Tooling Up for War: Can Japan Benefit from Lifting the Arms Export Ban?
ASIA--PACIFIC, 7 Jul 2014
David Mcneill - The Japan Times
28 Jun 2014 – Abe’s decision to end the nation’s four-decade ban on selling weapons in April reflected an intention to take a hard-nosed approach that builds military and technical alliances to counterbalance China’s rise. But what does it all mean? And, more importantly, who is expected to benefit from the deal?
The Paris-based Eurosatory is one of the world’s biggest defense and security industry trade shows, drawing specialists from nearly 90 countries to view the latest in military hardware. Among the tanks, drones, military helicopters and police riot vehicles that were exhibited last month, 13 Japanese companies set up shop for the first time.
The Japanese delegation included the country’s largest military contractor, Mitsubishi Heavy Industries, along with some of its biggest corporate stars: Mitsubishi Electronics, Kawasaki Steel, Hitachi, Fujitsu, Toshiba and NEC. They brought with them tank engines, radars, missile technology and other high-tech goodies.
Although small in scale, the delegation was one of the clearest signs yet that Japan’s military contractors are touting for business in the wake of Prime Minister Shinzo Abe’s surprise decision earlier this year to end the nation’s four-decade ban on selling weapons and military hardware. The decision is another milestone in the country’s steady retreat from its postwar pacifism.
Japanese troops have not fired a weapon in war since the military was defanged by the U.S. Occupation in 1945, and the nation’s corporate sector has more or less observed a total ban on weapons exports since the 1970s. In April, Abe announced a change in Japan’s three principles of “arms exports” to “defense equipment transfer.”
Washington welcomed the decision.
“We believe this is a good step,” U.S. State Department spokesperson Marie Harf said. “What the change really does is allow Japan to modernize its defense industry and processes so it can participate in the 21st-century global acquisition marketplace.”
The shift away from Japan’s core anti-war principles is far from popular. A poll in the liberal Asahi newspaper in April said 77 percent of voters are against ending the weapons ban. A survey by Kyodo News in June found opposition to Abe’s attempt to end the ban on collective self-defense growing — up from about 48 to 55 percent in a single month — despite the staunch support of the nation’s largest newspaper, the conservative Yomiuri.
Perhaps for this reason, the defense shift is sugarcoated in innocuous language to avoid ringing alarm bells at home and ruffling diplomatic feathers in Asia.
The new export guidelines will “help maintain global peace and security,” the government says.
In 2013, Abe told the United Nations that Japan will “newly bear” the flag of “proactive pacifism,” an unintentionally Orwellian-sounding phrase that stands in for a potentially more controversial one: confronting rising China.
A month before Abe’s U.N. speech, Japan launched the Izumo, a 250-meter-long “flat-topped destroyer” loaded with helicopters destined for “humanitarian missions.” Named after a World War II armored cruiser that was sunk by the U.S. Navy in 1945, the warship joins two other helicopter ships that China and others have branded “quasi-aircraft carriers.”
The distinction in terminology is crucial, said Mark Rowson, a defense specialist with Thales, a multinational defense contractor based in France. Aircraft carriers imply a projection of force well beyond Japan’s shores, he said. The Izumo is almost certainly equipped to carry small numbers of F-35 jets, a generation of fighter aircraft, including vertical takeoff versions, produced by a consortium of U.S. allies led by contractor Lockheed Martin.
Many analysts see the launch of the Izumo as the first step in the buildup of an eventual battle carrier group.
“It’s the sort of reverse of China,” a regional security analyst said, speaking on condition of anonymity. China has “a couple of big toys” — notably its Liaoning aircraft carrier, bought second-hand from Ukraine and refitted — but it “doesn’t know how to use them,” he said. “Japan is building up capabilities the other way round, steadily building knowledge, capability, operational know-how and integrating steadily more advanced platforms and missions with the U.S.”
The Defense Ministry will not officially admit to these claims. “In my opinion, that’s the reason Japan could not explain why it had rejected a competing bid by the Eurofighter Typhoon (in 2011),” said Michel Theoval, a defense analyst and senior vice chairman of the European Business Council in Japan. “Japan wants to use it to carry the carrier-borne F-35.” The Ministry of Defense denies this claim.
‘Hothouse industry’
For years, Japanese defense contractors such as Mitsubishi Heavy and Kawasaki Steel have made small numbers of expensive submarines, tanks, fighters and other weapons for a single customer — the Self-Defense Forces. The price tag for a single Soryu, the world’s largest diesel submarine, built by Mitsubishi Heavy and Kawasaki Heavy, for example, is reportedly $2 billion.
Lance Gatling, a leading Tokyo-based military analyst and broker, called defense in Japan a “hothouse industry producing at tremendous cost.”
