Tiểu luận tài chính công military budget of japan

Military budget of Japan Overall of public finance of Japan 1.1 Assessment of public finance of Japan from 2012-2017 Looking at the current economic situation, some bright signs can be seen in the Japanese economy From the viewpoint of developing this trend of economic recovery into sustained economic growth driven by the private sector, it is important to implement comprehensive policy measures such as revitalization of the economy, establishment of sustainable public finance which would not pass the current burden on to the future generation, and so on From 2012, the budget of Japan aimed to realize both economic revitalization and fiscal consolidation with the combination of the economic stimulus package, FY2011 supplementary budget, and FY2012 tax reform (The Government aims to halve the primary deficit of the central and local governments to GDP ratio (-4.3%) by FY2012 from the ratio in FY2010 (-6.6%)) They did it through the period of the next years but with the different capital for each fields In general, the main subjects are : Enhancing medical and long-term cares ⇒ Enhancing social security by utilizing revenues from consumption tax increase: AG total trillion yen in FY2012, increase by almost 800 billion yen in FY2016 Moreover, they focused on realizing “a society in which all citizens are dynamically engaged”, enhancing childcare support and providing nursing services directly linked to the “Desirable birthrate of 1.8” and “No one forced to leave their jobs for nursing care” and also reducing the burden of education costs In 2017, there are things which they want to improve such as raising wages for childcare and longterm nursery workers; expand capacity of childcare facilities, so as to reduce the number of children on the waiting list; shorten the minimum eligible period for receiving pension from 25 to 10 years; lengthen the eligible period for maternity leave benefits; reduce the employment insurance payments; and introduce a new government-sponsored scholarship Promoting measures for disaster prevention and reduction as well as for aging infrastructure Accelerating reconstruction from the Great East Japan Earthquake and revitalization of Fukushima in the FY2015 and 2016 Rebuild and improve the living standard of the citizen Along with the restruction, Japanese government not only promoted measures for disaster prevention and mitigation as well as for maintenance of aging infrastructure, but also improved the quality of education and reinforcing scientific and technological capabilities In 2015, securing the same level of expenditures for public works as that of FY2014 (5971.1 billion yen (+0.0％)) Promoting the measures for disaster prevention and reduction as well as for the aging infrastructure Strengthening international competitiveness through developing effective logistics network systems Construction of new Shinkansen lines will be decided ahead of the planed schedule while constraining the increase in the government’s expenditure In the next year, securing public works related expenditure (5,973.7 billion yen (％0.0％)) at the same level compared with previous fiscal year, while enhancing measures for disaster prevention and mitigation as well as maintenance of aging infrastructure in a planned manner In addition, facilitating logistics networks which provoke private investments and activate the economy And the last one that Japan focused on is military From 2012 to 2017, the capital which they used for increasing budget for national defense to steadily enhance defense capability increased from 41 billions to 43 billions dollars In 2015, The Japan’s Government focus on enhancing patrol and monitoring ability and reinforcing the defense for islands through establishing the coastal monitoring system And with the increase of budget on military, In 2016, they strengthened the defense system along with the “Medium Term Defense Program.” Promoting the projects regarding US military realignment in order to reduce the burden on Okinawa 1.2 Japanese Public finance facts in 2017 Out of the total expenditure, the sizes of social security expenditure and national debt services have increased in recent years, while the proportion of other policy expenses (public works, education and science, and national defense, etc.) has decreased during the same period National debt services, local allocation tax grants, and social security expenditures now account for more than 70% of the total expenditure Chart In the FY2017 budget, tax revenue (general account) is estimated to be around 58 trillion yen Tax and other revenues, which should, under normal circumstances, fully finance the government expenditure in a given year, account for about two-thirds of the revenue only As a result, the remaining one-third relies on debt financing (i.e., revenue generated by issuing government bonds), which constitute a burden for future generations Chart The outstanding amount of Japan’s government bonds has increased year after year, reaching ¥865 trillion at end FY2017 (projected), which is 15 times as large as the annual tax revenue This accumulated debt will impose heavy burden on future generations Chart Japan’s gorvernment has to deal with some Problems of Fiscal Deficit: Fall in the level of public services If the national debt service cost increases, other expenditure items would be squeezed, lowering the level of public services that are essential for people’s lives, such as social security, education, national defense, and infrastructure development Moreover, the