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Japan Defence and Security Report Q3 2008Published by: Business Monitor International Published: Aug. 18, 2008 - 51 Pages Table of Contents
AbstractJapan’s internal and external security situation has not altered significantly in 2008. Japan faces a range of strategic uncertainties closely tied to the ever evolving and emerging strategic role it plays in the Asia Pacific region. In précis, changes in government and external factors and influences have forced Japan to re-evaluate its security identity. Japan and China share a strained relationship; however it is noteworthy that Japan has started to engage on a more substantive level with China. This is reflected in a meeting between the two respective heads of state in Q108. During the meeting, Japan and China committed each other to greater co-operation on security issues. Moreover, Prime Minister Fukuda stated that he would not visit the controversial Yasukuni shrine. However, there is still much ground for Japan and China to cover, as demonstrated by the lack of progress made on the dispute over the East China Sea gas fields during the talks.In recent history, defence expenditure patterns have remained largely unchanged, with procurement only receiving some 20% of the total defence budget and personnel costs accounting for up to 45%. The recent push to improve the defence capability of the Self-Defence Force may lead to that composition changing, with a higher percentage of funds going towards acquiring and upgrading military hardware. A number of large companies dominate the Japanese defence industry. Officially members of the heavy industries, participants in the defence industry include Mitsubishi, Kawasaki, Ishikawajima-Harima, and Fuji Heavy Industries. The industry’s unique structure is underpinned by Article 9 in its Constitution, which prohibits Japan from having a fully developed armed force and defence industry. However, there are likely to be substantial changes in the coming quarters, as indicated by the shifts in Japan’s diplomatic position. The government is moving forward with plans to produce the PAC-3s missiles indigenously at the cost of JPY10bn, with Mitsubishi Heavy Industries (MHI) initially awarded the contract in 2005 to produce the PAC-3s missiles. Analysis of Japan’s macroeconomic conditions reveals that the overriding concerns are long-term challenges such as demographic decline, weak foreign investment, insufficient innovation, falling competitiveness, and a colossal debt burden. By comparison, short term matters, such as whether Japan's economy continues to expand or slips into recession in 2008 are of lesser consequence than these long term problems. The news is not all bad, however; Japan still has several fundamental strengths, ranging from world-beating brand-name industries, to a well-educated workforce, and a high-tech science base. Turning to matters of politics, Japan looks to be headed for headed for a change of leadership. Japan's Prime Minister Yasuo Fukuda is unlikely to be able to hold onto power much longer. BMI predicts that one of three scenarios may play out over the coming months. The first is that Fukuda is replaced by another Liberal Democratic Party (LDP) powerbroker, such as Taro Aso. The second is that a snap Election Held and Fukuda’s LDP wins with a reduced majority, affording a mandate to the embattled leader. The third is that a snap election is held, and the opposing Democratic Party of Japan (DPJ) wins a majority, effectively ousting Fukuda. For a full analysis of these scenarios, please refer to the Political Overview later in this report. Get Full Details About This Report >> |
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