Collapse in Japan

Shrinking, debt-addled town of Yubari is Japan in miniature

The population has shrunk to less than a tenth of its peak, services are vanishing and white elephant public works projects have left the greying inhabitants with a mountain of debt.

Japan Today,

9 September, 2012

Welcome to Yubari, Japan in miniature.

This once-booming coal town built its wealth supplying the fuel that powered Japan’s economic miracle of the 1960s and ‘70s.

But the switch to oil, followed by the stalling of the national economy as the asset and stock bubbles burst left public finances floundering. Jobs dried up and people started moving away.

Undeterred, the local authorities kept up the lavish public spending that is the hallmark of Japanese bureaucrats, hoping the economy would pick up if they threw enough money at it.

The city built a sprawling amusement park and bought an unprofitable hotel, both of which consistently failed to attract enough tourists.

Then in 2007, things finally snapped and Yubari was declared bankrupt, with debts of 63.2 billion yen.

Salaries for some public sector employees were slashed almost in half, sending many scurrying for the exits and leaving a much-depleted and very demoralized workforce trying to make ever-shrinking ends meet.

What was once a town of nearly 117,000 people now has a population of just 10,400, spread out over 763 square kilometers. The 23 wards that are home to Tokyo’s 9 million people cover 620 square kilometers.

Of those who are left in Yubari, 45% are aged 65 or over—high even by the standards of greying Japan—putting extra strain on medical and social welfare services, while adding little to the tax take.

It was into this fiscal morass that Naomichi Suzuki, now 31, was seconded in 2008 by the Tokyo Metropolitan Government, with the aim of bringing some big city discipline.

His 26-month stint, which saw him going door-to-door to learn about the impact of spending cuts, gathered him a following and shortly after his return to Tokyo, Yubari residents got in touch to ask him to run for mayor.

“I thought hard about it,” he recalled. “It was right after I proposed to my wife, and her parents were strongly against my leaving a stable job,” he said. “In the end, I listened to my inner voice and knew that I really wanted to do it.”

The bet paid off and in 2011 he was elected for a four-year term.

Yubari’s chief problem, said Suzuki, is that local politicians did not cut their spending accordingly, and public service provision in the early 21st century remained much as it had been 50 years earlier.

“We are looking for ways to make services more efficient, and to live happily without spending lots of money while the population keeps shrinking,” Suzuki told AFP during a recent interview in his office.

“I’m proposing to build a compact city” where all key functions and inhabitants will occupy a smaller area, the mayor said.

Suzuki’s administration accelerated a program to reduce the seven elementary schools and four junior high schools to one each, while a city museum and library were both closed down.

The hospital, once a place residents could consult pediatricians, orthopedists, dermatologists and other medical experts, was scaled down to a primary care clinic with general practitioners.

Under the current repayment schedule, Yubari will have more than halved its debt by 2026. The balance will be paid off over the following decades.

Suzuki said that eventually he wants to restore some of the services that were cut—increasing the frequency of snowplowing in winter or subsidizing medical fees for preschool children.

But he knows what many of those in the city say—without jobs it has no real future.

If they can’t find well-paid work, “young people who wish to live in Yubari can’t pay their housing loans,” said Yoko Ogawa, 65, whose two children left Yubari to go to college and decided to stay away.

The place has its charms, to be sure, said Yuta Kudo, 27, who moved here from near Tokyo to become curator of the now privately-run Coal Mine Museum.

“People here are warm… My neighbors often bring me hand-made lunch boxes or hand-picked wild vegetables as I’m single,” he said.

“And I’m often asked if I’m planning to stay here in the future… but I think that would be difficult. Everything is expensive: water, gas, sewage and tax” because of the municipality’s debts, he said.

“There is only one elementary school, one junior high and one high school, and the high school has failed to meet its recruiting target in recent years. If I have my own family, I want my children to get a good education,” he said.

Yubari’s shrinking and graying population is far from unique in Japan.

With a below-replacement birth rate and lengthening life expectancy, the country is getting old.

A little over 23% of the nation are aged 65 or over, government figures show. In 50 years, that will rise to 40%.

The country is already running a primary deficit, and has debts that equate to more than twice the size of its economy—one of the highest levels in the world.

“Yubari is often called Japan in miniature, as its problems are the same as those that Japan faces,” Suzuki said. “I believe how we rebuild Yubari is directly connected to Japan’s future.”