Saturday, January 27, 2007

Forget but don’t forgive… their debt: The days of plenty in Japan are past, and with them trillions of yen in government largesse to outlying regions. The result is that towns like Yubari, on Hokkaido, are buried as much in debt as in snow. It’s the predictable consequence of meaningless government-works projects being showered on a town whose main economic source is dying; and it lends far more credence to the Nicholas Kristof view of redevelopment (TimesSelect) than to David Brooks’, to make a Times analogy. It’s an important lesson, too, for the Ohios and West Virginias. The Times says:

During Japan’s economic boom, Tokyo showered enormous subsidies on Yubari to build these huge though poorly thought-out tourist attractions, which drew few visitors, ran large deficits and saddled this city of 12,828 inhabitants with more than $500 million in debt.

At first it was a convenient arrangement: the hinterlands prospered, politically connected contractors had plenty of work and the government cemented the loyalty of rural voters. But the good times ended in the 1990s, and the government slowly closed the financial spigots, leaving Yubari and other rural cities increasingly desperate.


As part of its plan to file for bankruptcy, place itself in the hands of Tokyo and repay its debts over 20 years, Yubari has put History Village and about 20 other tourist attractions up for sale. About half of the 300 city workers are leaving, and those who stay face salary cuts ranging from 30 percent to 70 percent.

The city’s 11 schools will be consolidated into three or four; its hospital will become a clinic; its library, city hall branches and public baths will be shuttered. City bus discounts for the elderly will be reduced. Local taxes will rise. Already, snowfalls now have to total six inches, rather than four, before they are cleared.

No cost-cutting measure has been deemed too small. The toilet at the Yubari train station has been closed, forcing travelers to sneak into the adjoining hotel.


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