Japan defense budget may soon break symbolic limit

Another political sacred cow may soon become extinct.

A Japanese self-imposed limit on defense spending - within 1 percent of the gross national product - is unlikely to last more than another year.

But for several economic and military reasons, these increases do not appear likely to meet American demands for greater Japanese military spending. And the question remains as to whether pure percentage calculations can continue to have much meaning.

The 1 percent limit has always been a mere ''magic number,'' a psychological limit set up out of regard for public sensitivity to the issue of Japanese rearmament. The Tokyo government set the limit in November 1976, and current Prime Minister Zenko Suzuki several times has pledged to maintain it.

But he has been under mounting pressure from within his Cabinet and ruling Liberal Democratic Party to accept that the artificial barrier is no longer realistic in the face of changing international circumstances.

Last week, the prime minister finally conceded to reporters that by fiscal 1985 planned increases in the military budget as well as sluggish economic growth will probably combine to break through the barrier. In the current year defense spending amounts to 0.93 percent of the GNP, compared to 0.91 percent last year.

A consensus gradually seems to be emerging within the government toward possession of a capability to defend Japan's sea lanes out to about 1,000 nautical miles from shore, as proposed by the United States.

But analysts are predicting that throughout the 1980s, defense policy will operate under severe constraints, some economic and financial, and some social, arising from a dwindling population. The result may create recruiting problems and a shortage of land for military base expansion.

Meanwhile, there are reports here that Washington has now raised its sights - seeking a Japanese defense spending level equivalent to 1.8 percent of the GNP by 1990.''

And agency officials say British experiences in the Falklands Islands require a rethinking of strategy, as securing command of sea and air over such a large area as envisaged may not be as easy as everyone previously thought.

Defense Agency director General Ito told the Cabinet recently that despite gains in Japan's capacity to defend its sea lanes, ''US cooperation is still necessary.''

As a result, there is considerable concern in Tokyo at any suggestion the US might cut back its commitment like a withdrawal of troops from the Korean peninsula, or reduction of its Pacific naval force - at a time when an economically hard-pressed Japan is not in a position to take up the slack, even should it wish to do so.

Very little of the current defense budget actually goes toward a qualitative improvement of hardware (about 20 percent is the current estimate). Due to inflation and economic slowdown, major equipment acquisitions in the fourth defense buildup program (1972-76) fell short of goals: 89 percent for tanks, 65 percent for armored vehicles, 65 percent for ships, and 80 percent for aircraft, along with major shortfalls in training and bases, fuel and ammunition stocks.

The current scenario is for defense spending to increase a further couple of notches to 0.95 percent next year. Government sources say the magic number could actually be surpassed as early as fiscal 1984, if the economy fails to grow as much as official predictions - and in the past couple of years the government's targets have proved far too optimistic.

Therefore, Japan feels well content it is doing everything possible to satisfy the US, given the tight budgetary constraints and the need to inch forward in the face of considerable public wariness about defense spending.

Left-wing opposition parties are already up in arms at the prospect of the spending ceiling being abandoned.

''Once the limitation is removed there will be nothing to stop the government from embarking on a major rearmament program,'' argued a spokesman for one of the opposition parties.

But the fact remains that Japan is still spending less than a tenth of current American defense budget levels.

Its fiscal 1982 spending, for example, amounts to about $10.22 billion at the current rate of exchange. In some years the American defense budget actually increases by a similar amount.

Defense Minister Soichiro Ito has just done battle with the austerity-minded finance ministry to win a $750 million, 7.3 percent increase in allocations for fiscal 1983. Mr. Ito had wanted almost 10 percent, while Finance Minister Michio Watanabe held out for a maximum of 6.9 percent.

Day-long negotiations dragging on into the early hours of the morning last week finally produced the compromise. Government sources claim Ito - and the Reagan administration - should be well pleased with his achievement.

Washington, officials insist, really should give more credit for these efforts. The government is courting trouble by increasing the defense budget at all, they say.

Defense spending is one of the few items of government spending to escape the ax. Most government agencies have been told to cut their spending by an average 5 percent from this year.

And that apparently includes welfare spending, which last year was allowed to increase 7.6 percent to offset possible public anger at the 7.61 percent boost in military funds.

A prolonged recession that has slashed expected tax revenues by tens of billions of dollars and widened a chronic gap between government income and expenditure has pushed the Suzuki Cabinet onto the road to severe austerity.

Over the next three years efforts are to be made to cut government spending by an annual amount equivalent to almost $1.5 billion.

Other government departments forced to cut back are grumbling that defense cannot be considered sacrosanct in these hard times, and even Prime Minister Suzuki has been warning the defense agency ''not to run ahead of itself.''

Critics are already claiming that he has ''caved in'' to American pressure.

The current front-line equipment procurement program ending this year calls for spending of about $10.9 billion. The 1983-87 program now being finalized is expected to total $17 billion.

The Defense Agency is optimistically talking about increasing its F-15 fighter force from 80 to 155, adding 50 antisubmarine patrol planes to 25 already ordered, along with 375 new tanks, 16 extra ships (bringing the total destroyer force up to 60) and new missile systems. But wear and tear of existing equipment will erode some of the gain.