Japan's Defense Ministry has proposed a record budget of 8.5 trillion yen (approximately $59 billion) for the upcoming fiscal year, marking a significant step in the country's defense strategy. This proposed budget aims to strengthen Japan's deterrence on its southwestern islands in response to increasing threats from China, while also addressing challenges posed by a declining military workforce due to the nation's shrinking population.

The proposed budget for 2025 is part of Japan's ambitious five-year military expansion plan, which is designed to significantly increase annual military spending. The country's goal is to spend a total of 43 trillion yen (about $297 billion) by 2027, ultimately doubling its annual military expenditure to around 10 trillion yen. This would make Japan the world's third-largest military spender, following the United States and China.

The Defense Ministry's budget request, which was approved in a meeting on Friday, will be submitted to the Finance Ministry for further negotiations through December.

In recent years, Japan has been rapidly enhancing its defense capabilities in the southwestern region due to rising military threats from China and escalating tensions in regional waters. China has increased its maritime activities, including confrontations with Philippine coast guards in the South China Sea and regular incursions by coast guard vessels into Japanese-controlled waters around disputed islands in the East China Sea.

A significant portion of the proposed budget, amounting to 970 billion yen (about $6.7 billion), is allocated for improving Japan's strike capabilities. This includes developing and purchasing long-range missiles and the necessary equipment for their deployment, such as those from an Aegis-class destroyer. Additionally, around one-third of this amount is earmarked for enhancing satellite capabilities to monitor missile-related activities, given the advancements in hypersonic missile technology by North Korea, China, and Russia.

In response to a shrinking pool of military personnel, Japan is focusing on increasing its use of drones for both surveillance and combat. The Defense Ministry has requested 103 billion yen (approximately $710 million) for drones and 314 billion yen (about $2.17 billion) to build three new multi-purpose destroyers, each requiring a smaller crew of 90 members compared to the current standard.

Defense officials view combat drones as "game changers," capable of undertaking extended missions and reducing human casualties. This technology is seen as a crucial element in Japan's military expansion, particularly as the country grapples with an aging population and a declining number of younger recruits.

Japan's Self-Defense Forces (SDF) are struggling to maintain their target troop levels of 247,000 due to difficulties in attracting young recruits. The SDF met only half of its recruitment goal of 19,598 last year, marking the lowest recruitment figures in its 70-year history. Additionally, there was a notable increase in mid-career personnel leaving the force, with 6,258 departures last year, the highest in three decades.

The Defense Ministry's interim report highlights that Japan faces a significant labor shortage due to declining birth rates and a shrinking working-age population. To address this, the ministry is investing in new technologies and organizational reforms. This includes requesting 18 billion yen (about $124 million) for AI surveillance systems at 40 SDF bases, which would free up 1,000 personnel, and 4.3 billion yen (approximately $29.7 million) for automated supply storage.

In light of recent scandals, including sexual harassment and corruption, the ministry's interim report also calls for reforms to improve salaries, working conditions, and support for working mothers to attract more women into the armed forces.

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