government would have difficulties in fulfilling its obligation to carry out its fiscal functions, even in the event of a disaster or an economic crisis Increase in fiscal deficit and debt outstanding Inter-generational inequality If the current generation resorts to debt-financing for receiving their social security benefits (e.g., pensions for elderly people and medical and long-term care), the burden of debt repayment would be passed to future generations Consequently, these future generations would need to pay back a huge amount of debt, thus suffering from reduction in benefit and increase in burden with regard to the social security If the current imbalance between benefits and contributions remains unchanged, Japan’s universal health care and pension coverage, which is one of the best in the world, cannot be sustained till the next generation Loss of private sector’s economic viability If confidence in public finance is lost and consequently government bonds are downgraded, bank and other corporate bonds would be also downgraded, resulting in a rise in the cost of corporate bond financing If the government continues to absorb private funds by issuing deficit-financing bonds, funds necessary for enhancing growth would not be channeled to the private sector, hurting private sector’s economic viability Increase in interest rates due to the deterioration of confidence in public finance If an increase of the outstanding stock of debt leads to deterioration of confidence in public finance, interest rates would rise drastically, thereby having an adverse impact on the economy For example, financial institutions, which hold large amount of government bonds, would incur losses in the value of their assets As a result, financial system would become unstable Moreover, government bond investors would leave the market, making it difficult for the government to raise funds Military budget of Japan 2.1 Reality In recent time, Japan Ministry of Defense has continuously proposed to raise the military expenditures to the recorded amount for five years in a row After the long term fall in military spending, it was noted that Japan has become increasingly sophisticated and self-sufficient military power The military’s shopping list includes drones, surveillance aircraft, F-35 stealth fighters, submarine and money for land to build a new military base on a remote island It was also stated that this was no longer an era when Japan is permitted to nothing and count on America to protect them According to the awareness of the serious nearby Japan security environment, they decided to invest in the latest US-developed ballistic missile interceptors for its shipbased Aegis missile defense system and also poured money into upgraded groundbased ballistic missile interceptors 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-Defense Forces for peacekeeping operations Japan is however very concerned over the military build-up in East Asia 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 nation’s land, sea, and airspace, in light of the increasingly harsh security environment Generally speaking, JSDF (Japan self defense force) 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 Japan’s 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 Japan’s 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 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) Japanese 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 On December 17, 2013 Japan announced a large defense buildup 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 percent over the next five years, which included purchases of 28 US F-35s and two Aegisequipped 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 The country's military seeks to boost fighting capabilities amid an increased Chinese presence in the South China Sea and an aggressive North Korean ballistic missile development program Proposed upgrades reportedly include the development of two unmanned aerial vehicles The first will be a surveillance-only device, and will not see completion for some ten years A second drone program will feature an unmanned fighter jet, and will also be developed over the next ten years Chart 4: Military expenditure of Japan (% of government expenditure) Source: Worldbank.org Chart 5: Military expenditure (current LCU) of Japan Sour ce: Worldbank.org The budget also details plans to buy an additional submarine and new fighter aircraft, and to put close to 1,300 soldiers from the Self-Defense Force, Japan’s military, on the southern islands of Kagoshima and Okinawa These locations are closer to the Senkaku, the chain of islands where both China and Japan claim territorial rights Despite Japan’s longstanding postwar pacifism, initially imposed by a Constitution that was largely written by American occupiers, the country has long argued that the Constitution does not prevent it from maintaining defensive equipment and troops But the definition of what is needed to defend the country has evolved as Japan confronts new dangers Throughout the 1990s and early 2000s, government assessments of security in the region led to a decrease in defense budgets every year Yet five years ago, the government began increasing its budget again as new provocations emerged from China and North Korea The budget deliberations come as Mr Abe’s government is reconsidering the country’s pacifist stance Mr Abe has long expressed his interest in revising the clause in the Constitution that says the country must “forever renounce war,” and he helped push through new security laws last year that permit