Prime Minister Shinzo Abe is putting priority on his new policy of rejuvenating the stalled economies of regions outside Tokyo, many of which are stuck in long-term slumps and suffering from rapid depopulation.
Abe plans to draw up a road map by the end of the year for tackling rural depopulation through 2020. His government also intends to set up a special fund that can be flexibly used by stagnant municipalities.
But the new initiative is being panned by experts and former bureaucrats from the areas, who say the plan just looks like another half-baked economic initiative from the ruling Liberal Democratic Party.
LDP-led governments have injected trillions of yen into gigantic public work projects to build roads, bridges and other infrastructure over some five decades of nearly uninterrupted rule, but the party’s traditional emphasis on public works has failed to stop the long-term decline underway outside Tokyo, Osaka and other big cities.
Hundreds of towns, villages and smaller cities are considered by experts to be on the verge of “extinction.”
“Basically it’s good to emphasize the promotion of provincial economies . . . but (the government) should be extremely careful about implementation,” said Takao Komine, an economics professor at Hosei University who was formerly a senior official in the now-defunct Economic Planning Agency.
“Otherwise, it will just repeat the (LDP’s) past failures,” Komine warned.
Komine argued it’s impossible to save all of the towns in decline nationwide. The Abe administration should thus concentrate on investing public funds in certain “core cities” — an extremely difficult political task.
“You can’t save everybody. It’d be very difficult to choose which municipalities to concentrate on,” Komine said. “If you follow the past pattern, it would just mean scattering money around.”
He was referring to the LDP’s reputation for relying on pork-barrel politics in rural areas.
One of the most notorious cases was Prime Minister Noboru Takeshita’s Hometown Creation initiative in 1988 and 1989, which doled out ¥100 million each to about 3,300 municipalities nationwide to fund promotional efforts.
Most of the towns had no idea what to do with the cash, so many blew it on building unnecessary public facilities. Takeshita’s Hometown Creation project is now considered a landmark LDP policy failure.
According to the Finance Ministry, the other ministries have requested a total of ¥3.8 trillion for a special budget fund for fiscal 2015. A large chunk of that would go toward public work projects, one of the tools most favored by LDP politicians eager to grease palms in their electoral districts.
Abe, who seems to be well-aware of the criticism, has repeatedly stressed that his administration will not engage in pork-barrel spending.
“By eliminating the sectionalism in ministries and the practice of doling out funds, I’d like you to work on policies of a different dimension,” Abe told his ministers and economic revitalization experts during his reshuffled Cabinet’s inaugural meeting on Sept. 19.
But former Tottori Gov. Yoshihiro Katayama, a Keio University professor who is an expert on local governments, argued that Abe’s plan is still grounded in the LDP’s postwar paradigm of centrally controlling and dishing out money for local projects.
Abe instead should first decentralize decision-making and financial resources so rural municipalities can use funds at their own discretion, Katayama said.
“The central government should stop assigning money (to municipalities), while (local governments) shouldn’t have to beg for money from the state. Such methods have totally failed in the past,” Katayama said. “But it seems (Abe) hasn’t understood that at all. I believe (his new policy) will end being a failure, too.”
One thing, if any, that differentiates Abe’s policy from the past LDP strategies is its focus on the depopulation problem. The government plans to develop a vision for keeping Japan’s population above 100 million for the next 50 years.
According to an estimate released in May by the Japan Policy Council, an influential Tokyo-based think tank, nearly half of the nation’s municipalities could face extinction by 2040 from rapid aging and an exodus to urban areas, notably Tokyo and Osaka.
The ratio of job offers to job-seekers in Tokyo stood at 1.62 in July, but it was much lower outside the capital, with figures of 0.87 in Hokkaido and 0.74 in Kagoshima, for example, meaning that workers in rural areas have fewer job opportunities than those in Tokyo.
This gap is the main driver behind the migration of the younger generations to big cities, officials said.
Yet couples in urban areas tend to have lower birth rates, which is consequently driving down the nation’s overall birth rate, they added. For example, Tokyo’s total fertility rate, a key indicator of birth trends in a given year, stood at 1.06 in 2011, versus the national average of 1.39.
TFR is the number of children a woman would have if she were to bear children throughout her life in line with age-specific birth rates of a given year.
A state-sponsored bill in the Diet would oblige the central and local governments to draw up programs and specific targets for “correcting excessive population concentration” in the Tokyo metropolitan area by creating social infrastructure and job opportunities in rural districts.
But Komine of Hosei University argued that depopulation and rural revitalization should be treated separately. People are migrating for the potential economic benefits, and the government should not try to stop them, he said.
“If you want to stem the decline of the birth rate, you should take countermeasures in Tokyo, where the birth rate is low,” instead of promoting rural economies, Komine said.
For example, the Abe government should build more day care centers to help working women in Tokyo, he said, because Tokyo has more young women than provincial areas and thus would be more effective in pushing up the overall birth rate.