PAYING FOR RECONSTRUCTION AND PROBLEMS WITH REBUILDING AFTER THE 2011 TSUNAMI

JAPAN’S RECONSTRUCTION AGENCY

The Yomiuri Shimbun reported: Local governments in the disaster-struck areas, which had been struggling with chronic staff shortages, rely on officials dispatched as helpers from other local governments. In Rikuzen-Takata, Iwate Prefecture, where 68 city government officials were killed in the disaster, a city government official said, "Along with reconstruction plans becoming clearer, we need more engineering and other specialists with knowledge about rezoning and purchasing of land."

A new government agency called "Fukko-cho," or the Reconstruction Agency, was created to take care of reconstruction after the March 2011 earthquake and tsunami. "Fukko" means revival. Local governments in areas that were severely damaged by the Great East Japan Earthquake on March 11 have been putting together various reconstruction plans. They include projects to transform their communities by rebuilding towns in a disaster-resistant way, while also redeveloping their local industries. [Source: Yomiuri Shimbun, February 14, 2011]

The agency was in February 2012. Its duty is to support projects that will help rehabilitate disaster-stricken areas as soon as possible. Various central government agencies need to be involved in the wide range of projects that must be completed to rebuild the damaged areas. The new agency coordinates the various national government bodies to help reach a consensus about each reconstruction plan, and make decisions about how to use funds from the state coffers for reconstruction purposes. It also provides advice to prefectural, city, town and village governments in the quake-hit areas.

The agency is headquartered in Tokyo, with regional offices in the damaged areas. The agency has bureau-level centers and branches in Iwate, Miyagi and Fukushima prefectures, which were all particularly devastated by last year's disaster. It also has offices in Aomori and Ibaraki prefectures. The new agency has about 250 staff who are mostly national government employees. The disaster reconstruction minister is a cabinet level position.

Many felt the government was slow in setting up the agency. The legislative decision to create the agency was made in June. But lawmakers were divided over the nature of authority that the agency should be given. The body's specifics were finalized in December 2011.

As of March 2011, though the quake-hit municipalities applied for a combined 389.9 billion yen in subsidies, the agency approved only 250.9 billion yen, or 64 percent of the applications. A senior official of a town government in Fukushima Prefecture that had its application rejected said: "We're already short of workers. The application process for reconstruction subsidies has only increased our burden. It would be better if the government told us our application would not be approved from the outset." [Source: Yomiuri Shimbun, March 4, 2011]

Tatsuo Hirano, state minister for disaster reconstruction at the Reconstruction Agency, said, "We excluded plans that weren't carefully worked out. We're willing to accept criticism [by municipal governments] that it isn't convenient [for them] to use [the subsidies]," he said. However, he emphasized: "We will not create something wasteful. We have to cover things that are needed."

The mayor of Rikuzen-Takata, Futoshi Toba, criticized the government's subsidy project: “Although we requested subsidies to be used freely, we were shown a list of 40 projects. It's the same for subsidies allocated by the government to local municipalities, whose usage is determined by the government in advance.”

Insurance and the Tsunami

Earthquake insurance payments are expected to exceed ¥1.2 trillion. As of September 2011. ¥1.15 trillion had been paid according to the General Insurance Association of Japan.

There were about $24 billion in insured properties in the three kilometer band of coastline in the four prefectures affected by the tsunami. In addition there are $300 billion in insured properties in the region shaken by the earthquake. The real loss from the disaster far exceeds the amount covered by insurance. Insurance companies are not equipped to handle losses brought about the radiation and evacuations caused by the crisis at the Fukushima nuclear power plant.

As of mid May 2011 about $8 billion in insurance payouts had been made. Many vehicle owners lost their cars and trucks in the disaster and were left uncompensated as few of them took natural disaster policies. Such policies cost around $300 to $400 in top of annual policy premiums.

Life insurance companies have estimated they will have to pay out about $2.5 billion in claims. Dai-Ichi Life is Japan’s second largest life insurer, It was expected to make a profit of ¥50 billion in fiscal 2010-2011 but ended making a profit of about ¥19 billion after the earthquake and tsunami in 2011 not because of the disaster but because it is the second largest holder of TEPCO stock.

