Unaddressed Challenges for Defense Policy Reform in Japan

The year 2022 marked a step forward in Japan’s defense strategy. The Japanese government decided to earmark approximately 43 trillion yen (about 30 billion dollars) over five years from 2023 to 2027 to strengthen and upgrade Japan’s defense capabilities. 

But securing resources was just the first of many steps Japan has taken over the years to further its leadership role in international security.

One example is next-generation fighter aircraft. On December 9, 2022, the leaders of Japan, the United Kingdom, and Italy issued a Joint Leaders’ Statement on the Global Combat Air Programme (GCAP) highlighting collaboration in developing a sixth-generation fighter aircraft. Simultaneously, Japan’s Ministry of Defense (JMOD) and the U.S. Department of Defense (DOD) released the Joint Statement on Cooperation for Japan’s Next Fighter Aircraft. These statements are integral to the concept of “advanced networked combat,” emphasizing the synergy between highly autonomous systems with artificial intelligence (AI) technology produced by the United States that would accompany crewed fighters that Japan is developing in collaboration with the United Kingdom and Italy—in combination, a game-changing capability for the sixth-generation fighter.

Japan also seeks to strengthen its domestic defense industrial base. In October 2023, the JMOD formulated a Basic Policy on Enhancing Defense Production and Technology Bases following the law it enacted on June 7, 2023. The policy aims to strengthen domestic infrastructure by providing national support to defense companies in the wake of the downsizing or withdrawal of more than 100 major Japanese defense companies, which has occurred over the past 20 years due mainly to the inability of the companies to generate profits commensurate with development costs. On December 22, 2023, the Japanese government announced the transfer of Patriot missiles produced in Japan under license to the United States, arguably an example of how increased potential for defense exports could incentivize Japanese industry. 

However, stringent conditions, including Japan’s prior consent for use and transfer to third parties, underscore the careful management of such exports. The strategic backdrop for these developments was Russia’s invasion of Ukraine, which prompted an active debate about the potential implications for security in Asia and a comprehensive review of Japan’s warfighting capabilities and defense equipment procurement practices. Much of this work was executed by the Acquisition, Technology & Logistics Agency (ATLA), which was established in October 2015 as an external bureau of the JMOD.

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