Reversing population flow to Tokyo

Residency statistics show that the population flight to Tokyo and its environs continues unabated — despite the Abe administration’s regional revitalization efforts to halt the trend. The net gain in the combined population of Tokyo, Kanagawa, Saitama and Chiba prefectures — the greater Tokyo area — in 2016 slowed down a little bit for the first time in five years, but that can hardly be called an achievement attributable to government measures.

True, regional revitalization may not be an area where policy steps can be expected to bring immediate results. Still, achievements so far have been meager, and the goal set by the administration to balance the greater Tokyo area’s population influx and outflow by 2020 appears nowhere in sight. If the administration is still serious about pursuing this agenda, it needs to review the effects so far.

According to the Internal Affairs and Communications Ministry, the net population inflow to the greater Tokyo area hit 117,868 last year — 1,489 fewer than in 2015 but marking the 21st straight year of net inflow. Of the nation’s 47 prefectures, only seven — the greater Tokyo area plus Aichi, Osaka and Fukuoka — saw net gains, with all remaining 40 prefectures suffering population drains. More than 70 percent of the nation’s municipalities saw a net population outflow.

Alarmed by a private think tank report warning that roughly half the municipalities across the country could disappear due to population losses in the not so distant future, Prime Minister Shinzo Abe put regional revitalization on his political agenda in 2014, seeking to create 300,000 jobs outside of the greater Tokyo area by 2020 to halt population flight and encourage people and businesses to resettle away from the capital. He has set aside more than ¥1 trillion in the government’s budget each year — with the amount hitting ¥1.77 trillion for fiscal 2017 — to spend on related policy measures.

The administration introduced tax incentives for businesses that are moving their headquarters functions out of central Tokyo. As of the end of last year, only 12 firms had been awarded the tax incentive for relocating. Meanwhile, the private research firm Teikoku Databank has reported that companies that moved their headquarters into the greater Tokyo area in 2015 outnumbered those moving out for the fifth year in a row — a trend that likely continued last year. The companies are believed to be drawn to where consumers, customers and prospective manpower are concentrated.

The administration’s attempts to relocate national government functions out of Tokyo — for the government to set an example for the private sector — have produced poor results in the face of strong objections from the bureaucracy. So far, a planned transfer of the Cultural Affairs Agency to Kyoto “within several years” is the only relocation of an entire government organization, while the move of some divisions or research bodies of government affiliates is being planned. It is doubtful whether the government is taking enough steps to encourage the private sector to follow suit.

An update of the administration’s regional revitalization program late last year featured possible steps to control the opening of new universities or the addition of new departments to existing universities in Tokyo, upon a request in November by the association of prefectural governors. The governors’ call that reversing the population exodus to Tokyo depends to a significant degree on controlling the steady flow of young people to universities in the capital — who typically go on to find jobs in the Tokyo area — appears reasonable. People aged 15 to 29 account for a large portion of the net population inflow to the greater Tokyo area. While nearly 30 percent of the nation’s total population is concentrated in the greater Tokyo area, 40 percent of university students attend schools in the area.

But while the administration plans to draw up a plan by this summer by setting up an expert panel to discuss the matter, it is doubtful that the government can come up with effective measures. Faced with increasingly tough competition to attract students as the population of young people continues to decline, private universities can be expected to challenge any attempt to regulate the opening of new or expanding existing campuses in Tokyo as curtailing their freedom of management and limiting their business.

Abe cites the tightening labor market — in which the number of job openings has exceeded that of job seekers in all 47 prefectures — as evidence that the economy is finally taking a turn for the better throughout the country. However, there are views that labor demand has become tight not because the economy is good but because the manpower supply is getting scarce in some prefectures due to the population exodus. Reversing the population outflow will ultimately depend on whether there will be enough attractive local job opportunities. But despite the government’s target of halting the net inflow to the greater Tokyo area by 2020, investments in the capital area ahead of the Olympic Games portend the continuation of the population flight.

Government policies alone may not control the population movement. But the Abe administration should make sure its policy steps are having their intended effects.