Geopolitical tensions are rising across Japan, which is why it has begun increasing its defense spending. According to early reports, he wants to finance this through increased taxes, he wrote in his summary World economy.
Because of the weak yen, the island nation may fall in love with fewer assets. The budget so far stands at approximately 43 trillion yen, which has had to be reduced by 30% in recent years. Two years ago, they came up with a plan to increase. At that time, they calculated a budget of $400 billion, but due to the weakness of the currency, its value became only $272 billion.
Procurement costs rose
- For example, the F-35A fighter jet costs 14 billion yen apiece, which was only 11.6 billion in 2018.
- The cost of a warship using the Aegis system is 392 billion yen, or just 240 billion yen in 2020.
- They also manufacture defense equipment in the island nation, which has increased by 35 percent compared to the original budget, to 95 billion yen.
Currently, the goal is to increase the budget to 2% of GDP.
Why is this necessary?
According to Japan
- There is a dispute with Russia. Tokyo wants to obtain the Kuril Islands, which Moscow does not recognize.
- With South Korea, the issue of the Liancourt Cliffs is causing ongoing conflict.
- However, the most intense dispute is with China over the Senkaku Islands. The Asian country considers the uninhabited archipelago under Japanese rule a part of it. Incidentally, Taiwan also claims the place.
Villajazdasaj points out that all of this will be financed by Japan through increased taxes or new taxes. According to the newspaper, if the population is burdened, this will not be a smart decision, as there will be elections in more than a year.
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