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Japan sees slow economic recovery but strengthening military

Japan sees slow economic recovery but strengthening military

After covering the continuing fallout from the Fukushima nuclear plant disaster, I decided to see how Japan’s economy was recovering after the devastating 2011 tsunami.

If Obama-style definitions were utilized, their recovery would be spectacular. However, with growth at 2.6%, there is serious pressure mounting on Prime Minister Shinzo Abe.

Japan’s economy grew 2.6% last quarter, slower than expected, as companies wary about the prospects for a sustained recovery kept a tight rein on investment.

On a quarter-to-quarter basis, the world’s third-largest economy grew 0.6% in April-June from the previous quarter, the Cabinet Office said on Monday in its preliminary estimate.

Japan’s public debt surpassed the 1 quadrillion yen (£6.7tn) mark last week and the country needs a strong recovery to boost tax revenues enough to begin reducing its debt burden.

But one sector may be experiencing real growth. With a crazed neighbor to its north, and an aggressive one to its west, Japan has sensibly decided to increase defense spending.

Defense Minister Itsunori Onodera said Japan cannot afford to be complacent over what he said are significant security issues in the region. His ministry announced last week it is seeking a 3 percent increase in defense spending for the coming year, the biggest increase it has requested in 22 years.

Onodera said the increase reflects growing concern in Japan that it must move to counter a more assertive Chinese military amid territorial disputes over uninhabited southern islands. He also noted that North Korea has the ability to strike targets within Japan — including U.S. bases where about 50,000 American troops are stationed — and said Japan’s military must be fully prepared to respond with its allies to any contingency with the North.

“There are various tensions ongoing in Asia, and in some cases, there are countries that even use threats,” he said.

Prime Minister Shinzo Abe has been a strong advocate of strengthening Japan’s military despite the country’s other economic pressures, including the massive costs of reconstruction and decontamination following the nuclear disaster triggered by the devastating earthquake and tsunami that hit Japan’s northern shoreline in 2011. Japan’s defense spending has been declining steadily for 11 years, although it increased slightly this year.

And that members of the current administration are “concerned” should indicate the new Japanese approach to its national defense is a good one.

The U.S. is growing increasingly concerned with Japan’s overhaul of its military capabilities, a number of recent stories make clear.

Earlier this week Kyodo news reported that U.S. officials have expressed concern to their Japanese counterparts over Tokyo’s plans to develop the capability to conduct offensive assault operations against other countries in the region….

The report went out to say that U.S. officials asked for clarification on which countries Japan would develop the capability to attack, and asked Japan to not worsen tensions with China and South Korea.

I suspect the Japanese government will address the “concerns” with the usual amount of deference and respect that the Obama administration is regularly receiving on the global stage. It will be interesting to see how the Japanese defense program develops from this point forward, but a Time World article notes that a lot of the funds will be directed at salaries slashed after the tsunami.

As dramatic as the turnaround in Japan’s defense spending might appear, it will buy very little new capability. Much of the increase in 2014 would go to restoring government-wide pay cuts imposed after the 2011 earthquake and tsunami in northeast Japan.

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Comments

“If Obama-style definitions were utilized”
Is this simply well-justified snark regarding the adjective that Obama would use, or are there material substantive differences between how the two governments measure “recovery”?

    redc1c4 in reply to Rick. | September 6, 2013 at 9:49 am

    well, since the RICO regime has been proclaiming “Recovery Summers” for years now, without any recovery to show for it, i’d say this more “accurate” than “snark”.

    a quick perusal of the stories carried daily on Zero Hedge will pop a hole in the MFM propaganda about any economic recovery here in the US.

Japan, like most other countries, has figured out that, at least for now, the US is unreliable as an ally, and thus is looking to ensure that their national interests are maintained via other means.

who can blame them? given the brilliant, insightful and rock steady leadership of Presentdent Flip Flop both at home and abroad, they have no other choice.

    KM from Detroit in reply to redc1c4. | September 6, 2013 at 12:18 pm

    Japan, like most other countries, has figured out that, at least for now, the US is unreliable as an ally, and thus is looking to ensure that their national interests are maintained via other means.

    Sad, but true. I mean, not that any one country should be necessarily and wholly responsible for protecting another’s national interests, but still. Fifty years of “We’ll be your good buddy” thrown away because of a mindset that seems to think our spot should be not at the forefront, but in the last third of the pack.

