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Loving the sound of this AAR, although it reminds me a little of Tom Clancy's Debt of Honour. I can't wait to see how it turns out!
It may be worth taking some of the rich micro states such as Singapore as they have high IC concentrated in small areas meaning less to conquer and maintain.
Not that I'm telling you how to do your AAR though.
 
@Razgriz 2K9: The territorial claims on the US are over Okinawa, which is under US control in this mod to represent the major US military bases located on the island. The claims on Russia meanwhile are over the Kuril islands, and I think Sakhalin island as well.

@Zhuge Liang: A very true assessment. Until I can field major naval and air forces of my own that can stand up to them, Japan will have to maintain its security agreements with the USA for a while.

@everybody else: thanks for the comments!

Japan, March 23rd, 2003. A heavily populated and highly industrialized group of home islands, Japan must expand and conquer if it is going to bring about a new Japanese era in the pacific.
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Japan's Ground Self Defense Forces by March 2003. The army, although very well equipped and well trained, is very small in comparison to Japan's population and in comparison to the armed forces of some of Japan's neighbours. The army's most powerful formation at the moment is the Northern Army, based in the less densely populated home island of Hokkaido, and includes a number of motorized infantry divisions, a field headquarters units, and an entire divisions worth of advanced Type 90 main battle tanks. The army will need massive expansion if it is going to stand a chance against the likes of China or either of the Korea's.
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Japan's Maritime Self Defense Forces, the Japanese Navy, are in somewhat better shape. Possessing large numbers of advanced destroyers and frigates, including a fleet of submarines, the Navy is a very potent force in Japan's arsenal. However, to stand a chance against the Chinese, Russian, or American fleets, the navy will require massive investments and a very extensive shipbuilding program, especially in areas such as Capital ships, including cruisers and most importantly, aircraft carriers.
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Japans Air Self Defense Forces are in similar shape. Possessing a mix of older and more modern aircraft, such as F-15J's, F-2's, and F-4EJ's, Japans air force is a potent arm of the Japanese military. The air force is centered primarily around achieving air superiority, with the bulk of its inventory being fighter aircraft, accompanied with a wing of transport planes for the Army's paratrooper brigade and 3 wings of naval attack bombers. Investments in the air force will most likely remain centered around fighter aircraft, with possibly some expansion of its ground attack role with the construction of strike fighters.
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Compared to many other nations around the world, Japan is very well off. Japan is very technologically advanced, with a very high GDP and very strong industries. Corruption is very low, something that helps to increase foreign investments into Japan. However, the economic outlook is still somewhat dim, with the entire global economy in a period of slow growth.
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March 25th, 2003. The United States, with the support of a coalition of its allies, has begun its long anticipated and strongly condemned invasion of Saddam Hussein's Iraq. US and Coalition forces are crossing the Iraq/Kuwaiti border, spearheaded by powerful armoured units and under the cover of huge air superiority. Already, Basra has fallen, while more US troops move towards Najaf en route to the Iraqi capital of Baghdad. Iraq's military meanwhile, is taking a pounding at the hands of the US and British air forces, which are decimating Iraqi combat formations all over the country to make way for further advances by coalition ground troops. Baghdad itself is also suffering from very extensive US air attacks.
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When Japan was re-established as an independent sovereign state in the aftermath of World War 2, its new constitution was designed to prevent Japan from ever taking part in a major war ever again. This was done through the implementation of a clause in Japan's postwar constitution, known as Article 9. Article 9 stripped Japan of a state's right to the use of force as an acceptable means of action in the international community. The article also bans Japan from manufacturing or maintaining powerful offensive weapons. These include Aircraft Carriers, long range ballistic missiles, means of offensive military power projection such as Marines, and most importantly, Japan is banned from ever manufacturing Nuclear Weapons. However, since the rise of "The Generals" regime in February 1999, article 9 has been viewed by many in the government and the population as nothing more than a nuisance, banning Japan from making an independent foreign policy or armed forces and tying it to the United States for defense. Japan's new leadership has long waited for a chance to get rid of article 9, something that the Iraq war may serve to do.....
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Japan's first research projects in March 2003. Japan's industries and companies are tasked with projects ranging from new capital warships for the navy, to things like new industrial materials and strike fighters for the air force.
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I like this AAR. Where did you get the modern sprites, they look nice.

