The tension in Japan’s heightened defense ambitions

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Japan is about to make two big decisions: how far it can expand its defense capabilities and where to find the money to pay for it. The belligerent region that Japan inhabits needs more resources devoted to national security, regardless of the ambivalence voters have historically felt toward a more assertive military.

Prime Minister Fumio Kishida must reconcile competing strategic, electoral and budgetary priorities. In his favor are significant changes in Japan’s domestic politics. Issues related to defense and diplomacy, which were no-go zones a generation ago, are now freely discussed by politicians. The late Shinzo Abe was as much a reflection of the transformation as its driver.

Is the economy ready for a high defense bill and how does the nation bolster its armed services with a shrinking population? I spoke with Sheila A. Smith, senior fellow for Asia-Pacific studies at the Council on Foreign Relations and author of several books on Japanese diplomacy and politics. The conversation has been edited for clarity and length.

Daniel Moss: How has Japan’s strategic position changed over the past two decades? Was Abe causing this or just channeling it?

Sheila A. Smith: He was always a warmonger and wanted Japan to be more self-sufficient. There are several pieces that came together during his tenure. One was the rise of China, which represents a very significant shift in the balance of power. Japan’s complex relationship with its own past is incorporated, as well as the differences in the political systems of the two countries. Japan therefore had to rethink its approach. It must also face a more assertive Russia and North Korea.

Abe is often described as a right winger. I’m not sure that’s the right way to understand it. He was on the conservative side of interpreting Japan’s post-war experience, deeply uncomfortable with the US-drafted constitution, and did not believe that Japan should always apologize. From 2012 until his resignation in 2020, you saw a man who accepted his aspiration to lead and, above all, a Japan faced with a changing world. There was an intersection.

DM: How has the ruling Liberal Democratic Party changed? Centre-right parties have generally become more right-wing and nationalistic.

SS: The conservative right in many democracies has also become populist, less established. This is the difference with the LDP. The party has become more conservative in recent years without embracing the populist side. You see now, after Abe, quite a few people in the LDP who want a stronger military, want to raise defense spending to 2% of gross domestic product. They do not support nuclear weapons, but want to be able to reach out and hit an adversary with conventional weapons as a deterrent.

These views were very right wing. Not anymore. You have a generational change, an LDP leadership that is much more assertive in elevating what was taboo. It reflects a region where everyone demonstrates military capabilities and prompts the question of whether self-control is the best way for Japan to protect itself.

DM: I still meet people who think that Japan doesn’t have a military to speak of and that everything has been outsourced to the United States. In essence, how big is Japan in the defense industry?

SS: Traditionally, Japanese leaders did not view the global defense industry as a place for Japanese companies to play. There were restrictions passed in the 1950s that stated that Japan should not sell weapons. Abe opened this. During the Abe era, they were encouraged and urged to participate in the arms market. Could they be significant? We will see. For Japanese industrial companies, defense is only a small part of their operations. But now they are expected to be out there showing what they can do. I don’t think the leaders fully agree. They feel there are a lot of reputational risks associated with their brand being too associated with the military.

More broadly, it is not true that Japan has delegated everything to the United States. Credible estimates of defense spending and investment tend to show that Japan, depending on the movement of the yen, is consistently in the top 10. Not so different from, say, France or the United Kingdom. United. Japan is pretty much the same as NATO allies.

DM: The government has started a complete review of Japan’s defense strategy. Why is this important and what are the likely outcomes?

SS: A new national security strategy document is going to be released. The first leader to be released was Shinzo Abe, in 2013. So this will only be Japan’s second statement, ever. It’s important that everything is in one place, not just bombs and bullets. It’s about what Japan should do to achieve its interests in the world and how to do it? In 2013, the language about China was pretty benign compared to what I think we’ll see in the next one. Russia will be top of mind after the invasion of Ukraine. North Korea continues to be a problem, given its missiles and ability to launch them undetected.

There will also be a cabinet decision in December on the next ten-year defense plan. This is where we will see how serious Kishida is when it comes to defense. Under the 10-year plan, there will be a 5-year plan on how much Japan spends and on what. The other issue that needs to be handled skillfully is that of counterattack capability.

DM: Japan is one of the most indebted economies. How is all this funded?

SS: I don’t know how they pay for it. Debt service is somewhere around 23% of Japan’s budget. Social Security is about a third. The budget does not have much latitude. I’m not convinced about 2% of GDP, but let’s use that as a benchmark. Last year, Japan spent about 1.3% of its GDP on defence. You get to 2%, you basically double it. It’s big.

Kishida may step back a number and instead speak of substantial expenditure over a period of time. We will have to watch his maneuvers. It should show that expenses are increasing in a demonstrable way. He promised Joe Biden. So where does it come from? It is a zero sum. It’s not like the Japanese economy is about to really take off.

DM: Article 9 of the Japanese constitution renounces war as a sovereign right and a means of settling disputes. He also says that to achieve this goal, the forces will not be maintained. Is the constitution misunderstood?

SS: People have this idea that Article 9 means Japan can’t do anything, which is not correct. There must be some sort of self-defense. How much is needed? It’s the political elasticity and where Abe has tried to push the boundaries. If we read the parliamentary proceedings from the early 1950s, when Japan was creating the self-defense force, they never used the word nuclear, but they talk about modern weapons, which was code for nuclear. They are not prohibited, if necessary for self-defense. This is where interpretations come in.

That aside, there is an extremely sensitive antennae among the Japanese public that pay close attention when weapon systems are discussed. Even in the conventional strike debate, the public reaction is going to be very interesting. Some people may say that China has missiles, North Korea has missiles and Russia has missiles, so we need them too. But there will be many people who will say that it takes us far beyond where we are prepared to go and increases the risk of war. We should not reject the balancing act required here.

DM: Japan has enormous demographic challenges. How to reconcile a declining population and a limited appetite for immigration with a strengthening of the army?

SS: There’s the tax burden of an aging population, which takes us back to the tug and pulls the budget. Pension reform in the name of increased military spending is a tough sell. So you’ll see more automation, you’ll see more focus on women serving. You are just beginning to see women in leadership positions. There will be more robotics. This is where the opening up to the international arms market will occur, the use of Japan’s technological capacity to achieve economies of scale. The focus will be much more on combat drones, underwater drones, surveillance and reconnaissance. There are recruitment issues. Great challenges, demographically. This has implications for how quickly Japan can deploy.

More from Bloomberg Opinion:

• Kishida must fulfill Abe’s big unfulfilled dream: Gearoid Reidy

• Abe’s great political legacy is starting to look worn: Daniel Moss

• Abe’s greatest legacy is military, not economic: James Stavridis

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously, he was Bloomberg News’ economics editor.

More stories like this are available at bloomberg.com/opinion

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