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Wasteful spending in Tohoku

Along the beaches of Kesennuma, Miyagi Prefecture, which used to boast popular resorts, a colossal seawall is nearing completion, measuring 14.7 meters high, 9 meters thick at the base and 5 km long. This is but one of many wasteful construction projects being carried out under the pretext of rebuilding the areas in northern Japan devastated by the March 2011 earthquake and tsunami.

Almost five years after the disasters, there are many projects under way that waste huge sums of taxpayer money and benefit only a handful of construction firms and individuals who have sold their land to make way for such ventures. As if by coincidence, law enforcement authorities have taken action over bid rigging among paving companies involved in expressway construction.

Why is such a huge seawall being built in an area of Kesennuma that is mostly rice paddies? A local source confides it is because municipal assembly members, local powerful figures and those close to them sold the land to the central government at a high price. An estimated ¥2.5 billion is said to have been paid by the government to the property owners for the otherwise worthless land on which the seawall is being built.

The total cost for building the 5-km seawall was initially set at ¥23 billion but has now ballooned to ¥36 billion. This is but a small portion of an overall coastal seawall construction project stretching over 400 km in Iwate, Miyagi and Fukushima prefectures, the total cost of which is budgeted at ¥1 trillion.

As of last fall, only 17 percent of the project had been completed. Even though more than 80 percent of it can still be canceled, neither the central government nor the prefectural and municipal governments have any intention of suspending the project.

Another wasteful reconstruction scheme relates to relocating tsunami victims to higher ground. One such project being pushed by the city of Higashi-Matsushima, Miyagi Prefecture, envisages developing a hillside area to accommodate 450 houses. But the cost for the land redevelopment alone is ¥40 billion, or some ¥100 million per house — a figure that befits only the most luxurious residential area.

Even if this project is completed, there are many people who initially welcomed the plan but have found it impossible to build their own house in the area. This is because, according to a member of an association of tsunami victims, the cost to build a house has gone up 50 percent from the initial estimate of ¥15 million.

The Miyagi Prefectural Government, meanwhile, is building 15,000 houses under a seven-year, ¥180 billion plan. As of the end of last year, about half had been completed. But 16 of the 21 municipalities where those houses were built are plagued with vacancies since many of the more than 20,0000 quake victims currently living in rent-free temporary housing facilities are refusing to move into these permanent houses. As construction work continues on the remaining 7,000-plus houses, the vacancy rate is bound to increase, rendering it foolish to put any more money into the project.

A total of ¥3.5 trillion in public money is to be poured into areas devastated by the quake and tsunami to build housing facilities or to move people to higher ground. But the results of this spending spree are characterized by huge seawalls resembling prison walls, redeveloped highland areas where only a small number of houses have been built and housing with high vacancy rates.

Another sector in which public money is being wasted is road construction. Many plans for new roads, which had been submitted before the 2011 disasters, are now resurfacing as if to ride on the coattails of the massive reconstruction projects.

One example is a 100-km road to connect the inland city of Morioka and the coastal city of Miyako, both in Iwate Prefecture. Local residents had clamored in vain for the new road for more than two decades. After the disasters, however, money was suddenly allocated for the road, ostensibly for the purpose of securing emergency transport.

Similarly, the Ministry of Land, Infrastructure, Transport and Tourism is pushing a new coastal “reconstruction highway” linking Miyagi and Aomori prefectures.

Such reconstruction projects have brought big benefits to many players in the construction industry — and not just major general contractors but also smaller regional firms. Hashimototen Co., for one, has grown rapidly in the post-earthquake years to become the second-largest contractor in Miyagi Prefecture in terms of completed construction projects, thanks to its close connection with a powerful Liberal Democratic Party Lower House member — Akihiro Nishumura, a former vice minister of reconstruction — and other LDP lawmakers.

A suspicion has reportedly arisen that Hashimototen conspired with third-ranking Maruhon Gumi Corp. to split a pair of tunnel contracts so that each could build one for about ¥1 billion.

Major general contractors are also suspected of collusion. In the immediate aftermath of the earthquake, Hazama Corp. and Maeda Corp., both of which have footholds in the Tohoku region, won many contracts for debris removal. According to a local construction industry insider, this prompted leading general contractors to ask LDP lawmakers to coordinate construction orders for reconstruction projects.

As if to prove that notion, contracts for huge reconstruction projects have all been won by majors like Kajima Corp., Shimizu Corp. and Taisei Corp. Local firms that have been chosen as subcontractors by the majors have prospered so much that their executives are buying expensive cars like Mercedes to reduce their tax payments, says an insider close to a major general contractor.