Worth mentioning that Japan’s constitution is undergoing a major overhaul by the Liberal Democrat Party (which is not what you think). The LDP is a hybrid of ultra-conservatives (for a state religion), traditional statists (veneration of the Emperor and the military) and socialists.

Among the many proposed amendments is the deletion of the well known clause that Japan shall never maintain a standing army. The revision calls for a ‘National Defense Force’ with the Prime Minister as commander in chief.

A more heavily armed Japan? What could go wrong?

    Pettifogger in reply to Alex Bensky. | September 6, 2013 at 1:23 pm

    Lots, but a lot could go right, too. It is unreasonable to expect either Japan or Germany to forever submit to the end-of-WII disarmament. WWII ended nearly 70 years ago. They need to move on to protect their own interests, and we frankly need for them to do so as well.

O/T because it has to be:

This is the tenth non-Syria post in a row on LI. Coincidence, or are we to read something into that?

    Subotai Bahadur in reply to Henry Hawkins. | September 6, 2013 at 3:01 pm

    Because I am a suspicious soul, and you mentioned the coming Syrian war, just putting this out there.

    Buraq Hussein is going to lecture the nation Tuesday night on why he knows better than everybody else about the Middle East.

    Interesting scheduling. Can’t give the speech on the weekend, because no one would be watching. Monday is the Eagles-Redskins game, and most of Congress will be there. Wednesday is 9/11 and it might just hack off even more people if he desecrated the day. So it is Tuesday.

    What happens if the speech is an announcement that we have already struck Syria, before Congress votes?

    Does anyone here put it past him?

    Subotai Bahadur

Kyle Bass claims Japan’s debt is past the point of no return. As soon as interest ticks up above the current 0.17% on their bonds, problems will become more evident. He thinks war will be their only option.

http://media.chicagobooth.edu/Mediasite6/Play/f15d95d054e8442ab0cc1c60321383101d

he starts about ten minutes in, and takes a couple minutes to explain their debt.

We are on the same path, but could perhaps be woken up by Japan’s crash, or maybe Europe’s, in time to take the drastic measures. Reign in our spending, or completely remake all the phony retirement promises we have made. But meanwhile Obama will take an opposite tack of weakening and over-extending our military, while skyrocketing our debt on Bernie Madoff style promises of nirvana.

sarc: or maybe war is our best way out too, except we have to start keeping the lands we conquer, or force them to pay us. Or we could just farm our military out to the highest bidders. The Saudi’s are bidding for us to fight for them in Syria, and already bought Hillary a half million in jewelry, surely for influence. Who else are they bribing? /sarc

Subotai Bahadur | September 6, 2013 at 3:16 pm

Aucturian | September 6, 2013 at 10:33 am

has it right. Just noting that Japan [and every US ally by now with a lick of sense] has to realize that the last thing that will happen if they are attacked, is that the US under Obama will come to their aid. It is more likely that Obama will join whoever is attacking them.

Thus, the move to change the Japanese Constitution. I note that the Japanese Navy [JMSDF] is professional, modern, and building vessels to take on Chinese and North Korean threats.

Also, Japan has literally everything that they need, if they so desire, to go nuclear and have an ICBM force. They have the reactors, the nuclear fuel processing industry, and the ability to convert space probes into missiles right smartly. An ICBM just takes the ability to guide about 350 lbs. into a selected orbit. The Japanese have launched a >1000 lb. spacecraft out to an asteroid, landed it under control, took a sample of the asteroid, and launched it back for a pinpoint return to earth. [see Hayabusa probe].

I suspect that the distance they are from having a nuclear deterrent can be measured in turns of the wrench and the time it takes to paint over the Japan Aerospace Exploration Agency logo on the rocket.

And from the viewpoint of Japan, it is the rational thing to do, given that they stand alone.

Subotai Bahadur

Having followed the Japanese political scene in college, this comes as no surprise. It’s a tough up-hill battle to reform the Constitution, but while many people say Japan is white-washing it’s own history (to a degree), they cannot deny that China is using the Japanese guilt to keep them in check as they themselves decide all of Asia should be speaking Mandarin.

The fact Japan has to stand alone (the Koreans are also wary of a militaristic Japan) because we’re unreliable at the current moment, and Commonwealth nations (UK, Australia, New Zealand) are so far away without the capabilities the U.S. has, I can see why.

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