JIN-401 -- Yubari Still Has Melons

Wed Feb 7 11:36:30 JST 2007

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J at pan Inc Magazine Presents:
JAPAN INC NEWSLETTER
Commentary on Japan's culture, economy and society
Issue No. 401
Wednesday February 7, 2007 TOKYO

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-------------------- ICA Event-Feb 15 ----------------------
Speakers: Eugene Saburi - Managing Executive Officer,
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Time: 6:30 Doors open, buffet dinner included
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Open to all - Location is Foreign Correspondents' Club
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CONTENTS:
@@ VIEWPOINT: Yubari Still Has Melons

Yubari City, on Hokkaido, northernmost of the main Japanese
islands, is known for its orange-fleshed melon. Film buffs
will recognize it as the partial setting for the 1977 film
'Shiawase no kiiro hankachi' (The Yellow Handkerchief),
which won the Japanese Academy Award for Best Picture.
Now it is notorious as a symbol of fiscal mismanagement
in the hinterlands.

Yubari went bankrupt. It will become an organization for
fiscal reconstruction in March. Under state control the
city will have 18 years in which to repay its debts. That
will mean higher taxes and reduced public services--in short,
a heavy burden on the backs of Yubari's citizens.

Yubari is the most prominent example of fiscal mismanagement.
But it is hardly unique. Nationwide as many as 20 percent of
municipalities are facing a financial crisis. In case a
municipality goes belly up, should its citizens be saddled
with a heavy tax burden?

When the 'Asahi Shimbun' posed this question to 9,000
nationwide monitors during a four-day period from January
19 to 22, 60% of the 2,476 respondents said no. The reason
they most often gave was that government bears the heavier
responsibility. Commented a 46-year-old monitor in Tokyo,'
[Placing the burden on the people] blurs the responsibility
of top officials.'

In rebutting the notion of the people's responsibility,
a 37-year-old woman in Ibaraki compared a municipality
to a company: 'When a company fails, its employees never
bear a financial burden.'

Then again, some respondents opined that in case a town
goes bust its people have no choice but to sacrifice for
its restructuring. Yubari has became a symbol of a bleak
future, and a verb: 'It's clear that all of Japan will be
Yubari-ized one day,' said a 46-year-old Tokyo woman.

A 38-year-old man used his hometown as an example in raising
the question of the electorate's responsibility.

'Since the election of the present mayor when I was in middle
school, there has not been a mayoral election, and I'm now over
30. And the same people always run for the town council. It's said
that the people elect the politicians, but I think that's an
empty theory held by city people who don't know the actual
situation.'

Yubari is now 35.3 billion yen in the red. Mining, the
town's principal industry, ended with the closing of the
mine. The town staked its future on development of tourism,
with 'Yellow  Handkerchief Plaza,' the location for the
shooting of the film; Coal Mining History Village; a tour
of a pitch-black mining road; and, the last resort of a
failing provincial city, an art museum. Tourists didn't
come in sufficient numbers for a return on investment.
Yubari obtained loans from financial organs to hide the
red ink and fell deeper into debt in making repayments.

Thirty-six percent of monitors replied they would
continue to live in their town even if it went bankrupt,
as opposed to 27% who said they wouldn't. A conspicuous
number of respondents said they would stay put because
an unpaid loan on their house prevented their moving.
The Japanese have entered an age when it behooves them
to investigate municipal finances before sinking roots
in a town.

While watching a news slot on the plight of Yubari, my
nine-year-old asked if he would still be able to eat
Yubari melons.

'That, son, is all Yubari has left.'

   --  Burritt Sabin

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