Weak yen upsets Japan's defence plans as spending gulf with China widens

Experts say rise in defence budget ideal, but may be political suicide for unpopular govt

- Walter Sim

TOKYO The persistent weak yen is severely upsetting Japan's historic defence spending plans, raising doubts over its ability to beef up security amid perceived regional threats.

This is all the more stark when pitted against China, whose military spending is larger by an order of magnitude.

Japan intends to spend 7.9 trillion yen (S$71.5 billion) on defence in fiscal 2024, under a budget that was passed by Parliament's Lower Chamber on March 9 and is now before the Upper House. This marks a 16.6 per cent hike from 2023, and accounts for about 7 per cent of overall expenditures of 112.7 trillion yen.

Meanwhile, China, on March 5, announced defence spending of 1.67 trillion yuan (S$313 billion) for 2024, with defence outlays increasing by over 7 per cent for the third straight year. The security budget takes up a whopping 40 per cent of the overall government budget of 4.15 trillion yuan.

The gulf becomes even wider when considering that Japan includes research and development within its defence budget, but not China, Dr Satoru Nagao of the Hudson Institute think-tank noted.

Still, Japan's considerable budget increase is part of a defence spending plan that earmarked 43 trillion yen over a five-year period ending in 2027.

By that year, Japan should allocate 2 per cent of its gross domestic product to defence spending, up from about 1.2 per cent today.

Yet there is mounting debate over whether the 43 trillion yen is enough.

Mr Sadayuki Sakakibara, the former chairman of the Keidanren business lobby group, said at a Defence Ministry expert panel meeting in February that discussions over raising the figure should not be taboo.