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Defense Budget

On December 17, 2013 Japan announced a large defense build-up and national security strategy aimed at countering China's increasingly assertive claims on disputed territory. The plan calls for increased air and maritime capabilities. The Abe government announced a major increase in military spending of 5 percent over the next five years, which included purchases of 28 US F-35s and two Aegis-equipped destroyers. The five-year budget earmarks more than $230 billion for fighter jets, combat and amphibious vehicles, as well as surveillance drones and early warning aircraft.

In January 2013 it was reported that newly elected Prime Minister Shinzo Abe was planning to create new guidelines for Japan's defense program. Abe decided to increase defense spending to at least 4.77 trillion ($54.3 billion). Japenese defense spending peaked in fiscal 2002 at 4.96 trillion yen when Junichiro Koizumi was Prime Minister, and the number dropped thereafter, to the initial budget for fiscal 2012 of 4.71 trillion.

Abe was expected to scrap the mid-term defense buildup program under the current guidelines endorsed by the former government in December 2010. The Defense Ministry would submit a request to increase the defense budget by more than 100 billion yen, or about 1.14 billion dollars, for fiscal 2013. Some of the money will be used to increase surveillance of the Senkaku Islands and the surrounding waters in the East China Sea. Chinese government ships have repeatedly intruded into the waters. The Abe cabinet was also expected to increase the number of SDF personnel and purchase new equipment.

Defense-related expenditures include spending for maintaining and managing the SDF, improving living conditions in the neighborhoods of defense facilities, and supporting U.S. forces in Japan. In FY2013, defense-related expenditures, which had been declining continuously since FY2003, were increased in real terms for the first time in 11 years, in order to reinforce preparedness aimed at protecting the lives and property of the populace and the nations land, sea, and airspace, in light of the increasingly harsh security environment.

Generally speaking, JSDF expenditure on weaponry acquisition in 2012 maintained the level of the previous year. It also followed the general trend of the recent years, emphasizing the development of naval and air weapons systems. According to Japans National Defense 2012,the JSDF spent 756.5 billion yen on weapons and systems acquisition, 3% less than that in FY 2011, and accounting for 16% of national defense budget. Among it, ship building cost 172.8 billion yen, which is a rather significant increase from last year, indicating Japans intention to strengthen its maritime power. Aircraft purchase cost 136 billion yen. In FY 2012, the JSDF spent 102.7 billion yen on equipment R&D, 1% higher than that of last year.

According to Japanese security policy, maintaining a military establishment is only one method -- and by no means the best method -- to achieve national security. Diplomacy, economic aid and development, and a close relationship with the United States under the terms of the 1960 security treaty are all considered more important. Japan is keeping military expenditure at only 1% of GDP, even though this is still a very significant amount. Japan's posture is a defensive one, with no weapons of mass destruction, no long-range bombers, no middle or long-range missiles, no aircraft carriers and no nuclear submarines. But Japan has considerable conventional weapons, and wants to use its Self-Defence Forces for peacekeeping operations. Japan is however very concerned over the military build-up in East Asia.

The Defense Agency requested 4.933 trillion yen for its fiscal 2005 budget to update the Self-Defense Forces. This amounted to US$44.693 billion at the exchange rate [1 USD = 110.375 JPY] prevailing in late 2003. On 24 December 2006, the Cabinet passed a $41.75 billion spending plan for fiscal year 2007, which begins in April 2007. This was down $106.96 million, some 0.3 percent, from 2006.

The Defense Agency's overall budget request for the fiscal year beginning 01 April 2004 amounts to 4.96 trillion yen, up 0.7 percent from the initial budget for fiscal 2003. This amounts to US$45.324 billion at the exchange rate [1 USD = 109.433 JPY ] prevailing in late 2003.

Defense-related expenditures for FY2002 totaled 4.9395 trillion yen (excluding costs for SACO), a 0.6 billion yen or almost zero percent increase over the previous fiscal year, indicating that defense-related expenditures are still moderate. The FY2002 budget includes 16.5 billion yen for SACO-related expenses. Including these expenses, total defense-related expenditures are 4.9560 trillion yen, which is almost the same amount as for the previous fiscal year.

Even in the 1980s, defense spending was accorded a relatively low priority. For FY 1986 through FY 1990, defense's share of the general budget was around 6.5 percent, compared with approximately 28 percent for the United States. In 1987 Japan ranked sixth in the world in total defense expenditures behind the Soviet Union, the United States, France, the Federal Republic of Germany (West Germany), and Britain. By 1989 it ranked third after the United States and the Soviet Union, mainly because of the increased value of the yen. In FY 1991, defense accounted for 6.2 percent of the budget.

In addition to annual budgets, the Defense Agency prepared a series of cabinet-approved buildup plans beginning in 1957, which set goals for specific task capabilities and established procurement targets to achieve them. Under the first three plans (for 1958-60, 1962-66, and 1967-71), funding priorities were set to establish the ability to counter limited aggression. Economic difficulties following the 1973 oil crisis, however, caused major problems in achieving the Fourth Defense Buildup Plan (1972-76), and forced funding to be cut, raising questions about the basic concepts underlying defense policies.

