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As part of its structural reform policy, the administration of Prime Minister Junichiro Koizumi has urged local governments to become independent under the slogan that what can be done by local governments should be done by them.

But at the same time, a growing number of communities are suffering from financial difficulties amid the rapid aging of the population.

According to a survey by Kyodo News and its member newspapers covering the heads of 1,890 local governments nationwide, there is serious concern about the prospects for regional economies and managing local governments. The response rate was 99.7 percent.

Most farmers in Takasu, a town with a population of about 7,500 in central Hokkaido, are elderly and do not feel optimistic about the future. The construction industry, the base of the regional economy, sees no recovery ahead due to the reduction in public works projects.

Takasu Mayor Setsuo Sato is growing increasingly concerned. “The sluggishness of the construction industry is leading to an outflow of young workers to major cities, bringing a labor shortage to the agriculture industry,” he said.

The survey found that 53 percent of local governments fear believe their regional economies will worsen, against 44 percent that expect improvement.

Seventy percent of the heads of local governments in Saitama Prefecture said their economies will get better, as did more than 60 percent of those in Tokyo and Aichi, Tochigi and Shizuoka prefectures.

In contrast, 83 percent in Hokkaido see worsening economic times ahead, and a majority in Kochi, Akita, Tottori and Aomori prefectures were also pessimistic.

Since taking over five years ago, the Koizumi administration has made efforts to rejuvenate major cities and promote the information technology industry, but it has reduced public works projects by 3 percent annually since fiscal 2003, resulting in sluggish regional economies.

Koizumi’s reform policy has been welcomed by the leaders of major cities.

Yukio Takano, mayor of Toshima Ward, Tokyo, said, “Regional communities and the Japanese economy have been rejuvenated by the originality and ingenuity of local governments and the private sector with the creation of structural reform special zones.”

But Toshiyuki Uemura, mayor of the town of Kamishima, Ehime Prefecture, said, “Rural areas are left behind.”

Sixty-five percent of all local government heads said they do not support the reduction in public works projects. The rate was 72 percent for town and village chiefs, indicating smaller areas are dissatisfied with the reform policy.

The farm industry, essential in less-populated areas, is facing dire business straits.

“There is a gap between agriculture and other industries. The central government should take measures to secure agricultural income,” said Reisho Agari, mayor of Shuuho, Yamaguchi Prefecture.

“Traffic infrastructure and the agriculture, forestry and fisheries industries should be strengthened,” said Mitsutoshi Manago, mayor of Tanabe, Wakayama Prefecture.

Toyoaki Obara, mayor of Ninohe, Iwate Prefecture, said, “Employment and individual income are not increasing, and shops in the region are closing down. Eventually, there will be no shops.”

Koji Seki, mayor of Saza, Nagasaki Prefecture, said, “The Koizumi Cabinet is undoubtedly considering letting rural local areas fall by the wayside.”

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