JSDF AH-64 Apache. Budgetary and procurement issues drove Japan's Apache buy from 62 units to just 10.

Reuters reports Japan’s defense spending is set to increase by a modest .06 percent in the fiscal year 2012 defense budget.

Japan’s Defence Ministry said on Friday its request for funding for the fiscal year from next March is virtually unchanged from the current year as the country faces China’s military buildup while trying to rein in massive public debt.

The ministry said it requested 4.69 trillion yen ($61 billion USD) in budget appropriations for 2012/13, up 0.6 percent from this year’s actual budget.

Its shopping list for the new year includes a 119 billion yen destroyer ($1.57 billion USD), 56.5 billion yen submarine ($734 million USD) and four next-generation combat planes, the first batch of about 40 fighter jets that will replace ageing F-4 Phantoms.

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Japan’s GDP in 2010 was estimated $5.459 trillion USD. A defense budget of $61 billion USD makes Japan’s defense budget 1.11% of GDP.

The Daily Yomiuri complains that this would be the “10th straight year” of declining defense budgets.

If the Finance Ministry’s budgetary assessments proceed as usual, there is a strong possibility the defense budget for the coming fiscal year will fall below its level in fiscal 2011, resulting in the 10th straight year-on-year drop in defense spending. This means appropriations for defense will have shrunk by more than 5 percent from the peak figure seen in fiscal 2002.

In the past 10 years, defense expenditures in surrounding countries have soared. Russia, for example, is spending 5.8 times its level a decade ago and China is spending 3.7 times what it did 10 years ago. The Chinese military’s rapid modernization and expansion of its activities have caused particular concern throughout Asia.

The Yomiuri makes good points as to how this impacts the SDF, particularly in terms of procurement.

Based on the National Defense Program Guidelines newly charted at the end of last year, the nation must bolster its “dynamic defense capabilities,” and place higher importance on the defense of the southwestern waters off Kyushu.

The year-on-year cuts in defense spending have had a multitude of harmful effects, primarily because a great portion of defense spending is on so-called mandatory expenditures. These include personnel and food supply costs, which account for more than 40 percent of the entire defense budget; the “sympathy budget” to help cover the expenses of U.S. forces stationed in Japan; and years-long installment payments for equipment contracts.

As a result, there tends to be pressure to curtail discretionary defense spending, which is about 14 percent of the defense budget. The Self-Defense Forces’ acquisition ofnew equipment, including tanks, ships and aircraft, has been delayed across the board.

In one example, the Defense Ministry has only managed to buy a very few state-of-art P-1 patrol planes, so the cost per airplane is higher than it would have been with a bulk purchase. Some out-of-date equipment has been remodeled to put off decommissioning, but repair costs have inevitably been rising because old equipment is prone to break down. Defense equipment is caught in a vicious circle.

Read the rest here.

By point of comparison, the defense budgets of other countries (2oo9 numbers):

Name Defense Spending in Yen/USD Defense Spending as % of GDP Notes
Japan 4.69 trillion yen  / $61 billion USD 1.1%  See above
United States 52.2 trillion yen/  $688 billion USD 4.7& 2009 SIPRI Est.
Russia 3.95 trillion yen / $52 billion USD 4.3% 2009 SIPRI Est.
China 8.66 trillion yen / $114 billion USD 2.2% 2009 SIPRI Est.
South Korea 1.82 trillion yen / $24 billion USD 2.9% 2009 SIPRI Est.
North Korea 666 billion yen / $8.77 billion USD  22% Janes, CIA
United Kingdom 4.4 trillion yen / $57.9 billion USD 2.7% 2009 SIPRI Est.
France 4.6 trillion yen / $61 billion USD 2.5% 2009 SIPRI Est.
India 2.72 trillion yen / $35.8 billion USD 2.8% 2009 SIPRI Est.

* All USD figures based on ¥76 = $1.00 USD exchange rate as of 10/24/11.

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A contributor and editor at the blog War Is Boring, Kyle Mizokami started Japan Security Watch in 2010 to further understand Japan's defenses and security policy.
Kyle Mizokami has 596 post(s) on Japan Security Watch