In 1976 the government recognized that substantial increases in spending, personnel, and bases would be virtually impossible. Instead, a "standard defense concept" was suggested, one stressing qualitative improvements in the SDF, rather than quantitative ones. It was decided that defense spending would focus on achieving a basic level of defense as set forth in the 1976 National Defense Program Outline. Thereafter, the government ceased to offer buildup plans that alarmed the public by their seemingly open-ended nature and switched to reliance on single fiscal year formulas that offered explicit, attainable goals.

Defense spending increased slightly during the late 1970s, and in the 1980s only the defense and Official Development Assistance budgets were allowed to increase in real terms. In 1985 the Defense Agency developed the Mid-Term Defense Estimate objectives for FY 1986 through FY 1990, to improve SDF front-line equipment and upgrade logistic support systems. For the GSDF, these measures included the purchase of advanced weapons and equipment to improve antitank, artillery, ground-to-sea firepower, and mobile capabilities. For the MSDF, the focus was on upgrading antisubmarine capabilities, with the purchase of new destroyer escorts equipped with the Aegis system and SH-60J antisubmarine helicopters, and on improving antimine warfare and air defense systems. ASDF funds were concentrated on the purchase of fighter aircraft and rescue helicopters. The entire cost of the Mid-Term Defense Estimate for FY 1986 through FY 1990 was projected at approximately 18.4 trillion (approximately US$83.2 billion, at the 1985 exchange rate).

In FY 1989, the 3.9 trillion defense budget accounted for 6.49 percent of the total budget, or 1.006 percent of GNP. In addition to the Defense Agency itself, the defense budget supported the Defense Facilities Administration Agency and the Security Council. Defense Agency funding covered the GSDF, the MSDF, the ASDF, the internal bureaus, the Joint Staff Council, the National Defense Academy, the National Defense Medical College, the National Institute for Defense Studies, the Technical Research and Development Institute, and the Central Procurement Office.

The FY 1990 defense budget, at 0.997 percent of the forecasted GNP, dipped below the 1 percent level for the first time since it was reached in 1987. But the more than 4.1 trillion budget still marked a 6.1 percent increase over the FY 1989 defense budget and provided virtually all of the 104 billion requested for research and development, including substantial funds for guided-missile and communications technologies. Although some 34.6 billion was authorized over several years for joint Japan-United States research and development of the experimental FSX fighter aircraft, disputes over this project were believed to have convinced the Defense Agency to strengthen the capability of the domestic arms industry and increase its share of SDF contracts. After originally being cut, funds were also restored for thirty advanced model tanks and the last Aegis multiple-targeting-equipped destroyer escort needed to complete the Mid-Term Defense Estimate. The 6.1 percent defense increase was accompanied by an even larger (8.2 percent) increase in Official Development Assistance funding. The defense budget continued to grow in real terms in the early 1990s to 43.8 trillion in 1991 and 45.5 trillion in 1992 but remained less than 1 percent of GNP.

Japanese officials resist United States pressure to agree formally that Japan will support more of the cost of maintaining United States troops, claiming that such a move will require revision of agreements between the two nations. But in FY 1989, the Japanese government contributed US$2.4 billion -- roughly 40 percent -- of the total cost. The contribution slated for FY 1990 was increased to US$2.8 billion -- nearly 10 percent of the total defense budget -- and by the end of FY 1990 the Japanese government expected to assume all expenses for utilities and building maintenance costs for United States troops stationed in Japan.

According to some estimates, the unit costs of Japanese vehicles are three to ten times as expensive as those of the US vehicles. Similar price gaps exist between Japan and England, France, Germany and other European nations. It is believed that Russian equipment cost 30% less than equivalent US equipment. Given such huge discrepancies, Japan's defense spending in reality is at about the same level with those of South Korea and Taiwan.

Government's Draft Budget for Aerospace Adopted

The Government's draft budget for 2006 was adopted during the Cabinet meeting of 24 December 2005.

Classification Model Number of Aircraft Government Budget
Ground Self-Defense Forces Combat helicopter AH-64D 1 30,892
Observation helicopter OH-1 2
Multi purpose helicopter UH-60JA 1
Multi purpose helicopter UH-1J 4
Transport helicopter CH-47JA 1
Maritime Self-Defense Forces Patrol helicopter SH-60K 3 26,584
Basic training plane T-5 1
Improvement of electronics inteligence aircraft(EP-3) (1)
Air Self-Defense Forces Fighters (F-15)Modernization and Improvement (2) 119,547
Fighters F-2 5
Transport helicopter CH-47J 1
Search-and-rescue plane U-125A 1
Rescue helicopters UH-60J 2
Basic training planes T-7 3
Improvement of early-warning aircraft(E-2C) (0.5)
Enhancement of radar functions of AWACS(E-767) (4)
Total 25 177,023

Numbers in brackets ( ) are not included in total number of aircrafts.




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