Editorials

Faltering regional revitalization

Prime Minister Shinzo Abe has hoisted “regional revitalization” as a key agenda of his administration since 2014 — in the face of continuing population flight from rural parts of the country to big cities, in particular the greater Tokyo area. One thing that triggered the policy was a warning by a private think tank that the exodus to major urban areas, if unchecked, would result in the disappearance of half of the nation’s municipalities by 2040. It was partly a response to criticism that his economic policies were benefiting only large companies in big metropolitan areas, leaving local economies in the rest of the country out of the loop — and was seen as an effort to woo rural voters in the nationwide series of local elections in April 2015.

Two years on, the policy almost appears to have been sidelined from the administration’s main agenda. Some of the prefectural governors who took part in an annual conference held late last month complained that they “rarely hear” the slogan these days — likely as the administration shifts its emphasis to one new political catch phrase after another. A resolution adopted at the governors’ conference — calling for the promotion of efforts to generate the population flow to regions other than large metropolitan areas and the transfer of government agencies and institutions out of Tokyo as a national strategy — testifies to their frustration that such efforts touted by the national government have in fact made little progress.

Unless greater government efforts are made to get concrete results, the regional revitalization agenda could fizzle out as a temporary political fad — even though the problem it sought to address requires sustained long-term policy efforts.

The administration’s push to move government institutions outside of Tokyo — expected to serve as a catalyst to disperse economic activities outside the capital area — has so far produced little except for a plan to transfer the Cultural Affairs Agency to Kyoto “within several years,” nor has its call on private-sector companies to relocate their headquarters functions out of big metropolitan areas.

The concentration of people and economic activities in Tokyo has not been reversed but is even gaining speed. According to the Internal Affairs and Communications Ministry’s 2015 demographics report, only eight of the nation’s 47 prefectures gained population last year, with the 39 others suffering a decline. The greater Tokyo metropolitan area — also comprising Saitama, Chiba and Kanagawa — have had population gains for 20 years in a row, with the margin of the increase — nearly 120,000 last year — expanding for the fourth consecutive year. A separate data showed that the three large metropolitan areas — the greater Tokyo and the areas around Nagoya and Osaka — combined account for more than half the nation’s population for 10 years in a row, though greater Tokyo was the only one among the three areas that saw a population gain last year. The government’s target of balancing the population inflow and outflow in the greater Tokyo area by 2020 seems nowhere in sight.

These trends may not be reversed anytime soon. But the government’s own initiatives at relocating its organizations out of Tokyo are also falling short. Of the 69 central government agencies and independent administrative bodies whose relocation was courted by 42 prefectures, only the transfer of the Cultural Affairs Agency, except for minimum staff responsible for Diet affairs, to Kyoto — on condition that the prefecture covers a sizable portion of the cost of relocating — has been the major achievement agreed on so far. A decision on another candidate, the Consumer Affairs Agency — possibly to Tokushima Prefecture — has been shelved for three more years.

The government created an incentive system to encourage businesses to move their headquarter functions out of Tokyo, slashing corporate taxes for firms that complied. Ibaraki, Toyama, Ishikawa, Okayama and Fukuoka introduced tax credits for businesses that relocated some of their head office functions to their prefectures. But most Tokyo-based companies remain reluctant. A survey last year by Keidanren (Japan Business Federation) showed that 93 percent of 147 such firms said they have no plans to move. A recent Nikkei daily report, quoting a survey by Teikoku Databank, said that a record number of companies instead shifted their headquarter functions to the greater Tokyo area in 2015 to take advantage of the growing labor market and business opportunities.

The Abe administration’s regional revitalization policy has consisted mainly of the national and local governments devising comprehensive strategies to reverse the population exodus by promoting local industries and tourism to generate more jobs, and the creation of new grants to pay for such efforts by the local governments — which totaled ¥100 billion in fiscal 2016.

The policy’s paltry results after two years leaves one wondering whether the government’s distribution of grants to prefectures and municipalities after assessing their plans is enough. If it’s really serious about reversing the accelerating trend of concentration of economic activities in Tokyo — and sustaining regional economies by creating more jobs in those areas to halt the population exodus, the administration needs to come up with stronger initiatives.

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