The municipal survival cluster

Since the 1960s, the government has — at an interval of roughly a decade — compiled long-term plans for development of the nation’s social capital that covered the next 10 to 15 years, with each one of the plans reflecting the changing economic challenges of the times.

The first Comprehensive National Development Plan, adopted by the Cabinet in 1962, set goals to be achieved by 1970. It aimed for balanced development among different regions in Japan and called for creation of new industrial cities outside of existing clusters.

The fourth such plan, adopted in 1987, and set goals for the years up to 2000, aimed for a “multipolar” development of the country and called for building a nationwide network of expressways stretching 14,000 km.

Up to a certain point, these plans were credited with improving convenience for many rural parts of Japan, promoting reallocation of industries and job creation outside of major urban areas.

Even though they may have placed too much emphasis on development, such plans contributed to some extent to putting the brakes on excessive concentration of the nation’s economic resources on Tokyo.

In more recent years, however, these plans have become a target of criticism for breeding wasteful public works spending in rural areas and rigid allocation of the government’s budget. The proposals lack specifics, and are not producing much in terms of concrete results.

Today, Tokyo continues to attract people, resources and capital from around the country, while rural economies become increasingly depleted.

As the aging of Japanese society and fall in the nation’s population accelerates, it is becoming harder to devise plans for rural parts of the country. A recent think tank estimate warned that because of rapid depopulation, roughly half of the nation’s municipalities will face the danger of extinction in coming decades. The nation’s economic vitality could become endangered if the ability of rural Japan to supply urban areas with young people dries up. The government should once again come up with a national plan with specific proposals on how to keep up and develop rural communities.

One idea being floated separately by some ministries merits attention as it calls for creation of regional clusters of municipalities that support each other. Many municipalities in rural areas are so financially strained that they find it increasingly difficult to provide full administrative services for local residents and businesses.

On the other hand, many of these municipalities remain averse to the idea of merging with one another. Plans floated by the internal affairs ministry, the land ministry and the economy and trade ministry call for creation of regional municipality clusters, each having a midsize city at its core with a population of 100,000 to 200,000 people.

The core city, in which the region’s administrative, medical and educational functions of the region will be concentrated, will provide jobs for local youths and deter the further exodus of the population to larger urban areas.

Smaller municipalities will be given different roles in the division of labor within the cluster. The municipalities will share such public facilities as hospitals, libraries and gyms, which would help them reduce administrative costs.

To increase job opportunities for the local population, efforts need to be made to attract businesses to invest in such areas. Cuts in corporate taxes on companies investing in rural regions should be considered.

Transferring business operations to rural locations should also be encouraged from the perspective of reducing the vulnerability of big businesses, which are concentrated in urban areas, to major disasters such as earthquakes.