Japanese defense budget increased, despite general austerity

Japan has decided to increase military spending by 7.6 percent in fiscal 1981 -- but only after some furious in-house squabbles. It is the biggest annual increase since World War II, though it is still short of the 9.7 percent hike the United States has been pushing for in recent months.

But Joji Omura, director general of the Defense Agency, says the budget for fiscal 1981, finalized Dec. 29, will have enough money for the most important military hardware. The new budget will also enable Japan to achieve its 1980-84 medium-term military buildup a year early, as the US has been demanding.

Government sources say Washington really has little cause for complaint, even if the increase was smaller than desired.

They point out that for the first time since World War II, Japan will spend more on defense than on welfare.

The final figure, which still leaves some people unhappy, was not achieved without a threat for revolt within government ranks.

The government draft budget called for the 9.7 percent increase the Carter administration wanted (the incoming Reagan administration is expected to continue, if not intensify, pressure for more Japanese defense spending).

But penny-pinching Finance Ministry bureaucrats cut the allocation to a 6.6 percent increase.

That set off a week of tough negotiations, with the Defense Agency, the Foreign Ministry, and hawks within the ruling Liberal Democratic Party all demanding full reinstatement of the cut funds.

Facing a possible revolt within party ranks, Prime Minister Zenko Suzuki lent his support to the compromise figure that was finally accepted by all sides, albeit reluctantly.

As a result, defense spending in fiscal 1981 (beginning April 1) will reach 2 .4 trillion yen (some $12 billion).

the hawkish lobby was able to squeeze an extra $115 million out of the Finance Ministry . Government sources said this would enable the Defense Agency to make down payments on an additional 4,500-ton missile destroyer, a 2,900-ton escort ship, two C-130 transport planes from the United States, and four E-2C early warning radar planes. Also included will be down payments for some domestically produced, short-range surface-to-air missiles, whose quality is still a subject of controversy in parliament.

Other major expenditures planned in the 1981 budget include 72 tanks, a number of large self-propelled mortars and guns, extra antisumbmarine helicopters, advanced Hawk surface-to-air missiles, and the construction of a planned "central command" for joint US-Japanese operations.

The United States has been urging Japan, in particular, to improve its antisubmarine patrol capability to secure its vital sea lanes, increase its naval power in general, and strengthen its overall air defense and its mining capability.

Government sources say the final budget allocation goes a long way toward meeting US priorities.

Japan's ambassador to the US, Yoshio Okawara, has been instructed to tell the outgoing and incoming Washington administrations that the Tokyo government has done its best to meet US expectations, the sources added.

Foreign Minister Masayoshi Ito told reporters Dec. 29 that because of Japan's mu tual defense treaty with the United States, and to counter criticism that this country in enjoying a "free ride," it was necessary to convince the US that Japan is really endeavoring to bolster its defense power.

But he said Japan should avoid giving the impression it was merely bowing to US pressure.

The increase was necessary to Japan's own security interests, as well as those of the region, he said.

The Defense Agency was pressing for the biggest possible increase because of the growing Soviet naval and air presence in the Far East, as well as the threats to Japan's vital trade routes posed by elements such as growing Soviet-Vietnamese military cooperation, and instability in southern Asia and Gulf.

But the push for extra military spending came as the government was determined to keep the overall budget increase below 10 percent, as a first step in escaping a chronic deficit, which has been papered over by increasing issues of government bonds. (This is the first year the budget increase has been under 10 percent since 1959.)

Prime Minister Suzuki made this his major objective after assuming office last summer.

It was a twin-pronged assault, coupled with a heavy increase in taxes that will cause widespread unhappiness.

Japan's basic tax rate for the average salaried man in his mid-30s is now less than 10 percent. But to help pay for a total budget of some $223 billion, the government plans to generate $29.5 billion in extra taxes.