Supplementary Bills for Rebuilding

In the end, by some estimates, rebuilding could require send of $550 billion public and private funds. Perhaps the biggest question is how is Japan going to pay for all this when it is already, by some measures the world’s most heavily indebted nation, with a government debt equal to 200 percent of GDP.

The first supplementary budget to pay for rebuilding was passed in May 2011. It totaled ¥4.15 trillion (about $47 billion) and included 1) ¥1.2 trillion for public works such as repairing roads, airports, ports and sewer systems ; 2) ¥482.9 billion for disaster relief (temporary housing and money to victim’s families; 3) ¥640.7 billion for loans for small and mid-size businesses and home buildings; 4) ¥416 billion for restoration of facilities (schools, social-welfare-related buildings; 5) ¥351.9 billion for waste disposal; 6) ¥120 billion for increased tax grants to local government s; 7) ¥801.8 billion for other (self defense forces, police, support for students and ¥ 5.2 billion for farmers.

Immediately after the first supplementary budget to pay for rebuilding was passed work began on the second bill. Legislators estimated that one would be worth to ¥2 trillion (about $24 billion) and ¥20 trillion. This bill would cover full-scale reconstruction of key highways in coastal areas and ports. A third bill is expected to be worth more than ¥10 trillion ($120 billion).

In June 2011, a bill outlining Japan's basic scheme for reconstructing areas hit hard by the March 11 earthquake and tsunami was passed. The bill's enactment will pave the way for establishing a new government agency to be solely in charge of rebuilding the disaster-stricken northeastern region in the near future. With the enactment, the government will also be able to create special zones with tax breaks in the region and issue so-called ''reconstruction bonds'' for a certain period of time to finance necessary measures.

In July 2011 the Cabinet of Prime Minister Naoto Kan agreed on a draft ¥2 trillion second extra budget for fiscal 2011 that would finance relief work following the March earthquake and tsunami, including health checks on people affected by the Fukushima nuclear plant crisis. Kyodo reported the government's surplus fund under its budget for the year ending in March came to 1.47 trillion yen. This together with some 545 billion yen in grants to be allocated to local governments will cover the costs. [Source: Kyodo, July 2, 6, 2011]

A ¥12.1 trillion ($150 billion) third extra budget to fund reconstruction work was approved in October 2011.

$3.23 Billion Approved for Public Housing, Community Relocations in May 2012

“In May 2012, the Reconstruction Agency announced that its second round of reconstruction subsidies for disaster-hit local governments will total 261.2 billion yen ($3.23 billion), 1.5 times more than the amount requested. The Yomiuri Shimbun reported: “The second round of subsidies shows a drastic change from the first one, for which the agency evaluated fund requests very strictly and approved only 60 percent of the amounts sought. [Source: Yomiuri Shimbun, May 26, 2012]

“For the first round of subsidies, the agency in March approved only 250.9 billion yen out of requests totaling 389.9 billion yen, saying the submitted reconstruction plans were not clear. This caused local government officials to sarcastically refer to the agency as the "evaluation agency." For the most recent subsidies, the agency approved all requests for projects directly tied to rebuilding the lives of disaster victims, such as relocation of communities to higher ground and construction of public housing. The agency also approved funds for the projects to continue through next fiscal year. Seventy-one municipalities will receive subsidies within a month. [Ibid]

“With the second round of subsidies approved, public housing for 2,036 households could be built mainly in Iwate, Miyagi and Fukushima prefectures and 92 districts could be relocated to higher ground, giving momentum to belated reconstruction of the victims' lives. The generous, second reconstruction subsidies approved for disaster-hit local governments have pleased some of them. However, others were disappointed that they could only receive a fraction of their requested amounts because restoration plans in the areas concerned remained sketchy. [Ibid]

Raising Taxes and Paying for Rebuilding

The Yomiuri Shimbun reported: “The government is studying issuing "recovery and reconstruction bonds" and a temporary increase in the consumption tax or hikes in two or three taxes. Funds generated from these measures will be placed in a "disaster restoration fund," to be kept separate from the government's general account. The money would be used strictly for financing reconstruction programs and redemption of the recovery bonds. If the consumption tax is raised, people from quake-hit areas will receive tax refunds according to their household incomes. To gain the understanding of the public for a tax hike, the government is planning to cut salaries of national public servants by about 10 percent.” [Source: Yomiuri Shimbun, May 4, 2011]

