Two decades ago the Japanese government embarked on a program known as ‘Shichison gappei’ which loosely translated as ‘merging cities and towns’. In 20 years Japan saw a halving of its towns to 1,800 or so. However as much as that plan was to sensibly merge public services – waste collection, councils, schools and hospitals – the cities (especially to the north) are rapidly depopulating. Of course the towns devastated by the tsunami and earthquake back in 2011 were natural candidates but Hokkaido holds 6 of the top 15 cities that are emptying. Yubari, the town where the most expensive rockmelons are made, has seen an almost 20% drop in its town’s register.
Minamisoma, a town lying on the 30km exclusion zone to the north of the crippled Fukushima Daiichi nuclear reactor has seen an 18% desertion in the past 5 years. Switching gears to the population growth areas, people are flocking to where the economy is moat likely to sustain them meaning the exodus continues. Tokyo has experienced an average 67,000 people per annum moving there over the last 15 years. Similarly, Kanagawa (Yokohama), Chiba, Saitama, Aichi (Nagoya), Shiga and Fukuoka are the only other places properly growing.
There is also the small matter of how prefectures can be self sustaining in the future. The Ministry of Internal Affairs & Communications notes that Hokkaido’s future burden is 317%. Akita, 241%, Kochi 158%, Mie 190%, Shizuoka 230%, Iwate 236% and Fukushima 140%. As more people realize these regions have no future they will move to the big smoke. Moreover the pressure on these burden ratios will go up, not down inevitably making cities and towns insolvent.
When we switch to regional budget strength, these towns are looking bleaker. On a scale of 0 (terrible) to 1 (good) the Ministry views Hokkaido a 0.4, Mie a 0.56, Fukushima 0.47, Iwate 0.32, Akita 0.28 and Kochi o.23.
Hokkaido has the third lowest number of 0-14yo at 11% of its population. 29% of its population is 65yo+. Akita is 10.5% and 33% respectively. Iwate 11.9% and 30%. Mie 12.9% and 27%. Kochi 11.5% and 32%.
The problem is unless the government starts putting a lot of energy into tax incentivisation to help revive the regions there is only one outcome – bankruptcy of the regions something I wrote about America a few months back. It may arrive far sooner than we think. The implications dire.