new U.S.-led economic zone concept, does not have a good reputation as it is perceived as a desperate measure by the United States following its withdrawal from the Trans-Pacific Partnership (TPP). It is better to have it than not, however. Participating countries should enhance their cooperative relationships in practical areas such as facilitation of trade including information technology, infrastructure (social capital) development, decarbonization, and clean energy.


It is important to create an environment in which regional countries are not only dependent on China. Japan should take the initiative in making concrete proposals by utilizing the “Quad” framework and IPEF toward the realization of an global order based on rules rather than force.


The Biden administration takes a conspicuous stance of emphasizing democracy and frameworks made up of major powers such as the Quad and AUKUS. The challenge for the United States will be to build sustainable and stable cooperative relationships with Southeast Asian countries and Pacific island nations.


Japan should develop nuanced bilateral regional diplomacy that is attentive to the needs of other countries based on the achievements of its diplomacy in Asia and the trust based on such achievements.

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