Govt looks far afield to slow depopulation

By Fumihiko Abe / Yomiuri Shimbun Senior Writer

12:01 JST, June 27, 2021

For decades, two major trends have bedeviled local governments in regional areas of Japan. One is that the national birth rate has fallen. The other is that people have left their hometowns behind to seek big-city opportunities. The latter trend made Tokyo’s population balloon — and the population in many other parts of the nation shrivel.

Since the 1960s, the central government has implemented a variety of policies aiming to reverse this overconcentration of population and industries, but it has failed to achieve its goals. Why has the central government been unable to halt the population decline in rural areas? What measures are needed now? Looking back on the history of postwar Japan may reveal clues about Japan’s future.

Economic principles

During the high-growth period from around 1955 to 1970, the population of such regions as Tohoku and Kyushu declined rapidly. This was due to the mass migration of young workers, known as “golden eggs,” to the so-called Pacific belt industrial zone spanning from such areas as the greater Tokyo area to the Tokai and Kansai regions. The mass migration has been called “a social change greater than the Meiji Restoration.”

In the 1970s, the rural population got a temporary boost from factors such as the second baby boom, but it began to decline again in the late 1990s. Over the past 65 years, the population of the Shikoku region has declined by as much as 13%.

There are two driving forces that spur the migration of people: the “economic principle” and the “power of politics.” The “economic principle” is what compels people to move to large cities. Major companies and a wide variety of industries concentrated in big cities provide people with many opportunities for high-paying jobs. During the period of rapid growth, there was a social shift from primary industries such as agriculture, forestry and fisheries in rural areas to secondary industries in large cities.

Since 2000, there has been a rapid increase in the number of large corporations moving their headquarters to the greater Tokyo area. Tokyo has a high concentration of central government ministries and agencies — with all of their regulatory and licensing authority — as well as related businesses, making it advantageous for companies to do business both domestically and internationally from a Tokyo base.

The greater Tokyo area has thus agglomerated much of the business activity and profit that might otherwise have occurred in local areas, widening the gap in worker wages and local tax revenues. Tokyo-based companies are usually the top choice of university graduates seeking employment, and many young people moved to Tokyo for jobs and higher education.

Set against this “economic principle” is the “power of politics,” by which politicians and bureaucrats pursue national land policies under the banner of “balanced national development.” They sought to raise the level of local economies and decentralize the population. In pursuing these two goals, they hoped to alleviate the negative aspects of large cities, such as soaring land prices and packed rush-hour commutes.

From the 1960s onward, the government promoted the concept of new industrial cities, creating 15 industrial hubs in rural areas. In 1987, during the years of the economic bubble, the government established a law for the development of comprehensive resort areas to promote regional development through tourism.

While the government emphasized the construction of buildings through public works, it did not sufficiently improve the soft infrastructure in accordance with the natural and cultural characteristics of each region.

As there was a lack of coordination among ministries and agencies, the government failed to carry out its projects in a comprehensive or strategic way. As a result, similar cultural and commercial facilities tended to be built in every local city — which made every place look like everywhere else.

As the economy entered a period of slow growth, it became more difficult for regional areas to attract investment. New industrial hubs failed to generate major economic ripple effects in the surrounding areas, and many resort concepts were abandoned when the bubble economy collapsed, plunging many municipalities into financial crisis.

The globalization of the economy has also had a significant impact, as local factories have closed or relocated one after another since the 1990s due to intensifying competition with other East Asian countries and the strong yen.

The idea of relocating functions of the capital to regional areas raised the expectations of local governments as a game changer to drastically correct the overconcentration in Tokyo of administrative bodies, industries and people, which surely symbolizes the “power of politics.” Yet the plan was frozen due to financial difficulties following the collapse of the bubble economy and the growing calls to make a U-turn to reliance on Tokyo as an engine for winning international competition.

Bureaucratic resistance

Since the 1990s, the government has focused on decentralization. By transferring authority, administration and tax resources from the central to local governments, and by increasing the administrative capacity and freedom of local authorities, the central government aims to change local bodies’ dependence on the central government, and develop and revitalize local areas.

The “Heisei-era megamergers” halved the number of municipalities, of which there had been more than 3,000. The mergers also aimed at introducing the decentralized “doshu” system, under which larger local governments are formed with wide areas under their jurisdictions.

Yet it is undeniable that the plan ended halfway due to strong resistance from bureaucrats.