I second this :)

Anyway, nice aar you have going here. I agree with the advice to expand, not too quickly though, could be dangerous.
 
Land forces will need to be expanded, while air force and navy are already quite impressive.
 
@Nathan Madien: having it start at year "1003" is a workaround by the MDS team to some problems they had getting the game to run in the 2000's and onward. At first I thought it would be a bit of a nuisance, but in fact you don't even notice it.

@OnFire: I got the sprites off a German HOI2 forum.

@Razgriz 2K9: Indeed I do, and you will see it very soon.

@everyone else: thanks for the comments!

Japan faces many challenges and possible rivals in its quest to rise to world dominance in the 21st century. Japan will undertake its new rise in a world that is full not only of tense conflict zones but also very powerful military and economic rivals.

One of these rivals is the NATO military alliance and its European members, joined together through the European Union. The EU is a possible growing power on the world political stage, with its member states creating strong social and economic ties and even integrating militarily through the European Union's powerful EU battlegroup formations. Japan may not fight the EU directly, but could expect to see European
Union and NATO members aid any of Japan's possible enemies with warships and aircraft.
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Below Europe is the continent of Africa, free of the shackles of European colonialism after decolonization in the last half of the 20th century. As far as Japan is concerned, the nations of Africa are of little threat if Japan were to expand its influence into the Middle East and the Indian Ocean. Instead, the nations of Africa are plagued with corruption, nepotism, and bloody inter-ethnic conflict. One of the results of these problems is the still raging Second Congo War, sometimes referred to as "Africa's World War" due to the numbers of nations supporting the belligerent's. Currently, the Congo is under increasing military pressure from its neighbours Rwanda and Uganda, both of which control large swaths of the country despite bitter fighting against the Congolese Army.
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Much closer to Japan is a much more serious security problem, that being the tense relations between rival nuclear weapon states India and Pakistan. Both nations have been locked in hostility over control of the contested Kashmir region in the north, hostilities that have led to India and Pakistan waging multiple wars against each other. It is more than likely that in the future, Japan will have to find a way to deal with both states, which possess very large standing military forces.
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Another area of international tensions is the ambitions of the Islamic Republic of Iran, a modern Theocratic Islamic state established after the overthrow of the Shah in 1979 during the Iranian Revolution. Iran has been labeled as a member of the "axis of evil" by the United States, along with Iraq and North Korea, and is currently embarking on a very serious nuclear program, based in the south of the country. Time will tell to see what this means for the future of the region.
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Currently, the role of global superpower is taken up military Goliath and former wartime enemy of Japan, the United States of America. Lead by Republican president and former governor of Texas George W Bush, the United States has begun to heavily assert its influence internationally in recent years, occupying Afghanistan and now embarking in an invasion of Iraq. Currently, the United States is Japan's ally, but eventually Japan and the United States will at some point have to come to blows with each other yet again for dominance of the Pacific ocean. For now however, Japan will have to operate under the USA's eyes until that time comes.
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Japan however is not the only state that is looking to dominate Asia and the Pacific ocean. To the west is the rising red dragon of the Peoples Republic of China, established in 1949 after the victory of Mao's red army against the nationalist forces of Chiang Kai Shek, forced to flee the mainland to the rump state of Taiwan, where the Chinese nationalists have continued to govern thanks largely to the protection of the United States. China's economic rise is beginning to translate into a greater military capacity, especially in the air and at sea. There is no doubt that Japan will have to battle China once again if Japan is going to establish its hegemony over the Pacific.
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The final region Japan must keep its eye on is the Korean peninsula. Here, two nations, North Korea and South Korea, stare each other down over a tense demilitarized zone that separates the peninsula. Both sides are armed to the teeth, possessing huge arsenals of tanks, artillery, missiles, aircraft, and massive standing armies. If Japan is going to create a new empire, both Korea's will need to be struck down at some point in the future, something that will surely not be an easy thing to do.
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Maybe you should try get the Koreas when they are fighting one another?
Although that probably would mean they would at that point be in NATO and SanPact.
EU is something you shouldn't need to worry about unless you get involved in European warfare, definitely China should be top of the hit list as it is navally fairly weak at the start and only get's stronger.
Strike while you have the chance!
 
Great overview!

Btw, will Japan try to expand her influence into Africa, like modern China is doing IRL? It would be great if you would get some bases in Madagascar. Wasn't Japan interested in Vichy French Madagascar during WW2?