Pressure for change has long been building but Gatling said it was the F-35, what he called the world’s largest, most expensive military program, that tipped the balance. “Japan said, ‘We want to take part in this too,’” he noted.
The country’s pacifist rules severely restricted cooperation with the multinational consortium that builds the jet.
Relaxing these rules and allowing domestic firms to sell abroad will cut unit costs and allow economies of scale, said Narushige Michishita, a security specialist at the National Graduate Institute for Policy Studies.
“At the height of the Cold War we maintained perhaps 1,200 tanks. Now we have 300,” he said. “It’s a waste of money making 300 tanks.”
The move will also help Japan modernize its weaponry, boost what the industry calls “interoperability” and weed out uncompetitive contractors. And with big military contracts such as the F-35 and missile defense, it will allow a bigger say in what gets built, and why.
“The cost and effort required to develop high-tech fighters and missiles has become so huge, we can’t just throw money at it,” Michishita said. “Now, our concerns will be incorporated into the design of new equipment.”
Underlying the drive away from the country’s pacifist principles, however, is a deeper concern, say analysts: American decline.
Earlier this year, Yosuke Isozaki, a security adviser to Abe, became the latest conservative politician to forecast this decline, and its consequences for Japan.
“Truth be told, the U.S. can no longer afford to play the world’s policeman,” he told a conservative seminary sponsored by the Yomiuri. “This is no longer an era when Japan is permitted to do nothing and count on America to protect it. It’s become extremely important we do our own share alongside the U.S.”
Shigeru Ishiba, secretary-general of Abe’s Liberal Democratic Party, has long held similar views.
“China’s defense spending will continue its double-digit growth, enhancing its relative strength and reducing America’s power,” he told delegates at the same meeting.
Such fears have prompted Japan to end its long decline in military spending. Global military spending actually fell 1.9 percent last year to $1.75 trillion, according to the Stockholm International Peace Research Institute. But military expenditure in Asia and Oceania was up 3.6 per cent, mostly thanks to a 7.4 per cent increase by China, which spent an estimated $188 billion.
Some Western nations refuse to sell weapons to China but while lagging far behind the U.S. and Europe, the planet’s second largest economy has become an increasingly sophisticated and self-sufficient military power. Its capacity to project this power across the seas around Japan will grow as it bumps up against the historical limits imposed on it by once stronger powers.
“We may have to come up with an Asian version of NATO,” Narushige said. “Loosely defined, loosely networked and excluding China.”
‘Change in mindset’
It is against this background that Abe announced the three new defense export principles. Although the prime minister rhetorically insists Japan’s door for dialogue with Beijing is open, Abe increasingly appears to favor a hard-nosed approach that builds military and technical alliances to counterbalance China’s rise.
“Cooperation in military equipment must be part of Japan’s proactive peace strategies,” he said earlier this year.
Defense analysts are still trying to determine what this will mean in practice. In the view of Keidanren, Japan’s largest business lobby, Abe’s initiative will cut red tape and create what Satoshi Tsuzukibashi, head of its defense-production committee, called “a change in mindset” in the domestic defense industry.
“The fact that we can cooperate with foreign companies is important,” he said.
He predicts the initial impact, however, will be small. The big contractors will try to sell more, and work more closely with foreign partners.
“But companies that aren’t directly involved in defense now, such as Sony, will be careful about their image,” Tsuzukibashi said. He said other Japanese companies with interests in China will tread warily for fear of a backlash.
One immediate likely impact of Abe’s announcement will be increased sales of patrol vessels and military equipment to Vietnam, the Philippines and other regional allies, analysts say. Japan and India have already reportedly agreed to promote the export of the ShinMaywa US-2 amphibious rescue aircraft, Japan’s first overseas military sales since 1967. Australia is in talks to buy the 4,200-ton Soryu submarine.
A steady trickle of representatives from European defense companies has visited Japan in the last year to discuss tie-ups. One possible French project is the creation of an underwater, unmanned vehicle for mine hunting, using Mitsubishi Heavy Industries technology. Japan’s main military research lab, the Technical Research and Development Institute, has agreed to collaborate with the United Kingdom to develop chemical and biological protective suits for the battlefield.
“Japan seems to be saying ‘OK, let’s try a small step, then we’ll try another one,’” said Robin Wilson, chairman of the European Business Council’s Defense Committee.
He predicted that Japan’s restrictions on collaboration and exports will continue.
“There won’t be a mass opening of the floodgates,” Wilson said. Instead, he said Japanese companies selling more niche or dual-use technologies: radar and communications technologies, command and control systems and optical sensors.
Most analysts agree that Japan will not be a big player in the global arms industry — at least for now. For one thing, 70 years of pacifism means its weaponry is not battle tested — a major selling point for U.S. and Russian military contractors, said Robert Dujarric, director of the Institute of Contemporary Asian Studies at Temple University Japan.