“It is far from certain, however, that the government will be able to raise funds via tax hikes, as members in both the ruling and opposition parties have expressed opposition to increasing taxes. Some have argued for tapping reserve funds dubbed "buried treasure" in the national government bonds consolidation fund, which administers government bonds already issued. But the government has been hesitant to use these funds.” "That money is reserved for redeeming government bonds in the future," Noda said. "If we used it easily, we'd leave future generations with debt." [Ibid]

The Kan government is studying creating a "reconstruction solidarity tax" to procure funds for rebuilding from earthquake and tsunami. Under the system, the government will increase one or more of the consumption, income and corporate taxes for a limited time. [Source: Yomiuri Shimbun, April 16, 2011]

The Cabinet Office has estimated that property worth about 25 trillion yen was lost in the March earthquake and tsunami, including private homes and public roads. If the consumption tax is raised by one percentage point, it is estimated that tax revenue would increase by about 2.5 trillion yen. If it is raised by two points for five years, about 25 trillion yen in additional income would be generated, which would be equal to the amount of lost property.

In mid April, the Kan government floated the idea of raising the consumption tax from five percent to eight percent for three years, starting in 2012, with tax breaks for those have suffered because of the disaster. Higher taxes are probably be inevitable but they may constrain spending and slow growth. "I don't see a better way. Anyway, we need some money," said Kazunobu Minami, an MIT-trained professor and deputy president of Shibaura Institute of Technology.

Most economists say Japan will probably need to float more bonds or borrow money from outside the nation. The government is expected to issue "reconstruction bonds" to fund a second supplementary budget for fiscal 2011, likely to be compiled in June, and the sources said the DPJ plans to use the revenue from the reconstruction tax to redeem the special bonds.

The government was also eyeing freezing the gasoline tax cut; ending child support subsidies; and bringing back highway tolls on highs in which they were eliminated to free up more funds for rebuilding and survivor support. Other ideas that have been floated include cutting the pay of civil servants by 10 percent and using the $3.5 billion raised for quake recovery. The move would last for a few weeks or months and, the theory goes, would make it easier for the government to raise taxes to secure more funds.

In May 2011 the Yomiuri Shimbun reported: “In what officials are calling an "extraordinary" step, the Financial Services Agency (FSA) is planning to inject public funds into small local banking entities shattered by the March 11 disaster even if their liabilities exceed their assets. Two types of financial institutions will be covered by the special assistance program: shinkin banks and credit cooperatives (known as shinyo kumiai or shinkumi) whose membership is limited to capital investors. Under the FSA’s planned package, shinkin banks and credit cooperatives will be exempted from repayment of the public funds if the money is used to cover losses resulting from the disaster, the FSA officials said.

To procure funds to for reconstruction the government is planning to sell some of its shares in Japan Tobacco Inc. and Tokyo Metro Co. and to utilize surplus funds in a special account used to finance public investment and loans to government-affiliated financial institutions. That way the government won’t have to rely on taxes as much to fund rebuilding. It hopes to raise $7 billion from the sale of JT stock alone.

Government Salaries Reduced to Free Funds for Tsunami Reconstruction

In February 2012, the House of Councillors passed a bill into law to cut national government employees' salaries by an average of 7.8 percent over two years from fiscal 2012 with the government using about 580 billion yen in savings from the cuts for financing reconstruction programs in areas devastated by the Great East Japan Earthquake. [Source: Yomiuri Shimbun, March 1, 2012]

The bill on a special exemption law on state employees' salaries was opposed by the Japanese Communist Party and Social Democratic Party, but passed the upper house with a majority of votes from ruling and opposition parties at a plenary session Wednesday morning. The bill was sponsored by lawmakers based on an agreement among the ruling Democratic Party of Japan, the LDP and New Komeito.

