Although reconstruction of the areas hit by the March 11 triple disaster has been making slow progress, the reconstruction efforts should soon shift into full gear. Most of the ¥19 trillion funds believed to be needed for the reconstruction has been secured. The Reconstruction Agency will be up and running in February. The central government is expected to start providing grants in March to local governments that have drawn up community development plans. Concrete projects such as moving communities to higher areas are expected to start in April. In the coming two or three years, both the central and local governments concerned must develop a concrete foundation and direction for stabilizing the lives of those affected by the disasters.

The central government must provide its full support for local governments as they work out detailed plans for reconstruction. Because many of these local governments are suffering from a shortage of personnel with experience in developing reconstruction projects and ordering the necessary materials, they may have to entrust some of the work to the private sector.

Local governments should ensure that local firms are awarded the bulk of reconstruction-related orders. When local firms lack the necessary experience and know-how to carry out reconstruction projects, they should be encouraged to form joint ventures with appropriate firms from outside the area.

The public sector alone cannot lay the foundation for providing stable employment opportunities to local residents. Enterprises that set up new business or production bases in areas designated as special reconstruction zones will be exempted from corporate tax for five years. When necessary the central government should assist local governments in selecting enterprises to invite to their areas.

To help nurture new economic activities, projects have already been floated such as development of renewable energy sources and construction of communities with electricity supply smart grids. Both the central and local governments must make sure that only the most suitable enterprises take part in the new projects.

In areas contaminated with radioactive substances from the crisis at the Fukushima No. 1 nuclear power plant, decontamination is a top priority. But the central government also must work out a plan to purchase property that is so severely contaminated that the owners cannot return, and to find them new places to live and work.

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