The very root of this and other unethical conduct in the tsunami-hit areas appears to lie in the staggering ¥26 trillion to be spent by the central government in the first five years following the disasters. If the local governments are not required to bear any cost, it is logical that they won’t worry if the money is going to waste.

Last year, the Reconstruction Agency sought to oblige the prefectures and municipalities to bear part of the cost but faced bitter opposition and was criticized for “bullying the disaster victims.” In the end, it was decided that they will shoulder no more than 3 percent of the total spending. For example, the construction cost of the Sanriku Expressway linking Sendai with Miyako will be wholly shouldered by the central government. A member of the Miyagi Prefectural Assembly, speaking on condition of anonymity, said that the ¥26 trillion has “spoiled” the three prefectures hit hardest by the disasters — Fukushima, Miyagi and Iwate.

The situation in Fukushima Prefecture is complicated by the nuclear crisis, which forced residents near the affected power plant to flee. Even though the evacuation order was lifted last September for the town of Naraha, more than 2,000 former residents had not returned as of Jan. 14, choosing instead to remain in the city of Iwaki.

Currently they are receiving monthly compensation of ¥100,000. A local newspaper reporter said that many of those continuing to remain in temporary housing units are likely to become public welfare recipients after they have used up the compensation money.

It is true that there are local residents who are still suffering from the effects of the March 2011 disasters. But now that five years will soon have passed, attention should not be turned away from the reality of the devastated areas. Continuing to lavish funds on the victimized areas will only result in money collected from taxpayers from all over the country disappearing into the dark — a world that has nothing to do with reconstruction in the true sense of the word.

This is an abridged translation of an article from the February issue of Sentaku, a monthly magazine covering political, social and economic scenes.

  • kayumochi

    The wasteful spending in Tohoku started long before 3/11: in Iwaki-shi in the early 1990’s a recreational “marine park” was constructed. In additional to all the concrete that was poured for the structure, white sand was trucked in and dumped to create an artifical beach (where there already was a natural one) and palm trees planted to give the area the look of its Australian Sister City. Within months the first storm washed away the expensive white sand. The palm trees died soon after. And within a few short years sand blowing across the beach had covered large swathes of the concrete structure which was already showing signs of decay.

    • A.J. Sutter

      This is not very pertinent to the topic of the piece.

      • kayumochi

        I feel the same way about your comment. You seriously believe that Reagan-era rhetoric influences blog posts written in 21st century Japan?

      • A.J. Sutter

        Yes. Although coined in 1974, it came to prominence in Ronald Reagan’s unsuccessful 1976 presidential campaign and has remained a trope of modern political discourse (in the more gender-neutral guise of the “welfare cheat”) to the present day, not only in the US Republican Party but with conservative politicians in many wealthy countries, including the UK, Australia and Japan. The technique is this: some rare bona fide (or fabricated) cases of cheating by recipients of some form of government assistance are given a degree of attention and indignation way out of proportion to their frequency, thereby casting suspicion on those who really do need the aid, and justifying a reduction in government assistance expenditure. E.g. this paper reported that in October of 2015 newly-appointed minister Kono Taro vowed to crack down on people who come to Japan just to receive welfare — how large a class is that? An analogous process of damning a whole class of people because of the rare bad actor was seen in the Japanese manga artist who recently tried to portray all Syrian refugees as freeloaders or terrorists. The author of the present piece is trying to cast suspicion on all further expenditures in Tohoku because of a few cited cases of “waste.” It’s the same technique.

      • kayumochi

        I understand all that but I doubt that American political rhetoric has influenced discourse in Japan. It may be the same technique but there is no relationship between the two.

      • A.J. Sutter

        On the contrary, I suggest that the very direct relationship between them is the discourse of neoliberalism, which Reagan (along with Margaret Thatcher) was the first to import into the government of an OECD country, and which PM Koizumi and his right-hand man Takenaka Heizo imported into Japan from the US in the early years of this millennium.

      • kayumochi

        All this is far less pertinent than my initial comment …

      • A.J. Sutter

        So it’s worth reviewing the genesis of it: Your comment on the situation after 3/11, which was about reconstruction of a region where well in excess of 10,000 people died, wiping out entire communities and destroying families and businesses, was to talk about a recreational marine park built 20 years earlier. You were also the one to contest the reference to a particular kind of discourse that is intended to reduce aid to those in need. Actually, although I disagree with you about the relevance of the discourse, I think the discussion that your criticism precipitated was far more pertinent to the article than the loss of palm trees 20 years ago. So, thanks.