The first cut will be an average of 0.23 percent of state employees' salaries, which was recommended by the National Personnel Authority. This cut, for fiscal 2011, will be carried out retrospectively to April last year. From fiscal 2012, an average 7.8 percent cut, which includes the 2011 reduction, will be rolled out over two years.

The prime minister's salary will be slashed by 30 percent, while other Cabinet members and senior vice ministers will see their wages reduced by 20 percent. Parliamentary secretaries will have a 10 percent pay cut. The reduction of salaries for Self-Defense Forces members will be deferred for up to six months due to their contributions to the reconstruction efforts and other work related to the Great East Japan Earthquake. The upper house also passed bills at the plenary session to revise laws governing the salaries of public prosecutors and judges so wage cuts can be made in this area as well.

The law's supplementary clauses include a provision that it is up to the discretion of local governments as to whether their employees will also have salary reductions. Cutting the salaries of national government employees, who include politicians in state posts, is considered a "reform in which both the government and diet members share the pain." It is meant to help win understanding from the general public for the consumption tax rate hikes Prime Minister Yoshihiko Noda is aiming for.

Now that the bill to cut the salaries of national government employees has been passed, the DPJ will start full-fledged discussions on cutting salaries for lawmakers, who receive about 1.3 million yen a month, officials said. The move backs up comments made by Deputy Prime Minister Katsuya Okada, who said it would be important for Diet members to undergo salary cuts because of the financial burden on the general public when the consumption tax rate is increased. However, the DPJ discontinued discussions because Secretary General Azuma Koshiishi urged priority be placed on eliminating 80 House of Representatives seats contested under the proportional representation system. That issue has reached deadlock because many parties oppose cutting seat numbers and the council of political parties on lower house electoral reform has been unable to reach an agreement. The DPJ believes Diet members' salaries must be cut by at least 7.8 percent---the amount for national government employees stated in the bill passed Wednesday.

Japanese Government Mulls Tapping Dormant Accounts for Funds to Spur Growth

In February 2012, according to to Kyodo, The Japanese government said it was going to explore ways to tap bank deposits left untouched for over 10 years for funds to encourage new businesses and create jobs, economic and fiscal policy minister Motohisa Furukawa said, adding that improving the money flow could lead Japan to overcome its chronic deflation.

Of around 80 billion yen in deposits classified as inactive every year, the government thinks some 30 billion yen could be used for such a purpose, Furukawa said. But he said that the government has no intention to "act on its own to use or take away people's deposits." Furukawa also said the plan could indirectly support reconstruction of areas hit by last March's devastating earthquake and tsunami, if the envisaged funds help the launch of new businesses or promote social work by nonprofit organizations in the areas.

"It's not that the country is lacking money, but the problem is that the money is not used well. For companies and the economy to revitalize and grow...we have to create a system that would ensure money to appropriately flow, so to say, like a person with good blood circulation," Furukawa said.

But the banking industry has reservations about the idea, as financial institutions release money in inactive accounts when they receive a request from depositors to do so.Under commercial law, depositors lose access to the money after a period of five years elapses from their last transaction. In the case of "shinkin," or credit union banks, the period is 10 years. Financial institutions, however, have taken the position that they will release the money to deposit holders if a request is made even after the legal deadline has elapsed.

In South Korea and Britain, part of the money left in inactive deposits is transferred to foundations or funds to support welfare organizations and other businesses, according to information provided by a nonprofit organization.

Problems with Rebuilding

A number of people whose houses were damaged by the earthquake and tsunami were dissatisfied with the government disaster-victim aid program, which they think fails to reflect the degree of damage caused to their homes. One victims whose house was filled with sludge and flooded 80 centimeters above the floor and had to pay about ¥2 million yen for new tatami mats and other repairs that not given any government money because system only pays for damage to houses flooded by the tsunami to a depth of more than one meter above the floor. [Source: Yomiuri Shimbun, July 28, 2011]

According to the government’s criteria, houses that were washed away or flooded up to the ceiling of the first floor are considered "extensively damaged" or "destroyed," and are eligible for up to 3 million yen. Houses that were flooded more than one meter above the floor are appraised as "heavily damaged," and are eligible for up to 2.5 million yen. Houses that flooded to a depth of less than one meter above the floor are considered "moderately damaged" and are not eligible for the system.

