Japan Press Weekly

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2015 October 7 - 13 [POLITICS]

Public funds may be used to insure companies against losses in arms exports

An advisory panel to the Defense Ministry has published a report proposing that the Abe government consider utilizing the government trade insurance body to promote arms trade, suggesting the possibility of the use of public funds to compensate firms for any potential loss in profits from arms exports.

Nippon Export and Investment Insurance (NEXI) is a governmental body covering losses in trade and overseas investments caused by wars, natural disasters, and cancellation of contracts by foreign governments.

Insurance capital is funded from premiums paid by policy holding exporting/importing companies. However, in the 1980s and 1990s the government provided taxpayer money from the general account to the insurance funds in order to cover the huge deficits associated with the large insurance payouts due to the debt crisis in Latin America and the Gulf War.

The Ministry of Economy, Trade, and Industry (METI) admits that debt collection is difficult in some cases. In that event, tax money would be used to bail out the “merchants of death”. The Abe government, which bulldozed the war legislation through the latest Diet session, has blatantly displayed its willingness to give special favors to the war industry by guaranteeing that that will remain profitable.