Japan military costs rise on purchases from US

A live-ammunition drill at Higashi Fuji range in Gotemba, southwest of Tokyo. Japan’s defense spending is expected to set a new record next year. (AP)
Updated 30 August 2019

Japan military costs rise on purchases from US

  • Planned purchases include F-35B stealth fighter jets capable of short takeoff and vertical landing

TOKYO: Japan’s defense spending is expected to set a new record next year as the country deepens its military alliance with the US and spends more on expensive American stealth fighters and other equipment amid threats from China and North Korea.

The Defense Ministry on Friday released its 5.32 trillion yen ($50.3 billion) budget request for fiscal 2020, an increase of 1.2 percent from the current year. It could swell further if Japan agrees to pay more of the cost of stationing American troops in the country or for US-led monitoring of tensions in the Strait of Hormuz near Iran before the budget is finalized later this year and approved by parliament.

Japan’s military spending has risen for seven consecutive years by a total of 13 percent, starting a year after Prime Minister Shinzo Abe took office in December 2012. In 2018 it ranked 8th or 9th in the world in total defense spending, depending on calculation method.

Abe has pushed for Japan’s Self Defense Forces to expand its international role and capability by stepping up cooperation and weapons compatibility with the US, as Japan increasingly works alongside American troops. Abe in 2015 reinterpreted Japan’s pacifist constitution to allow the use of force in defending itself and its allies.

Among the biggest planned purchases are six F-35B stealth fighter jets capable of short takeoff and vertical landing that cost 14 billion yen ($132 million) each, for deployment in 2024. They are the first of 42 F-35Bs that Japan is to acquire in coming years, along with 105 F-35As, for a total F-35 fleet of 147 — the largest number of any country outside the US, and, critics say, more than is needed for a country committed to self-defense. To accommodate the F-35Bs, the Defense Ministry will reconfigure the Izumo, one of two destroyers currently serving as helicopter carriers, beginning later this year with a heat-resistant flight deck and guiding lights at a cost of 3.1 billion yen ($290 million).

Defense Minister Takeshi Iwaya said earlier this month that F-35Bs belonging to the US Marines will also operate on the Izumo, primarily during joint exercises for the defense of Japan and not for independent US missions, addressing concerns that higher levels of integration between the two militaries could increase the risk of Japan becoming embroiled in a US-led conflict.

The arrangement underscores Japan’s expanding role in its alliance with the US as Trump pressures the country to do more. It also is a major shift for Japan’s navy, which has lacked aircraft carriers because of a concern that they would remind Asian neighbors of Japanese World War II aggression.

China’s growing military presence and capability as it strengthens its claims across the South China Sea have unnerved many in the region.

Japan, under its new defense guidelines for the next decade, will set up a military unit specializing in space and beef up measures against cyber and electromagnetic attacks. 

Japan and the US agreed this year to cooperate in defense in space, as China and Russia seek to expand their military capability into space.

The Defense Ministry is seeking 52.4 billion yen ($490 million) to launch a 20-member unit as part of the Air Self-Defense Force to monitor the impact of space debris and potential electromagnetic interference on Japanese satellites. Another aim is to acquire a tracking system using a highly sensitive radar and optical telescope.

While acquiring costly American weapons helps reduce the US trade deficit and enhances military cooperation and compatibility, it is a setback for Japan’s fledgling defense industry. Amid calls for Japan to produce its own replacement for its aging F-2 fighter jets, the ministry will start developing a successor, possibly as a joint international project.

Growing defense costs are also a burden for a fast-aging nation with a declining population.

Japan’s five-year Medium Term Defense Program requires defense spending of 27 trillion yen ($255 billion) through 2024.

A sham Qatar deal could have cost ex Barclays exec $64m, court hears

Updated 24 min 43 sec ago

A sham Qatar deal could have cost ex Barclays exec $64m, court hears

  • Roger Jenkins stood to get “good leaver” package -lawyer
  • Defense lawyers tell jury SFO case is misconceived, perverse

LONDON: A former top Barclays executive, on trial in London on fraud charges, would have risked a £50 million ($64 million) “good leaver” package if he had sought a criminal deal with Qatar during the credit crisis, a court heard on Thursday.
It would have been “lunacy” for Roger Jenkins, one of three men charged with fraud over undisclosed payments to Qatar during emergency fundraisings in 2008, to risk such accrued benefits and a job that had paid him 38 million pounds in 2007 alone, his lawyer told a jury at the Old Bailey criminal court.
The high-profile Serious Fraud Office (SFO) case revolves around how Barclays — one of the few major British banks to survive the credit crisis without direct government aid — raised more than 11 billion pounds ($14 billion) from Qatar and other investors to avert a state bailout as markets roiled.
Prosecutors allege that former top executives lied to the market and other investors by not properly disclosing 322 million pounds paid to Qatar, disguised as “bogus” advisory services agreements (ASAs), in return for around four billion pounds in two fundraisings over 2008.
Jenkins, the former head of the bank’s Middle East business, Tom Kalaris, who ran the wealth division and Richard Boath, a former head of European financial institutions, deny charges of conspiracy to commit fraud by false representation and fraud by false representation.
Lawyers for Jenkins and Kalaris told the jury the case against their clients was misconceived, perverse and illogical and that there was no evidence the ASAs were a sham or fake.
In brief opening speeches before the prosecution continues laying out its case, they alleged the defendants believed the ASAs were genuine agreements to secure lucrative business for Barclays in the Middle East — a region it was keen to exploit.
They said the agreements were side deals during emergency fundraising that June and October that had been approved by internal and external lawyers and cleared by the board.
“The unequivocal, repeated advice was that this was legitimate — providing the ASA was a genuine contract for the provision of benefits to Barclays,” said John Kelsey-Fry, a senior lawyer representing Jenkins.
Jenkins, who will give evidence later, had pursued and won the trust of Sheikh Hamad bin Jassim bin Jabr Al-Thani, the former prime minister of Qatar, and wanted to unseat Credit Suisse as the wealthy, gas-rich Gulf state’s preferred bankers, the jury heard.
Had Jenkins considered a fraudulent deal with Sheikh Hamad, the sheikh might have rung up Barclays bosses and said: “Neither I nor QIA (the sovereign wealth fund) are putting a penny in a bank like yours. I will never do business with you again,” Kelsey-Fry said.
Qatar Holding, part of QIA, invested in Barclays alongside Challenger, Sheikh Hamad’s investment vehicle.
The case against Kalaris, meanwhile, hung on three conversations he had had with Boath on the afternoon of June 11, 2008, that the prosecution had “fundamentally misunderstood,” his lawyer Ian Winter said.
When Kalaris told Boath: “Noone wants to go to jail here” and that lawyers would provide “air cover,” he was trying to ensure that a genuine ASA would be approved by legal experts as a legitimate means of paying Qatar for real value, Winter said.
All three men, aged between 60 and 64, are charged over the June fundraising. Jenkins, alone, also faces charges over the October fundraising.
The trial is scheduled to last around five months.