For another, Japan has little experience in the global military marketplace and cannot offer the same sales support as its competitors.
“When the U.S. sells arms to Japan or Korea, it’s implicitly part of the bigger package of American military support,” Dujarric said. “Japan can’t offer protection.”
Gatling agreed, saying the end of the ban raises “interesting possibilities” but its impact remains to be seen.
One key testing point will be missile technology. Mitsubishi Heavy Industries is Japan’s prime contractor for the Patriot missile defense system developed by Raytheon, one of the world’s largest military contractors, producing high-tech missiles, bombs and battlefield control systems. The missile-defense system is designed to shoot down incoming missiles and Mitsubishi Heavy Industries helps builds its guidance system and rocket motor. U.S. defense officials have been pressuring Japan to export this technology, according to the Asian Nikkei Review.
“The new rules pave the way for shipments of both prototypes and mass-produced items,” the Asian Nikkei Review said.
Amplified through a largely servile domestic media, Abe and his Cabinet argue that all of this is needed to “defend” Japan and maintain “peace” in Asia.
An alternative view — that it could trigger an arms race and create the opposite effect — is less often heard, although it was recently aired by former Prime Minister Yukio Hatoyama.
Speaking at the World Peace Forum in Beijing last month, Hatoyama said the purpose of “proactive pacifism” and using what he called the “threat of China” was to push Japanese people toward accepting remilitarization.
“There will be a day when Japan places the same emphasis on its relations with China as it does on the U.S. today,” Hatoyama said.
But first, he added, the two sides must avoid the “spiral into conflict.”
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Under the Peace Radar
Despite being a pacifist country, Japan has a surprisingly large defense industry.
Japan is hardly the only ostensibly pacifist country with a large defense industry. Peace-loving Sweden is the world’s third-largest weapons exporter per capita, after Israel and Russia. Sweden’s anti-tank missiles and other items have ended up in Saudi Arabia, Pakistan and other countries with spotty human rights records, critics say.
Like Japan, Germany has kept its troops at home since the end of World War II but sells more weapons than any other country besides the United States and Russia, according to The Economist.
Germany’s policy on exports has long contrasted to Japan’s, said Robin Wilson, chairman of the European Business Council’s Defense Committee. “Germany is more about noninvolvement of its people in foreign conflict,” he said, “not in proscribing equipment.”
Moreover, Japan’s arms ban has always allowed “exceptions.” The Self-Defense Forces and its main domestic suppliers have long exchanged equipment and technology with the United States. The U.S. military uses Panasonic Corp.’s laptop computers to guide drones, several sources say. Toyota’s ubiquitous Land Cruiser is the vehicle of choice for guerilla fighters across the Middle East.
Behind its own borders, Japan has built up a formidable military supply chain. It has more submarines than Britain and France put together and one of the largest navies in the world.
The Defense Ministry and SDF deal with 4,568 private companies, 675 of which are in weapons manufacturing, according to business magazine Diamond Weekly. Only a handful, however, specialize in weapons.
Japan’s market for munitions sales is small and ranks outside the world’s top 30.
However, the end of Japan’s weapons ban could still reverse this trend. The country’s large manufacturers have a strong record in military equipment: Mitsubishi Heavy built the Zero fighter plane, Kawasaki Heavy built the “Hien” Type 3 fighter. Dozens of electronics manufacturers also play core roles in the defense industry.
In addition, the Defense Ministry’s main weapons research facility, the Technical Research and Development Institute, was given a 55 percent annual budget increase last year — to ¥166 billion, according to Reuters.
After years of staying low-key on defense, Japan is “tooling up” in the words of one analyst.
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Top 10 Domestic Munitions Companies
1. Mitsubishi Heavy Industries Fighter planes, helicopters, submarines, tanks and other army vehicles
2. Mitsubishi Electronics Missiles, radar, communications systems
3. Kawasaki Heavy Industries Submarines, engines for battleships, maritime patrol aircraft
4. NEC Radar, sonar, communications’ systems
5. Ishikawajima-Harima Heavy Industries Escort ships, fighter planes, rockets
6. Fujitsu Communications systems, radar
7. Komatsu Tanks and special vehicles, guns for tanks
8. Toshiba Missiles, radar, communications’ systems
9. Hitachi Sonar, mines detectors, ammunition carriers
10. Daikin Missile heads, guns for tanks, ammunition
Source: Diamond Weekly
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Why did Prime Minister Shinzo Abe decide to lift the ban of exporting military weapons?
One of the main reasons for that is Abe is attempting to fix the state finance. Japan’s government debt (= the Japanese Government Bonds or “JGBs”) to GDP is “227.2%” as of December 2013. It is the world number one debt to GDP. The world number two is Greece, “175.1%”; the number three is Italy, “132.6%”. (Source: tradingeconomy.com/country-list/government-debt-to-gdp) If Greece and Italy are in the critical economic condition, Japan is far more than the critical economic condition.