Japan’s troops to participate in overseas combat missions A majority of the Japanese public generally opposes amending the pacifist Constitution; protesters mounted large demonstrations against the security bills last year Yet some Japanese consider the gradual buildup of military firepower necessary for their protection Japan’s defense budget proposal includes funds to help proceed with development, in conjunction with the United States, of advanced antiballistic missiles that can be launched from ships and that have much longer ranges than previous incarnations 2.2 Why has Japan used a lot of budget for military? Mr.Takashi Kawakami, the specialist about security at Takushoku stated that: “Security environment surrounding Japan is being damaged seriously due to activities of China and North Korea” Actually, Japan has expanded missile defenses that would test the nation’s commitment to pacifism and escalate a regional arms race with China and North Korea And this country also wanted to develop and potentially purchase new antiballistic missiles that can be launched from ships or land, and to upgrade and extend the range of the country’s current land-based missile defense systems, a significant expansion of Japan’s missile defense capabilities Many specialists worrried about security of Japan “We’re in the middle of what is commonly called the security dilemma,” said Richard Samuels, a Japan specialist and the director of the Center for International Studies at the Massachusetts Institute of Technology “When one nation does something which it believes to be defensive and in its own interests, its competitor will see it as threatening and see it as offensive, and then you get this arms race and security dilemma,” he said “That’s very much in play here.” In one segment described as a demonstration of how troops would respond to an attack on unspecified islands, soldiers dropped from Chinook helicopters and tanks rolled across a muddy field In 2012, JSDF (Japan Self Defense Force) expenditure on weaponry acquisition in 2012 maintained the level of the previous year, which revealed Japan’s intention to strengthen its maritime power 2.2.1 Threats from China Itsunori Onodera, Japan’s defence minister said that the purchases of weapons triggered no alarms They were merely about “maintenance” of Japan’s defence But they are still vigilant over China Much of the defence build-up is aimed at deterring an attack on Japan’s far-flung south-east, site of a tense standoff with China over the Senkaku islands (known in China, which claims them, as the Diaoyu) Japan’s latest defence white paper again cites “dangerous activities” by Chinese ships and aircraft, which have staged a string of incursions into the seas around the islands in a high-risk bid to force Japan to the negotiating table The defence ministry also wants to build up an amphibious assault force (by 2019), modeled on the US Marines, to take remote territory from enemy hands “This is no longer an era when Japan is permitted to nothing and count on America to protect us It’s become extremely important we our own share alongside the US,” he said Shigeru Ishiba, secretary general of the Liberal Democratic Party, has long held similar views: “China’s defence spending will continue its double-digit growth, enhancing its relative strength and reducing America’s power.” The planet’s second largest economy has become an increasingly sophisticated and self-sufficient military power, says Narushige Michishita, a security specialist in Tokyo More military spending may not be enough to check this development, he says “We may have to come up with the Asian version of NATO; loosely defined, loosely networked…and excluding China.” The military activities of China surrounding Japan has been increasing more and more Especially, in August 2017, the first time long-range bombers of China flew over Miyako strait, which is in southern polar of Japan, having made Japanese defensive soldiers take action urgently American navy also appointed Frigate battleship to near Tsushima island, which is in the south of Japan Keeping track of military activities of China surrounding Japan has usually occurred Therefore, Japan wants to improve their defensive system in this situation when the security environment is occurring very complicatedly Japan will also spend a part of their budget to strengthen the ability of defensive force of the coast of this country in the south of Miyakojima and Amami Oshima archipelago to cope with tense escalated activities of China in East China Sea As for the Chinese, their vessels have repeatedly sailed into disputed waters surrounding a group of uninhabited Japanese-controlled islands in the East China Sea, known as the Senkaku to Japan and the Diaoyu to China In June 2016, China sent a warship within 24 nautical miles of the islands; Mr Abe responded by putting the Japanese Navy and coast guard on alert Experts said these missiles could be used not only to shoot down North Korean missiles, but also to deter China from invading the disputed islands Placing more troops on the southern islands of Japan is also intended to deter China from moving closer to the Senkaku All of this increasing military budget of Japan was to response to China's rising military power projection in the region This country also aimed at countering China's increasingly assertive claims on disputed territory The plan calls for increased air and maritime capabilities In 2013, some of the money was 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 2.2.2 Threats from North Korea Besides