Rebuilding Tohoku, renewing Japan - Part 2

by Peter Dyloco

Opinions Dec. 26, 2011 - 05:33AM JST ( 6 )

TOKYO —

After being battered by not one, but two of the worst natural disasters in Japan’s history, residents of hard-hit norteastern Japan are confronted with the herculean task of restoring a semblance of normality in the wake of Mother Nature’s wrath.

Though the March 11 disasters had a negative impact on nearly every industry in Japan, the long-term sustainability of Tohoku’s regional economy came into question long before waves began pounding Honshu’s northeastern shore. Smaller communities became increasingly dependent on single employers or on industries with limited growth potential. The emigration of youth toward the megacities of Tokyo and Osaka drained the region of talent, productivity and potential economic growth. Even if nothing had happened, the Tohoku region was effectively stuck in permanent decline.

This phenomenon is not exclusive to Tohoku, but has been happening around other parts of Japan as well. Depopulation and over centralization of Japan’s most urban areas have been concerns left unaddressed for far too long. Tohoku can be a model of future growth for regions in similar situations with proper planning, strategy and management.

Expansion of Cultural Tourism Critical to Economic Growth

Cultural tourism presents rural communities around north-eastern Japan with an opportunity to increase gross tourism revenue. Cultural tourism is growing at a pace of approximately fifteen percent per year – a figure that Tohoku region’s coastal villages, towns and cities can certainly take great advantage of.

Isolated from the noise, hubbub and bright lights of Tokyo’s Ginza and Shinjuku districts, many rural towns and villages have managed to preserve fragments of “Old Japan” through customs, rituals and festivals passed on from generation to generation – customs, rituals and festivals that may appeal to tourists seeking to know Japan on a more intimate level. Traditional Japanese culture is beautiful beyond description, and communities in Tohoku would do exceptionally well in making full use of said beauty for the sake of education, cultural preservation and revenue.

To capitalize on these facets of traditional Japanese culture, packaging and marketing will be critical in bolstering cultural tourism to Tohoku. In the same way that Korean tourism to Akita Prefecture surged following the filming of Korean drama “Iris” in the region, Japan’s tourism industry should coordinate with its entertainment industry to maximize revenues in both sectors, while taking advantage of the traditional culture Tohoku has to offer.

An example of such would be the recreation of a traditional, Tokugawa-period Japanese town for tourism purposes only. As was the case in the popular Japanese drama “JIN,” visitors would relive and immerse themselves in 19th century Japan. Transactions would be conducted in Bakumatsu currency (exchanged upon entry) and tourists would learn and participate in the daily activities of that time period, including but not limited to: swordsmanship; sumo wrestling and printing ukiyo-e. Such an experience would be sold as a package tour, priced competitively due to volume.

The nature of the work would also allow residents of every age and background to have extensive participation in such a project, thereby increasing employment opportunities for Tohoku’s elderly population. Lastly, tourists would be educated about the history of Japan, which would simultaneously fulfill the government’s objective of popularizing Japanese culture worldwide under its Cool Japan initiative.

Haikyo and Abandoned Ruins as a New Stream of Revenue

Though some may question the ethics of disaster tourism, haikyo, or the exploration of abandoned ruins and desolated buildings, can also be explored as a new source of tourism revenue to support Tohoku’s hardest-hit areas. One must take great care to ensure that all facilities used and viewed by tourists are safe, but preserve the sense of desolation and abandonment that make them attractive to potential tourists to start with.

Inspiration can be drawn from the Chernobyl nuclear plant, where the Ukrainian government legalized tours of the facility and of the abandoned town of Pripyat last January for the equivalent of 10,939 yen per individual. A similar situation can be seen with Auschwitz, which drew in more than 1,380,000 visitors in 2010 alone. With tour prices starting at approximately 6,622 yen per person, Auschwitz turns nearly 9.1 billion yen in total revenue the same year (assuming that each visitor purchases a basic ticket).

Similarly, several benefits can be derived from capitalizing on haikyo and on abandoned ruins in Tohoku. Smaller coastal towns could benefit financially from disaster tourism and from the curiosity of tourists from both in and outside Japan – a boon, considering economic concerns raised before the earthquake and tsunami struck. Leaving towns in their current, damaged state could also serve as a memorial to those who lost their lives on March 11. Finally, using damaged towns for tourism purposes give visitors a greater sense of understanding, which may serve to correct misunderstanding about the disaster in their country of origin.

Of course, the nature of such an endeavour is not without its downsides. Locals may feel that their privacy is being infringed upon. Buses packed with tourists may get in the way of clean up and recovery efforts elsewhere. Leakage, or the loss of revenue to the economies of other countries, may occur through visitors’ accommodations and promotional expenditures. Such concerns must be taken into consideration before the implementation of such an initiative.

It is important to remember, however, that supporting the livelihoods of victims is paramount to the recovery of Tohoku. Scarce in natural resources and far off the beaten path, the expansion of tourism in a positive form will be critical to increasing employment opportunities in Tohoku. With the growth of tourism powered by the increasing wealth of the middle class in emerging economies, this is an opportunity to open Tohoku up to the world.

Building Cities in Tohoku Region into Shenzhen Success Stories

Though tourism will continue to be important to the economic recovery of Tohoku, diversification of the regional economy will be needed to reduce dependence on the local tourism industry for all incoming revenue. With the cooperation of the Japanese government, towns and cities in Tohoku region could be developed into Special Economic Zones, where foreign direct investment (FDI) is encouraged through a combination of free market economics and innovative policy.

Special Economic Zones (or SEZs) are governed by policies conducive to business and corporate interests. Examples of such policies include tax breaks to foreign investors and more freedom to conduct international trade. SEZs also exercise greater authority in economic affairs, with the local government having the ability to pass certain, less restrictive laws in their own jurisdiction.