Concrete shortages have delayed reconstruction. The Yomiuri Shimbun reported: “A serious shortage of ready-mixed concrete in areas hit by the Great East Japan Earthquake has been causing delays in reconstruction work. While high demand for ready-mixed concrete for constructing dikes, rebuilding houses and other construction projects has contributed to the shortage, the problem has been exacerbated by difficulties in storing and transporting the material. Because concrete becomes hard in a short period of time, it is difficult to make in advance, store or produce in distant locations. [Source: Yomiuri Shimbun, July 20, 2012]

Obstacles to Rebuilding

Months after the disaster severely damaged public facilities stood out undemolished against a devastated landscape that has already been cleared of debris and demolished buildings. The Yomiuri Shimbun reported: “Many local governments in cities and towns hit hard by the March 11 disaster are finding it difficult to demolish public facilities damaged by the tsunami due to regulations on the government's subsidies for demolishing and rebuilding such facilities. [Source: Yomiuri Shimbun, August 17, 2011]

Under the current framework for restoring public facilities damaged by the disaster, subsidies are paid only when local governments apply to rebuild the facilities in the same locations. The government does not provide money to local governments just for demolishing buildings.

Some local governments have yet to decide whether to relocate public facilities destroyed by the tsunami. The municipal government of Rikuzen-Takata, Iwate Prefecture, for example, plans to relocate the city hall due to concerns about future tsunami but has not done so. Although the city hall's reinforced concrete building did not collapse, the tsunami reached the fourth floor of the four-story building, rendering it permanently unusable.

Local governments, which have few financial resources left to demolish the buildings on their own, have begun criticizing the central government over flaws in the current framework for subsidizing the reconstruction of public facilities. In response to the criticism, the central government finally began discussing the creation of a new framework for such subsidies.

Firms Shun Unprofitable Small-Scale Projects in Tohoku

In December 2011, the Yomiuri Shimbun reported, Many public works projects that have been opened for bids in the tohoku region have attracted few or even no takers, as businesses appear to be shunning small-scale work as unprofitable, especially amid a labor shortage caused by increased building activity as the region recovers from the March 11 disaster. According to Miyagi Prefecture's Government Contract Division, bidding for 137 public works projects failed, with no contracts made. They account for 23 percent of the 591 projects ordered from the start of the fiscal year on April 1 through the end of November. Most of the failed projects attracted no bidders. [Source: Yomiuri Shimbun, December 26, 2011]

The failure rate in normal years is only several percent, according to the division. Businesses maintain they are short of workers as they are already doing a large amount of post-disaster reconstruction work. Many projects with no or almost no bidders are small in scale, with anticipated prices of about 30 million yen. A prefectural source said many businesses choose to bid on projects they expect to be profitable.

The prefecture's civil engineering office in Kesennuma invited tenders by Nov. 25 for 23 public works projects, all for repairing prefectural streets damaged in the disaster. Bidding on 11 of them failed. Last fiscal year, the number of projects to get such a weak response was zero. Most of the projects for which bidding failed were to repair cracks on streets. As the sites where this work needs to be done are spread over a wide area, contractors are required to move their equipment and temporary construction offices.

The civil engineering office said bidding on projects with work to be carried out at a single location are more likely to be successful. "It's true we're short of workers. But now we can pick and choose among projects as there are so many orders for disaster reconstruction," said a local construction source. "Projects requiring us to move around cost us a lot and don't pay."

In Miyako, Iwate Prefecture, bidding for 36 of 152 public works projects, including repairing damaged electrical equipment at schools, failed from June onward. The anticipated prices were less than 10 million yen in 28 of the 36 projects. In fiscal 2010, the number of projects for which bidding failed was just 13.

Another factor behind the trend is the existence of a large number of private projects, such as repairing homes and offices damaged in the disaster or constructing new ones. Such work is more attractive for businesses as the process of accepting the orders is easy, according to the Miyako local branch of the prefecture's construction companies association.

