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HOME  > Past issues  > 2022 June 22 - 28  > Finance Ministry: \11.2 trillion arms spending may weaken Japanese economy
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2022 June 22 - 28 TOP3 [POLITICS]

Finance Ministry: \11.2 trillion arms spending may weaken Japanese economy

June 28, 2022

The Liberal Democratic Party, the Komei Party, the "Nippon Ishin no Kai" party, and the Democratic Party for the People in their campaign pledges for the House of Councilors election are calling for a major boost in the country's military spending. Meanwhile, the Ministry of Finance is concerned about the impact on the economy with a major arms buildup.

According to materials presented to a subcommittee of the Fiscal System Council on April 20, Japan's military spending in fiscal 2022 exceeds 5.4 trillion yen, up 515.7 billion yen from 4.9 trillion yen in fiscal 2014.

The ministry explained that it managed to secure additional financial resources "by cutting back on other expenses". The categories that faced cutbacks included subsidies for small- and medium-sized enterprises, energy measures, and related-expenditures for a stable supply of food.

Japan's military budget is already large, compared to other countries. Based on a NATO definition, the ministry calculated Japan's total military expenditures, including payments on the military-service pension and the budget for the Japan Coast Guard. The results revealed that Japan uses 61.4 billion dollars (6.9 trillion yen or 1.24% of GDP), compared to 57.1 billion dollars in France and 32.7 billion dollars in Italy. Among G7 countries, Japan ranks as fourth largest military spender.

The LDP states it will increase the country's arms spending to more than 2% of GDP within five years. The Finance Ministry's data show that 11.2 trillion yen will be necessary to have Japan's military spending expand to 2% of GDP.

Regarding how to raise the financial resources needed for what the LDP calls for, Prime Minister Kishida Fumio has kept avoiding giving any explanations. However, former PM Abe Shinzo and the "Ishin" party are proposing that Japan issue government bonds which are in reality pubic debts.

The ministry expressed concern over the issuance of national bonds to cover the increase in military spending. According to the ministry's data, Japan was in debt for 149.8 billion yen in military spending during WWII (1937-1945), which brought about hyperinflation after the war.

The ministry warns that a boost in military spending without adequate financial prospects "may make Japan vulnerable as a result".

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