Japan set to be prime destination for hi-tech military hardware

With Japan planning to develop the F-3, a dual use $40 billion fighter jet, UK’s BAE Systems, and U.S. Lockheed Martin, Boeing, and Raytheon are likely to reap in huge contracts for not only developing the F-3 but also for supplying military hardware to Tokyo, to fend off threats from China and its ally North Korea.

In a development that is likely to have a bearing on U.S. export of arms, Japan has decided to delay its decision to develop a new advanced fighter jet since its military planners are struggling to settle on its designs, said four sources familiar with the matter at hand.

The country has recently splashed out for new U.S. military hardware, including F-35 stealth fighter planes and ballistic missile interceptors.

Facing enemies at two fronts – one from North Korea and the other from China, Japan has come under increased pressure to improve its defenses.

Delays to the new fighter, known as the F-3, will raise questions over the future of what is likely to be one of the world’s most lucrative military contracts, estimated to be worth more than $40 billion to develop and deploy.

If a decision over the F-3 was to be taken after the first half of 2018, it would be too late to incorporate it in its new defense planning budgetary planning which is set to begin from April 2019.

“The direction is for the F-3 decision to be put back,” said a source with knowledge of the discussion, on the condition of anonymity as the person is not authorized to talk to the media.

Sources went on to add, the decision on whether to move ahead with the domestic program or opt for international collaboration, is likely to be taken after 2018.

“Regarding the F-3 decision, including whether we will delay a choice, we have haven’t come to any conclusion,” said a spokeswoman from Japan’s Ministry of Defense Acquisition Technology & Logistics Agency.

According to analysts’ estimates, the “initial cost” of developing the F-3 could be $40 billion.

With Japan’s defense budget being $50 billion with an annual hike of 1%, the outlay for the F3 is likely to be spread across several years and represents a significant undertaking.

This development comes at a time when Japan is spending record amounts on U.S. equipments coming from Lockheed Martin Corp, The Raytheon Company, Boeing Co and Textron Inc.

While these procurements have been portrayed as being necessary to counter nuclear weapons and ballistic missile threats from North Korea, Japan wants the F-3 to counter China’s growing air power where Tokyo and Beijing are locked in a territorial dispute.

In 2016-2017, Japan’s air force had to scramble a record 806 times to intercept Chinese planes. Thus the F-3 is likely to play a dual role. The F-3 will also provide Japan’s defense industry, especially Mitsubishi Heavy Industries (MHI) and its suppliers their first fighter jet program.

Japan’s F-2 fighter was built two decades ago.

Although domestic support for a domestic fighter plane is strong, many officials are worried on the huge costs to develop components for the plane from scratch. They prefer international collaboration, since it significantly reduces costs and brings in newer technologies.

“What we have now is a flying box” without all the systems that constitute a fighter such as weapons and sensors, said a source.

Potential partners include BAE Systems, Lockheed Martin and Boeing. All three have responded to initial requests for information from Japan’s Ministry of Defense which is overseeing the F-3 program.

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