Slow Pace of Rebuilding in Minamisanriku

Reporting from Minamisanriku, Martin Fackler wrote in New York Times, “Six months after Japan’s deadly earthquake and tsunami, the naked steel frame of the former Disaster Management Center stands like a tombstone over the flattened field of weed-covered debris that was once this town’s center. People come from near and far to pray before the three-story structure, turning it into a shrine of sorts for the town officials who died here.

Amid the white flowers, smoldering incense and bottles of beer and whiskey left to comfort the dead, there are also signs of rancor. A long handwritten letter, laminated to shed the rain, criticizes the failure to tear down the structure as callous disregard for the families of those who perished. “This thing should be destroyed right away,” demands the letter, which is signed by the father of a victim.

Minamisanriku has finally finished relocating the last of its homeless residents into the 2,200 prefabricated houses it built in empty fields. Most of the town was without running water or sewage service until a month ago. The flattened downtown is still littered with mangled cars, the splintered wood of wrecked homes and the gutted shells of a few surviving concrete buildings, looking eerily unchanged from the immediate aftermath of the tsunami. “People want to keep living in this town, but look at this mess,” sighed Minoru Sato, 65, who was hired by the town to pick up debris after the tsunami washed away the sawmill where he had worked.

Indeed, residents in Minamisanriku say they feel as if they are in limbo, waiting for some signal to put the same concerted effort into rebuilding that they showed pulling one another from the rubble. That signal has yet to come. One reason for the civic paralysis is that the tsunami literally swept away the local government, destroying not just the disaster center but also the firehouse, the police station, the main hospital and the town hall, with all its records. The mayor and other surviving town officials struggled to set up new offices in trailers parked on tennis courts, and the town government is only now getting back on its feet. It has not yet even found anywhere to put the 500,000 tons of debris left by the tsunami. Work crews have temporarily stacked some of it along the devastated waterfront, separated into tidy, towering piles of twisted metal, broken concrete and tires, but it cannot stay there permanently.

Still, people here direct most of their anger at the national government. They feel neglected by Tokyo, which they say is too preoccupied with the wrecked Fukushima nuclear plant 70 miles to the south, or with political maneuvering. Town officials say they cannot even settle on how to rebuild, much less get started, without financing from Tokyo. “We have been trying to draw up our own plans, but what can we do until the national government makes up its mind?” said Kenji Endo, the vice mayor of Minamisanriku. “Frustrations are rising because we can’t see any movement toward rebuilding.”

The town says that with a budget last year of just $40 million, it has no choice but to turn to the central government to underwrite the huge costs of rebuilding. Until Tokyo sorts that out, residents here feel that they cannot move forward.

In their frustration, they are starting to turn on one another. There are bitter complaints now about local officials who kept roads from being cleared without permission, or town hall’s decision to forbid any building in the tsunami-destroyed areas until a townwide reconstruction plan is in place. The community is also being strained by the unevenness of the disaster’s toll. Some homes were wrecked; others were untouched.

Dealing with the Disaster in Minamisanriku

Today, the main roads have been reopened and there are temporary bridges over the rivers, but only a half-dozen businesses have reappeared. One is the gasoline station of Satoru Abe, who cleared away debris and got one gas pump working, by hand at first until electric power was restored in May. His office remained a tangle of crumpled metal and mud. “They won’t let us rebuild, but we cannot just wait for them, either,” said Mr. Abe, 43. “We have to eat somehow.”

Dozens of residents, in fact, said that what worried them most was how to make a living here. The waves washed away the fishing boats and seafood-processing plants that were the backbone of the local economy. Town officials said that more than 1,000 people, mostly younger residents, had already moved away in search of employment.

“Most of the young people cannot wait around for jobs, so they left,” said Kiyohiko Goto, 36, a fisherman. After the tsunami, he found his boat on a hillside a mile inland, but could not afford the $200,000 cost of a new engine. “The town will survive,” Mr. Goto said, “but I wonder how many people will still live here.”