“Abenomics”, aiming to increase Japan’s export by depreciating the JPY, did not work as the Government expected. It actually worked but not very much, because many Japanese products today are produced not in Japan but outside Japan. When the Japanese export is not restored, the Government cannot obtain the expected amount tax revenue so that they can hardly reduce the amount of the government debt.
Meanwhile, the Government expenses increase rapidly. One of the relatively new and unexpected expenses is astronomical costs of the reconstruction and compensation for the destroyed and/or radioactivity-contaminated areas, including Fukushima, caused by the Great East Japan Earthquake on 11 March 2011. In addition, Japan is one of the main aging societies in the world today, meaning that the Government cannot help but increase expenses for the pension cost and relevant social welfare costs. Japan’s median age is 45.4, the world number two after Monaco’s, which is 49.9 the world number one; both 2013 estimated. (Source: photius.com/rankings/median/age_age_total_2013_0html.)
The Government is looking for financial resources for all that. Where are these resources? The Government raised the VAT from 5% to 8% in April this year. They are planning to raise it to 10%, reportedly either at the end of this year or in the beginning of next year. Some government officials suggest that the Government raise it up to 20% by 2020. (Source: businessweek.com/news/2013-09-24/debt-disaster-seen-unless-vat-rises-to-20-percent-by-2020-japan-credit) However, the Government revenue, even if the VAT rate will be raised as such, will not be enough to cover the increasing expenses of the Government, not to mention to reduce the amount of the JGBs as discussed above.
What to do next? Abe decided to do something unthinkable for Japan after WWII. What was that? The answer: to export Japan’s military weapons, one of the most profitable businesses.
It was probably one of the most serious decisions for him as the prime minister. Many countries want to buy Japan’s high-tech weapons. A huge market for weapons is right there. Abe and his Government decided to unlock the forbidden Pandora’s Box. However, what kind of hope does his Pandora’s Box contain?
The principle of the ban of exporting military weapons derived from Japan’s pacifism, one of the main principles of the Constitution of Japan. Although the Constitution does not refer to the ban of export of military weapons, this principle of banning the export of weapons expresses Japan’s determination in the spirit of pacifism so that the Japanese Government has abided by the principle over the decades.
If “the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as means of settling international disputes” (= Article 9 para 1), how is it possible to read Article 9 as the Japanese supreme legal norm that lets or allows Japan to export of made-in-Japan military weapons?
If “land, sea, and air forces, as well as other war potential, will never be maintained. The right of belligerency of the state will not be recognized” (= Article 9 para 2), how is it possible to read Article 9 as the Japanese supreme legal norm that lets or allows Japan to export of made-in-Japan military weapons?
If the Japanese people “desire peace for all time and are deeply conscious of the high ideals controlling human relationship and we have determined to preserve our security and existence, trusting in the justice and faith of the peace-loving peoples of the world. We desire to occupy an honored place in an international society striving for the preservation of peace…”(= Preamble of the Constitution of Japan), how is it possible to understand that this Constitution lets or allows the Japanese people to sell military weapons to foreign countries?
If the Japanese people “determined that we shall secure for ourselves and our posterity the fruits of peaceful cooperation with all nations and the blessings of liberty throughout this land, and resolved that never again shall we be visited with the horrors of war through the action of government…” (= the Preamble of the Constitution), how is it possible to understand that this Constitution lets or allows the Japanese people to sell military weapons to foreign countries?
On top of that, the Japanese people “reject and revoke all constitutions, laws ordinances, and rescripts in conflict herewith.” (= the Preamble of the Constitution) It is obvious that the Government’s policy on the sale of military weapons to foreign countries conflicts with the Constitution. Accordingly, the Government should reject and revoke that policy.
Unfortunately, Abe’s government changed one of the main peace principles of Japan, to which this country has stuck since the end of WWII. “The principles you live by create the world you live in; if you change the principles you live by, you will change your world.” (Blaine Lee) If what Lee says is true, it may also be said like this: “The principles the Japanese government lives by create the world they live in; if they change the principles they live by, they will change their world.” President George W. Bush said, “I’ve abandoned free market principles to save the free market.” (Source: theinvisiblehand.typepad.com/the_invisible_hand/shoe-thrower/ ) Will Prime Minister Shinzo Abe justify his decision by saying, “I’ve abandoned (one of the) peace principles to save Japan’s state finance”?
It is highly understandable that Abe is struggling in search for new and effective financial resources to repair the critical state finance. However, he should be aware of what he is allowed to do and what is not, within the framework of the Constitution. Revoke the ban-lifting decision and return to the four-decade peace principle, Prime Minister Abe. It is not too late.