China, Japan increased military budget as this country worried about acitvities of North Korea Japan saw that the dangers emerging from North Korea has been increasing more and more The Ministry of Defence suggested the highest level of military budget after days since missiles of North Korea flew over Japanese territory and dropped in Pacific This was the first time since 1998, missiles of North Korea flew over Japan There have been rising threats from North Korea’s nuclear and ballistic missile program into waters surrounding a string of islands in Japan In the past several years, North Korea’s behavior—repeated missile launches, four tests of nuclear devices, and its alleged sinking of a South Korean warship and artillery attack on Yeonpyeong island in 2010—have spurred Japanese leaders to pursue more robust missile defense cooperation with the United States Japanese territory is well within the range of North Korean Nodong ballistic missiles, which are potentially capable of delivering a nuclear warhead Many experts expect that Japan would be a target of North Korean missile attacks in a major crisis situation Pyongyang’s provocations have also driven Tokyo to increase military budget North Korea continues to develop its nuclear capabilities and test-fire ballistic missiles that land ever closer to Japan In August 2016, North Korea launched a missile from a submarine off its east coast that flew 310 miles toward Japan, much farther than in previous attempts By extending the range of some antiballistic missile systems, the Japanese would be better equipped to shoot down missiles launched by Pyongyang Therefore, Japanese government wants to enhance their defensive abilities to face with missile ballistic threats of North Korea, including deploying missile shield system Aegis which is placed on the coast to complete the system Specifically, Ministry of Defence of Japan expects to use 47,2 billion yen (427 million USD) to buy SM-3 Block 2A - a system intercepting missile and use 20,5 billion yen (185 million USD) to upgrade PAC-3 MSE – a missile defensive system About 10,7 billion yen (97 million USD) is expected to use to upgrade the radar network which is used to be against missile of Japan (JADGE) Ministry of Defence also stated that this upgrading plan is to improve reacting abililies of Tokyo towards missile attacks which occur suddenly in bulk Simultaneously, the Ministry is also building the plan with the aim to deploy the units of Ground Self-Defense Forces (GSDF) to protect far islands 2.3 Different views about increasing military budget of Japan 2.3.1 Negative views Tooru Miyamoto, a Communist Party member of the House of Representatives, said he did not approve of the increased expenditures at a time when the economy continues to stagnate “I want such money to be spent on day care centers,” he said Those who value Japan’s pacifism said they were concerned about the expanded military role “In these times, I am a little bit worried,” said Toru Matsuzaki, 71, a woodworker, representing the citizen voice He referred to a generation of “heiwa boke,” people who innocently take peace for granted “Realistically, it may be necessary to increase the budget,” he said, “but I don’t like it.” 2.3.2 Positive views Analysts said nothing in the new budget request suggested that Japan would cross the line from a primarily defensive stance to a more offensive one The new equipment proposals also seem carefully calibrated to address current threats The plan to extend the range of existing PAC-3 missile defense systems from the current limit of about 19 miles, for example, would help Japan protect against North Korean missiles but avoid the appearance of instigating new confrontations, analysts said Some analysts noted that with China rapidly increasing its military budget, Japan’s current military spending might not be sufficient “In the long run, if the military balance in East Asia shifts in favor of China significantly, we might have to much more than what we are doing right now,” said Narushige Michishita, director of the Security and International Studies Program at the National Graduate Institute for Policy Studies in Tokyo Measures to improve the efficiency of the spending on national defense 3.1 Entering the international arms market Weapon systems are becoming more sophisticated, making acquisition costs higher and development terms longer It is hard for most countries to develop highend weapons systems like fighter jets by themselves, except for a few countries such as United States and Russia Therefore, Japan has relaxed its self-imposed policy banning arms exports in order to join international cooperative development projects The Japanese defense industry has been able to sell its products to foreign customers under the new policy In the past all military sales have effectively been banned, although there has been technology transfer to the US.The new conditions would allow Japan to jointly develop arms with allies and give its defence industry access to new markets and technology The move is likely to be viewed with suspicion in China, which has accused Japan of increasing militarism Japan adopted a pacifist constitution after World War Two which prohibits going to war except in cases of self-defence It has for decades observed the "three principles" of not exporting arms to countries that are communist, subject to UN arms embargos and involved or likely to be involved in international conflicts These principles were adopted in 1967 and later evolved into a full self-imposed ban But Japanese Prime Minister