One need not look further than China to understand the potential advantages a Special Economic Zone can give to a regional economy. Under the leadership of ex–Premier Deng Xiaoping, the Chinese government set up the first of the original five SEZs in the small village of Shenzhen back in 1980. With the help of its geography proximity to Hong Kong, large-scale infrastructure projects, tax breaks and collectively through SEZ policy, Shenzhen has since transformed from a rural wetland into one of China’s major financial capitals and manufacturing centres with the influx of domestic and foreign investment that followed the inauguration of its SEZ status 18.

From a rural backwater to an economic powerhouse, Shenzhen’s success story has inspired both Chinese and international cities to follow suit. In 2008, foreign investment amounted to more than 137 billion yen in the city of Xiamen. 

What’s to prevent Aomori, Hachinohe, Sendai and Akita from achieving success stories that reach heights greater than that of the aforementioned? What’s to stop Koriyama from becoming Japan’s next center for research and development? The answer to both questions is one and the same: nothing. Situated next to Tokyo and just three hours away by shinkansen, towns and cities in Tohoku region have the potential to enjoy the economic benefits of having the world’s largest metropolitan economy at their doorstep.

Trade liberalization that oftentimes accompanies the foundation of Special Economic Zones would serve to ameliorate the government’s greater goal of signing and adhering to more Free Trade Agreements. With the foundation of SEZs around Tohoku region, Japan could promote foreign direct investment that it had actively sought before the earthquake and tsunami struck. All of the aforementioned, if fulfilled, would result in the foundation of a New Japan open to globalization and the world at large.

Importance of Trade Liberalization to the Agricultural Sector of Tohoku 

Though mountainous terrain, harsh climate and low production values of crops have hindered the livelihoods of thousands of farmers across northeastern Japan for generations, Tohoku’s farming sector faces its biggest hurdle yet in surmounting agricultural challenges caused by the March 11th disasters. While the thundering waves have all but departed the shores of Honshu, the tsunami inundated more than 30,000 hectares of arable land with saltwater and debris, rendering farmland unusable and barren for years to come. Concerns of nuclear contamination from the Fukushima Daiichi power plant have also tainted the once-spotless reputation of agricultural exports from Tohoku.

It is important to note that the restoration of the status quo ante will be wholly inadequate in the formation of a New Japan. Many farms were woefully inefficient and were run by elderly farmers. The low buying price of rice, Tohoku region’s staple agricultural product, discouraged younger generations from returning to the countryside. High tariffs on rice have limited growth in export markets as Japan’s population continues to decline. With less arable land to work with, limited domestic growth potential and a greying population tilling the fields, new measures must be put into place to restore the viability of farming in Tohoku region and food security across Japan.

Trade liberalization will prove to be an effective means by which Japan will be able to revive its flagging agricultural sector. Though Japan had considered participating in the Trans-Pacific Partnership before the March 11 disaster, data from cost–benefit analyses by the Ministry of Agriculture, Forestry and Fisheries indirectly discouraged the trade liberalization of Japan’s highly protected agricultural markets. Jumping to such a conclusion, however, would be premature.

Losses of land would be mitigated by the repeal of Japan’s acreage reduction subsidy policy, put in place to limit agricultural output and induce price control intended to protect the livelihood of farmers. Estimates place the amount of uncultivated arable land at approximately 39,000 hectares. The same repeal would also serve to cover the costs of direct payments to farmers through the abolishment of key subsidies; increase yields previously discouraged to limit subsidy handouts; and would improve farming efficiency through limiting eligibility of direct payments to corporate farmers only.

In consequence, lower rice prices would encourage greater rice consumption and would ease the cost of living for Japan’s economically disadvantaged. Tohoku, Japanese agriculture, Japanese society and international trade as a whole (through the improvement of multilateral relations) would enjoy the benefits of trade liberalization if such a path were to be pursued.

Conclusion: A New Tohoku for a Better Tomorrow

Tohoku had a surfeit of problems before the March 11 disaster. Regional economic prospects were dampened by chronic depopulation, which drained towns of valuable labour and threatened their very existence. Traditional sources of income were beleaguered by limited long-term growth potential. Businesses and corporations were disinclined to relocate to a harsh, remote northeast. Burdened by the heavy costs of clean-up and reconstruction, restoring Tohoku region to its former state would leave it worse off than it had been before the earthquake.

It becomes immediately apparent that innovative policy will be necessary to bring Tohoku region out of its current economic malaise. This innovation can take on many different shapes. Various forms of cultural tourism can be encouraged to bolster local industry and provide employment opportunities for Tohoku’s workforce, regardless of age or gender.

Disaster tourism would serve both educational and commercial purposes, while establishing Special Economic Zones would bring much needed commercial interest and investment to towns and cities across the region. The agricultural sector of Tohoku region would benefit from trade liberalization and deregulation. Reinventing Tohoku on a scale similar to the aforementioned will be critical to the region’s recovery and long-term sustainability.

The success of Tohoku’s reconstruction, however, will not be dependent on proposals equivalent or similar to the ones presented above, but rather on a strong foundation of long-held cultural values that defined Japan as a nation over the course of its existence.

Grounded in a philosophy of hope and optimism for Japan’s future, the emergence of a New Japan will begin with the reconstruction of the nation’s hardest – hit areas through the dedication and willpower of its people. It is only through the successful application of such traits that Japan can once again emerge renewed, re-energized and ready to make greater positive contributions to the international community.

Author Infomation

Peter Dyloco

Peter Dyloco is concerned about the gradual decline of the Japanese economy. His objective is to bring a fresh perspective to the issues currently facing the country, and spark discussion that may lead to their potential resolutions.

Website: http://www.facebook.com/hkborntokyoinspired