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Japanese Budget Calls for Growth : Plan Includes More Spending for Military, Third World

December 29, 1987|From Reuters

TOKYO — Japan adopted a $460-billion budget Monday designed to mend the government's debt-ridden finances while satisfying U.S. demands for greater military and Third World spending.

The budget, adopted at a special cabinet meeting, calls for the government to increase its military outlays by 5.2% to $30 billion in the fiscal year beginning next April. Third World aid will be increased by 6.5% to $5.65 billion.

Faced with huge budget and trade deficits, Washington has been pressing Japan to play a greater role in its own defense and in helping poorer countries develop their economies.

Thanks to a booming economy and stepped-up tax receipts, Japan looks able to meet those demands while fulfilling its own goal of putting its fiscal house in order by slashing its issuance of new bonds.

The budget must be passed by Parliament, but political analysts said that its approval is virtually guaranteed by the government's huge majority in both houses.

The 1988-89 budget is 4.8% higher than the original 1987-88 budget plan, but less than the $471 billion the government will spend this year.

A supplementary budget was passed earlier this year to meet overseas demands for higher Japanese economic growth.

Fastest Growing

A government official said the planned spending next year should ensure that the government reaches its official target of 3.8% economic growth in 1988-89. That would make Japan the fastest-growing major nation next year.

Washington has been urging Japan to grow more quickly and import more in order to reduce its mammoth trade surplus.

Prime Minister Noboru Takeshita's government has decided to boost overseas development aid to $5.65 billion in the 1988 fiscal year starting next April. The increase is a hefty 40% in dollar terms because of the appreciation of the yen.

Research Funds

The Foreign Ministry wants aid to reach $7.6 billion a year by 1990.

Asian countries will receive about 70% of Japanese aid in fiscal 1988, while African, Latin American and Middle Eastern nations will each get about 10%, a Foreign Ministry official said.

Defense spending will account for 1.013% of Japan's projected gross national product next year, the second consecutive year that Japan's defense bill will top 1% of GNP, a self-imposed ceiling established in 1976 but scrapped last year. The defense budget for the current fiscal year, which ends next March, totaled 1.004% of GNP.

The Defense Agency's shopping list for next year includes a destroyer and computer-enhanced anti-submarine helicopters for the navy and land-based anti-ship missiles for the army.

Initial research fees were also approved for Japan's next-generation jet fighter, to be jointly developed with the United States and based on the General Dynamics F-16 aircraft, and over-the-horizon radar. The government also approved research funds for an advanced anti-ship missile.

The budget includes initial sums for a joint anti-submarine warfare center in Yokosuka, south of Tokyo, in conjunction with the U.S. Navy.

The Defense Agency budget bill also calls for a 26.4% increase in Japan's contribution to the payment of Japanese workers on U.S. bases here, pledged by the government of Yasuhiro Nakasone as part of an increase in Japan's overall commitment to the U.S. security role in Asia and the troubled Persian Gulf.

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