With US$52 billion defense expenditure, Japan shrugs off COVID-19 impact to focus on China threat and local industry instead, says Mathew George, PhD, Aerospace, Defense and Security Analyst at GlobalData.
“Japan is not changing approach towards its defense spending despite COVID-19’s impact as part of strategy to counter China’s military growth with longer range missiles, helicopter carriers and its future fighter programs.
“These defense programs have allowed for steady investments into the economy and provided for some job security even during the pandemic, a feature of the defense industry that is expected to remain in the immediate future.
“Earlier in 2020, GlobalData estimated that Japan could grow its defense budget to US$48.4 billion or focus on austerity and reduce spending to US$44.2 billion.
“However, it seems that with the changing geo-political realities and realignment on how to continue economic activity, the government has decided to push for economic growth, develop its industrial base, expand technological know-how in defense and grow its defense budget with a respectable 6.5% growth in defense spending, including SACO-related expenses, U.S. Forces realignment-related expenses, etc.
“However, Japan needs to align its needs to protect itself from increasingly complex military scenarios and domestic economic requirements. It also cannot risk falling behind the curve if it does not develop the next technologies that need to defend itself; and with a maturity in production and technology, the possibility to export these capabilities.
“With the effects of COVID-19 and a resurgence of the importance of diversifying supply chains, Japan’s increasing defense budget is not just a short-term move, it is a medium to long-term focus that seeks to build an effective force with minimal man-power, with cutting edge of technology and thereby drive growth locally.”