“Because the government placed emphasis on improving administrative efficiency, the transfer of authority to local governments was insufficient, and thus local bodies could not gain the ability to develop and carry out regional policies,” said Shuji Koiso, a visiting professor of regional development policy at Hokkaido University.

In the end, there was a limit to the “power of politics” in overcoming the decline in regional populations driven by “economic principles.”

What are strengths?

In May 2014, a report by the Japan Policy Council, a private research organization chaired by former Internal Affairs and Communications Minister Hiroya Masuda, delivered a shock to local governments nationwide.

The report said: “If there is no change to the flow of women aged 20-39 to the greater Tokyo area, which has a low fertility rate, Japan’s overall birth rate will also decline, accelerating the decline in population. About 30% of municipalities nationwide are expected to have fewer than 10,000 residents by 2040, with a high risk of disappearing entirely.”

Local governments were upset to be labeled as “cities likely to disappear.” In September 2014, the Cabinet of then Prime Minister Shinzo Abe launched measures to develop local areas.

Abe laid out two main goals: maintaining a national population of about 100 million in 2060 by significantly raising the birth rate, and eliminating the net inflow of people to the greater Tokyo area by 2020.

It was quite unusual for the government to set specific goals for the population and birth rate, which are related to individuals’ choices about their lives.

Local governments nationwide had formulated comprehensive five-year strategies that include numerical targets for the number of young people employed and the number of incoming new residents. The central government provided financial support to local governments with grants, allowing a high degree of freedom in how they are used.

However, the government failed to achieve its target as the net inflow of people to the greater Tokyo area in 2020 was about 100,000 — although the number was reduced by about 50,000 from the previous year due to the novel coronavirus pandemic. The national birth rate has also remained stagnant.

The flow of people to Tokyo has not stopped despite some success in terms of the growing employment rate of young people in regional areas and increasing exports of agricultural products. The barrier of “economic principles” turned out to be a thick one.

However, there are some useful cases among the various local government initiatives for regional development using the grant money.

The village of Nishiawakura, Okayama Prefecture, where 95% of the area is covered by forests, has established a company that processes lumber and trains workers. The municipal government encourages people to start their own businesses in the village, creating job opportunities for residents.

The Bungotakada municipal government in Oita Prefecture has increased the number of visitors by creating a “Showa town” with retro stores that have been in the city since around 1955 or earlier. These projects take advantage of local strengths.

In the long run, many of the successful projects have been carried out by local governments such as Nishiawakura, which have had a strong sense of alarm for many years over the future of their region and have made great efforts to resist decline.

“The government has focused on attracting factories and public works for regional development,” said Prof. Shigeru Tamura at the University of Nagano, an expert on local administration. “The municipalities that have achieved the most success were the ones that recognized the limits of [the central government’s] approach, and focused on fostering industries to make use of the unique resources of the region.”

Value of farm villages

Waseda University Prof. Emeritus Toshimichi Miyaguchi, a former expert member of the National Land Council and an expert of social geography, said that farm villages certainly have some value that cannot be found in urban areas although a declining population generally has a negative impact on rural areas.

He advocates the creation of enticing low-density residential areas.

“If a livable infrastructure environment is built in farming and mountain villages, such areas also can be attractive enough for urban residents to live,” he said.

The coronavirus disaster has shone a light on the appeal of such rural areas. In each month from July last year through February, Tokyo saw a net outflow of people. Most of the people moving out migrated to nearby prefectures such as Kanagawa and Saitama. But many people also moved out to rural areas such as Hokkaido, Nagano and Okinawa prefectures.

The increase in the number of people telecommuting has also been a driving force behind people leaving Tokyo. “Telecommuting has made it possible for people to migrate without changing jobs. Living in rural areas makes many people feel they are living the way they want to live compared to living in big cities, which is expected to help revitalize local areas,” said Osamu Hayashizaki, an official in charge of regional revitalization at the Cabinet Secretariat.

Now that Japan as a whole — and not just particular regions — is experiencing population decline, there is no “magic wand” that can solve the depopulation problem in rural areas.

The central and local governments need to take into account the failures of their past policies, and steadily search for more effective measures for regional development in cooperation with local businesses and universities.

It will also be indispensable to make self-help efforts, such as promoting the development of compact and efficient towns based on the assumption that their populations will decline to a certain extent, and maintaining public services such as water supply through wide-area cooperation with neighboring municipalities.