Shinzo Abe is keen to bolster national security and also normalise some of the restrictions Japan placed on itself after World War Two Under the policy, the restrictions on exports to countries involved in conflicts or subject to UN embargos would remain Exports will be allowed in cases where they contributed to global peace and served Japan's security interests, Kyodo news agency reported Japan would impose strict screening on exports and would be transparent about the process, it said Japan would also not allow its exports to be sold on to third parties "Under the new principles, we have made the procedure for transfer of defence equipment more transparent," said Chief Cabinet Secretary Yoshihide Suga "That will contribute to peace and international co-operation from the standpoint of proactive pacifism." "And we will participate in joint development and production of defence equipment," he added 3.2 Improvement in the transparency of equipment procurement Defense procurement is unique in that many defense equipment not have market prices; hence it is necessary to decrease procurement costs and improve companies’ incentives to reduce cost at the same time Japan will improve the cost-efficiency of equipment procurement by making thorough efforts to curb the lifecycle costs of equipment, including the acquisition cost, and through improving the overall contract system and further adopting efficient procurement systems such as short-term lump-sum purchases Japan will also enhance transparency over procurement by strengthening the external audit system Governments must deliver public services within a sustainable financial framework Since revenue is rarely sufficient to meet demand, public money must be managed carefully to ensure sustainability for the medium- and long-term Therefore, robust public financial management systems are essential at all stages of the budget cycle – from formulation to execution, including procurement, financial management and control, and internal audit Furthermore, the existence of an independent and efficient Supreme Audit Institution to exercise professional scrutiny of the executive’s management of public funds is a crucial feature of any democratic financial accountability system The requirements of a sound public financial management system can be summarised as follows: • A strong and well-organised ministry of finance equipped with the necessary administrative capacity and supported by a legal framework that allows it to exercise its role • Cost-effective public internal financial control systems, incorporating financial management and control and internal audit, across the entire public administration • An independent and professional Supreme Audit Institution supported by a legal framework which allows for high-quality audits that impact on public sector functioning Public procurement (including public/private partnerships and concessions) is an integral part of an effective public administration and public financial management, as it is one of the key means by which public money is spent in order to provide public services Good public procurement requires: • A regulatory framework that contains policies and procedures to guide the work of contracting authorities and helps ensure economy, efficiency, transparency, accountability and access to justice in public procurement • Institutional structures, operational capacities and market conditions needed for the effective implementation of the regulatory framework • Sound and efficient public procurement operations which deliver value for money 3.3 Procurement of equipment, etc and services using long-term contracts [Expected reduction: approx ¥67.7 billion] Pursue the reduction of procurement cost and stable acquisition by making use of long-term contracts of five fiscal years or longer • Bulk acquisition of ASDF transport helicopters (CH-47JA) under longterm contract (procured over fiscal years) (Expected reduction: approx ¥7.6 billion (14.3%)) • Modification intended to enable the installation and operation of PAC3MSE missiles by using a long-term contract (procured over fiscal years) (Expected reduction: approx ¥57.7 billion (30.5%)) The above figure includes the reduction of ¥24.7 billion, including non-recurring costs, expected to be achieved through the use of civilian goods and review of specifications, in addition to the reduction expected to be achieved through a longterm contract • Long-term contract of Performance Based Logistics (PBL) in order to improve operational availability and ensure timely and adequate parts supply posture, etc Transport aircraft (C-130R) (procured over fiscal years) (Expected reduction: approx ¥2.4 billion (16.5%)) 3.4 Review maintenance methods [Expected reduction: 59.3 billion] Streamline maintenance costs by extending periodic maintenance intervals ○ Acquisition of engines of CH-47JA through the modification of existing engines and maintenance (Expected reduction for 12 engines: approx ¥3.5billion) ... years Chart 4: Military expenditure of Japan (% of government expenditure) Source: Worldbank.org Chart 5: Military expenditure (current LCU) of Japan Sour ce: Worldbank.org The budget also details... southern islands of Japan is also intended to deter China from moving closer to the Senkaku All of this increasing military budget of Japan was to response to China's rising military power projection... near Tsushima island, which is in the south of Japan Keeping track of military activities of China surrounding Japan has usually occurred Therefore, Japan wants to improve their defensive system