Japan’s Defense Industry Lifeline

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Japan’s Defense Industry Lifeline

The Japanese government’s decision to relax rules on defense exports has the potential to give the country a much-needed national security boost.

By deciding this week to relax its rules prohibiting the export of defense equipment, the new Japanese administration of Yoshihiko Noda has done something that local defense industry and the country’s security experts have for many years been crying out for.

Until now, the numbers just didn’t add up for Japan’s big defense firms, such as Mitsubishi Heavy Industries and Kawasaki Heavy Industries. Their only customer, the Japanese government, has stubbornly held defense spending below 1 percent of GDP, with much of that money going towards imported American weaponry; indeed, the defense budget has generally been declining in recent years. And with hi-tech defense equipment becoming ever more expensive to develop, Japan’s defense industry was facing an unenviable life away from the cutting edge of military technology. In another business sector that might not have been so disastrous, but the death of a country’s defense industry brings with it considerable security risks – especially when you live in a neighborhood as uncertain as Japan’s.

Chief Cabinet Secretary Osamu Fujimura, who announced the policy shift, stressed that the Three Principles on Arms Exports, which govern defense sales, would remain in place. This means that arms export opportunities will still be restricted and subject to government approval on a case-by-case basis; most importantly, companies will still be prevented from selling equipment that might end up being used in anger. However, new “criteria regarding overseas transfers of defense equipment” will enable Japan to jointly develop military equipment with other countries.

It’s grimly ironic that this decision, which is an important tonic for Japan’s increasingly moribund defense industry, came within days of Tokyo’s announcement that it is to procure the Lockheed Martin F-35 Lightning II fighter aircraft. The F-35 is exactly the kind of collaborative project that Japanese industry needs to be a part of – an opportunity to draw on technological expertise from the cream of the global defense industry, and to share in the work of developing and building an advanced new aircraft. Unfortunately, the government’s rethink came too late for Japanese industry to participate meaningfully in this important international project: as it is, none of the systems in the F-35 will be Japanese, and Japan’s own F-35s will merely be assembled in Japanese plants.

Having already missed out on the biggest international defense collaboration currently out there – and perhaps the biggest that will ever be – Japanese industry can at least now focus on the positives of this week’s decision. The government will of course be slow, as Japanese governments are, to ease its restrictions on defense exports. However, opportunities to sell kit overseas should now increase. Precedents already exist. In 2006 Japan sold patrol vessels to Indonesia: a benign and sensible sale to a country that needs help in building up its under-strength navy. And just last month, Tokyo gave the green light for ShinMaywa Industries to respond to an Indian government RfI for a search-and-rescue seaplane. Japan should be able to sell this kind of equipment to scores of countries around the world without compromising its pacifist principles, and for the sake of its domestic industry it needs to start doing so aggressively.

No less important is the prospect of engaging in meaningful development programs with other countries. Importing weaponry does nothing for local industry, while developing advanced systems yourself is becoming prohibitively expensive. Japan can now build on its existing security relationships to start developing defense technology with its allies and so get the most out of its defense dollars. An obvious opportunity is coming up imminently in the form of the development of Japan’s indigenous stealth fighter, the Shinshin ATD-X. If Tokyo is genuine about wanting to develop the Shinshin – something that many aviation analysts continue to question – it can now call on the expertise of Boeing, which is frozen out of the F-35 program, or a second-rank F-35 participant like BAE Systems. Better still, it could follow the South Korean-Indonesian model and find a friendly country to share the development costs with.

Pacifism will remain at the heart of Japanese government policy, but there’s now a sense that not even pacifism should be allowed to stand in the way of national security. The Noda government has made the right decision. If Japan wants to be able to defend itself adequately in the years to come, it’s now important that his government and the ones that come after not only stick to it, but also build on it.