Disagreements Over Where to Rebuild

Christopher Hawthorne wrote in the Los Angeles Times: In the towns and fishing villages devastated by the tsunami to the north of Sendai, that search for consensus has in many cases stymied the recovery process. In Onagawa, a town of 9,000 where steep, narrow valleys flow directly toward the sea, the damage still looks biblical: Three concrete buildings were ripped from their foundations and lie sideways in the muck. [Source: Christopher Hawthorne, Los Angeles Times Architecture Critic, March 8, 2012]

Onagawa's mayor, Nobutaka Azumi, settled last year on a plan to consolidate the 15 fishing villages that the city oversees, citing declining populations and dimming economic prospects there. But he was pushed out of office by older residents who aggressively opposed the idea. A new mayor has vowed to rebuild every last village.

That sharp disagreement over reconstruction goals has repeated itself in the smaller towns along the Oshika Peninsula. In early March the central government approved $3.75 billion in rebuilding grants for 59 villages and towns, part of a larger fund of $120 billion earmarked for recovery projects. (Much of that larger fund is designated for repairing roads, bridges, train lines and other infrastructure, along with paying for the temporary housing that still holds more than 300,000 displaced residents.) But the lack of consensus on basic issues calls into question precisely how the grant money will be spent.

That's the case in Kobuchihama, one of the larger fishing villages heavily damaged by the tsunami, in part because of its unusual geography. It is connected by a narrow spit of land to an offshore peninsula, with bays facing the ocean in two directions. When then tsunami hit, a pair of surges collided above the split, sending up a massive fountain of water residents say was nearly a hundred feet high.

In nearby Samenoura, a town where every house within two blocks of the sea was destroyed, an early rebuilding plan called for new housing atop a hill a safe distance from the water. But residents balked, and now a new plan, still being finalized, calls for them to move to another, slightly lower hill closer to the beach. Architect Shoko Fukuya said the impulse to get closer to the water is understandable: "Just look at the map. The coastline and fishing are in Japan's DNA."

Reconstruction Programs for Whaling and Youth Exchanges Criticized

In October 2012, Kenji Yoshimura and Junya Hashimoto wrote in the Yomiuri Shimbun, “Ministries and agencies have been taken to task over whether budgets earmarked for reconstruction after the Great East Japan Earthquake have been used for unrelated purposes. During a session of the House of Councillors Audit Committee, lawmakers noted that funds from the budget have been spent on projects totally unrelated to reconstruction in the disaster-hit areas. [Source: Kenji Yoshimura and Junya Hashimoto, Yomiuri Shimbun, October 20, 2012]

One roject that was singled out was a dubious youth exchange program. The project, which facilitates exchanges between young people in the Asia-Pacific and North American regions, had 7.2 billion yen allocated to it in a supplementary budget for fiscal 2011. The project's purpose was said to be dissemination of information about the current state of the disaster-hit areas to the rest of the world, and youngsters from 41 countries and territories were invited to Japan for about 10 days to that end. [Ibid]

In the same supplementary budget, 2.3 billion yen was allocated to measures to prevent the obstruction of Japanese whaling vessels by Sea Shepherd Conservation Society, an antiwhaling organization. The measures are under the jurisdiction of the Agriculture, Forestry and Fisheries Ministry. The spending was approved because meat from whales is sold in Ishinomaki, Miyagi Prefecture, which is a disaster-hit area and also one of the nation's largest whaling bases. The measures would contribute to reconstruction, according to the ministry. [Ibid]

But Renho of the Democratic Party of Japan, who was once minister of state for civil service reform, demanded an explanation of the kind of economic effects the measure brought about. Takahiro Sasaki, senior vice minister of agriculture, forestry and fisheries, admitted, "It's difficult to show the economic benefits with numerical figures." During the session, the ruling and opposition parties pointed fingers at each other over responsibility for the suspected use of funds for purposes unrelated to reconstruction. [Ibid]

The trigger of the budget misuse lies in a basic law for post-disaster reconstruction that was passed jointly by the DPJ, the LDP and New Komeito. The law is vaguely worded and a lax screening process. A Finance Ministry official said, "Screenings became lenient simply because it was a historic disaster.” [Ibid]

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Yomiuri Shimbun, Daily Yomiuri, Japan Times, Mainichi Shimbun, The Guardian, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

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© 2008 Jeffrey Hays

Last updated January 2013

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