Turning Around Japan's Declining Towns

3 December 2007 - 7:00am

Many Japanese cities are in decline, and people there are counting on the new prime minister to put a stop to it.

"A clearance sale has started in this city on the northern Japanese island of Hokkaido: The mayor's official car, a Toyota Crown, has just been auctioned online by his employees. They got about €5,000 ($7,421) for it, and a large, gleaming gemstone brought in €2500 euros ($3,711). Next, they want to sell off 130 bonsai."

"Mayor Hajime Fujikura receives visitors with a bow. Even as his city declines, he maintains his polite Japanese form. His office has grown lonelier. Since Fujikura was elected in April, 129 of 269 employees -- who failed to agree to 40 percent cuts in pay -- have left city hall."

"What's happening in Yubari is also happening in many other communities. With gross debt exceeding gross domestic product by 160 percent, Japan's government has a higher level of public debt than any other industrialized country. Hardly anyone in Japan can feel indifferent about Yubari's fate."

Source: Der Spiegel, November 30, 2007
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Even if the report overestimates the costs by a factor of two and underestimates the tax-benefit by a similar amount, the conclusion would be pretty much the same: destination resorts cost local government and taxpayers money.