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The Diet has enacted a law to facilitate the largest-ever realignment of U.S. forces stationed in Japan. The law, supported by the Liberal Democratic Party and Komeito and opposed by the Democratic Party of Japan and three other opposition parties, reflects Prime Minister Shinzo Abe’s determination to implement as soon as possible the realignment as agreed by the Japanese and U.S. governments in May 2006. The basic plan for the realignment calls for the completion of all realignment projects by the end of 2014.

The law’s “carrot and stick” approach to municipalities hosting or located near U.S. military facilities, however, carries the danger of undermining the principle of local autonomy and is likely to cause resentment among some municipalities. The law also leaves room for the government to use discretionary power to determine how the law should be applied to particular situations.

Under the new law, the government-affiliated Japan Bank for International Cooperation can provide investment and loans for the planned transfer of the headquarters of the 3rd Marine Expeditionary Force, together with about 8,000 U.S. Marines and 9,000 dependents, from Okinawa to Guam. It was earlier reported that Japan would shoulder 730 billion yen of the total cost of 1.2 trillion yen, which would include the cost of building houses for the marines and their families. During the Diet discussions, the government was unable to say how much Japan will have to shoulder or give details of the cost. This is regrettable since paying for construction of a U.S. military facility abroad is an unusual step and the project involves a huge sum of money.

The law’s main feature is the use of subsidies as bait for inducing municipalities to cooperate with the realignment plan. The government will provide state subsidies to municipalities conditionally and incrementally in four stages by taking into account their degree of cooperation. Under the law, the defense minister will designate municipalities eligible for the subsidies due to the added burdens that realignment will place on them.

The government will increase the amount of subsidies as the municipalities go through the following four stages: (1) the announcement by the municipalities of their readiness to accept a realignment project, (2) the start of environmental impact assessment, (3) the start of facility construction work and (4) the completion of the work and the start of the operation of the facility. When the burden of municipalities is especially high, the central government will additionally beef up subsidies for their public works. The law will be in effect through the end of March 2017. But if the realignment hits a snag, the subsidies may be continued for up to five more years

The new approach is a departure from the government’s traditional approach to municipalities hosting or located near U.S. military facilities. The government used to provide uniform subsidies to municipalities that accepted U.S. facilities. The change in the approach was prompted by the government’s experience with the 1996 report of the Japan-U.S. Special Action Committee on Okinawa. The SACO report contained a plan to return or transfer 11 U.S. facilities in Okinawa, including the U.S. Marine Corps’ Futenma Air Station in the the city of Ginowan on Okinawa Island.

Generous regional development programs were carried out in the northern part of the island in anticipation of local cooperation for the smooth implementation of the report, especially the transfer of the Futenma facility. Officials of the Defense Ministry are resentful because the transfer of the air station did not materialize despite the generous programs.

One problem with the law is that the criteria for choosing municipalities as subsidy recipients are unclear. This ambiguity concerns Nago, in northern Okinawa. The realignment plan calls for the relocation of Futenma Air Station to Camp Schwab at Cape Henoko in Nago, where two runways will be built in a V shape on part of the camp and on reclaimed land in adjacent waters. The city, however, has asked that the runways be built further offshore. While Defense Minister Fumio Kyuma is of the opinion that the city is still eligible for the subsidies, some Defense Ministry officials disagree.

Another problem is that the law could divide a municipality’s residents. The government has already decided to suspend subsidies for construction of a new city hall in Iwakuni, Yamaguchi Prefecture, because the city’s mayor, on the strength of a referendum result, opposes a plan to relocate 59 U.S. carrier-based aircraft to his city. But the city assembly has recently adopted a resolution virtually accepting the relocation plan.

Even though the law has been enacted, the government should refrain from a highhanded approach that would only increase the schism between it and local governments concerned and cause uneasiness among local residents.

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