      • kayumochi

        Will you be boring us again by opening up about your sexuality next? My point was that money has been poured down the drain for decades in Tohoku therefore why would that change because of the devastation of 3/11.

      • kayumochi

        I feel the same way about your comment. You seriously believe that Reagan-era rhetoric influences blog posts written in 21st century Japan?

      • kayumochi

        I feel the same way about your comment. You seriously believe that Reagan-era rhetoric influences blog posts written in 21st century Japan?

  • A.J. Sutter

    I write from Iwate-ken. Basically this piece is in the tradition of the Reagan-era “welfare queen” rhetoric: the waste of money is much more important than the suffering of people. From the headline I’d thought the author would be calling for real, substantive help in Tohoku, but instead this seems to be arguing that it’s been five years already and so it’s time to move on. Five years after the tsunami and there are still people living in temporary housing in Tohoku — but “the reality of the devastated areas” is that money is being wasted on concrete?

    I’m especially struck by the suggestion that it’s a waste of money to move residents to higher ground. Where else are they supposed to go? Yes, sea walls are a bad idea. Yes, relocation costs might have been estimated better in some areas, and some areas might have been better thought-through. Rikuzentakata especially had a giant earth-moving scheme that looked like something from a science-fiction movie, in cooperation with Tokyo-based corporations and real estate speculators. But Onagawa’s move has been more successful, and the community still has tremendous solidarity. Meanwhile, most of the pre-tsunami smaller communities today are simply barren ground, with a few memorial markers.

    The fact is that the central government and Tokyo-based organizations have seriously mismanaged the funds available. A financial institution was set up for disbursement of emergency funds, but Tokyo bankers were put in charge, and set criteria that were impossible to meet. E.g., one company I know whose president and equipment were lost in the tsunami were grilled about why their financial results weren’t good in 2011 and 2012 — and they got nothing from the fund. Facilities for housing constriction workers were never built along the coast — my understanding is that this was a result of approvals getting hung up at the central government level, not locally. This is also one reason why making it easier to get from Morioka (the prefectural capital) to Miyako might be important. By the way, the Diet Lower House district that includes Miyako happens to be the only one in Iwate that’s controlled by the LDP.

    Not that there’s much more that can be done for a few years – the Tokyo Olympics have taken care of that. My wife and her siblings want to rebuild the house of my parents-in-law in Morioka: we’ve been told that thanks to the Olympics, materials and labor won’t be available until at least late 2019. Talk about “money collected from taxpayers from all over the country disappearing into the dark” — a dark that many Tohoku residents still endure.

    • Starviking

      I always wondered why the push was to “rebuild the devastated communities”, which was a phrase of heard on TV during the start of the reconstruction effort. Tohoku is an area with big problems of depopulation and poverty. A much better idea would be to re-cast the communities, renew Tohoku.

      • kayumochi

        What does that mean, “re-cast the communities, renew Tohoku?” Is that not the same thing that money has been wasted on in Tohoku for decades?

      • Starviking

        Sorry, that was very sound-bity – apologies. What I meant was that instead of just recreating what was there (and dying) before the tsunami, taking a long hard look at how sustainable communities could be built up in Tohoku.

        Looking at depopulation, the effects of the climate, how a good economy could be instituted, whether better transport links could help, etc.

      • kayumochi

        I like to think that the Japanese government could implement what you describe but if a disaster like 3/11 doesn’t light a fire under their collective ass, what will? Tokyo being completely destroyed by an earthquake?

      • A.J. Sutter

        That’s certainly the economics point of view, and recent government “new growth strategies” have adopted a similar point of view by proposing to hasten the depopulation of the countryside and herding everyone into major regional cities. But that ignores the sociology: people feel attachment to place, have a history, culture and local dialect, etc. In the case of the Tohoku coast, at least along the Sanriku section there were settlements in separate coves and each had a different character (which is still visible when one see how different towns have reacted to 3/11, as one drives along the coast highway today). By analogy: Iwate Prefecture is just a bit smaller than New Jersey. Yet despite being one of the smallest states in the US, New Jersey has at least six different regions: Gateway, Shore, Atlantic City, Southern Shore, Delaware River and Skyland. Many families have had their roots in Iwate since long before the English settlement of New Jersey (to say nothing of NJ’s current population, descended from more recent immigrants). Even today, differences between the Date-han and the Nambu-han, dating back to the dawn of the 17th Century, play a significant role in the politics of the region. However rational or irrational one might think that to be, it’s part of the facts on the ground.