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Wednesday, July 7, 2010
OKINAWA'S HOSTAGE ECONOMY
Special burden, special economic benefit
NAGO, Okinawa Pref. — On Aug. 4, 2005, then Okinawa Gov. Keiichi Inamine was told by Vice Defense Minister Takemasa Moriya that the United States had agreed to return all of the major military bases south of Kadena, central Okinawa Island, to Japan on condition that the Futenma air base be relocated to Nago, farther north.
Inamine's reaction surprised Moriya at their Tokyo hotel meeting. According to Moriya, Inamine said "nobody in Okinawa wants (a) large-scale reversion," apparently due to concerns over the expected loss of economic benefits from the U.S. bases.
"I was surprised because I thought he would be happy to hear about the agreement," Moriya told The Japan Times during a recent interview.
Now Moriya, who will publish a memoir Friday, believes Inamine showed his true colors during the meeting.
Moriya had long suspected Inamine and other Okinawa leaders were conniving for more economic assistance from the central government by demanding compensation for hosting U.S. bases.
Inamine vehemently denied making the reversion-aversion remark, which was first reported on the front page of the major Okinawa newspaper Ryukyu Shimpo last Nov. 18. He was furious during a recent telephone interview with The Japan Times.
"I never said (nobody) wants (a) large-scale reversion of U.S. bases. Never a remark like that!" Inamine said.
Inamine said he would welcome any large-scale return of the bases but at the same time claimed he was just pointing out the various problems that would ensue if such action occurred.
"Moriya may remember just the latter part of what I said, if you interpret him favorably," Inamine said.
"Otherwise, he is just trying to shift the responsibility to Okinawa" for the prolonged struggle to relocate the Futenma base to Nago.
Who said what in the conversation basically can't amount to much because it wasn't recorded.
But it is definitely true Okinawa has much to lose financially if the bases disappeared, despite the emotional calls by residents for the U.S. military to clear out.
The prefectural government defines Okinawa's "base-related revenue" as wages paid to Japanese workers on U.S. bases, rent paid to landowners and other general spending by U.S. forces, service members and their dependents in Okinawa.
That revenue totaled ¥208.8 billion in fiscal 2007, or about 5.3 percent of the gross prefectural income of Okinawa residents.
Antibase activists say this amount is less than half of the revenue that tourism brings to Okinawa. But the figure doesn't include the central government's special expenditures to help promote the prefecture's economy, including vast outlays to compensate for the burden of hosting the bases.
In fiscal 2009, the central government spent ¥244.7 billion under the temporary Okinawa Development Promotion Special Law, about 80 percent of which went to construction-related public works projects, according to the Cabinet Office.
The central government gives subsidies to cover 90 percent to 95 percent of the costs for public works in Okinawa, while that ratio is usually around 50 percent for other prefectures.
Okinawa also gets several exclusive tax breaks. For example, the taxes on "awamori" liquor and locally brewed beer are 20 percent to 35 percent lower than on similar beverages made in other prefectures.
To explain the special measures for Okinawa, a policy paper of the Cabinet Office cites three points: Okinawa, unlike other prefectures, experienced a World War II ground battle and the U.S. military occupation there lasted until 1972; the prefecture has many remote islands far from the mainland; and Okinawa is shouldering the burden of hosting many U.S. bases.
"The louder that Okinawan people have expressed their opposition to the U.S. bases, the more economic assistance has been injected into (Okinawa) to tone down that voice," wrote Jun Okubo, former Okinawa bureau chief of the business daily Nikkei Shimbun in a book published last year.
The special economic measures for Okinawa have continued since 1972, with the 10-year temporary economic promotion law being extended three times.
As a result, the prefectural government now depends heavily on grants and subsidies from the central government, despite the long-held wish of many residents to be independent of Tokyo's influence.
The prefecture's self-funded income — which excludes grants and subsidies from the central government and sales of prefectural bonds — accounted for only 29 percent of its total revenues for fiscal 2008, against an average of 48.1 percent for all 47 prefectures, according to Okinawa.
During the telephone interview, Inamine didn't deny the importance of the economic assistance from the central government to help stimulate the local economy. The prefecture has long had Japan's lowest per capita income and highest jobless rate, particularly among young people.
But Okinawa residents were also angered by Yukio Hatoyama's repeated flip-flops and broken election promise to move the Futenma base outside the prefecture, Inamine said.
Hatoyama stepped down as prime minister and head of the Democratic Party of Japan early last month in large part because of the Futenma row.
"Okinawa is sitting on the magma (of the antibase sentiment). It's like the volcano of Iceland, and Hatoyama opened a hole," Inamine said, noting opinion polls show about 80 percent of Okinawans opposed the plan to relocate Futenma to the Henoko coast of Nago.
"At this stage, no one (in Okinawa) will listen even if there's more talk of economic assistance," Inamine said.
People in the prefecture hold strong antimilitary sentiment in general, given the trauma of the Battle of Okinawa, during which 25 percent of the local residents died, and the survivors had to contend with the postwar U.S. occupation until 1972.
The special Okinawa economic promotion law will expire in March 2012, and the central government will soon face the critical decision of whether to extend it once again in a bid to tamp down the frustration in the prefecture.
But the people of Okinawa may finally have started to realize pork-barrel construction projects will no longer get their sluggish economy moving or bring about financial independence.
In Nago, base opponent Susumi Inamine was elected mayor in January to replace the probase Yoshikazu Shimabukuro, who emphasized the economic benefits he brought to the city by approving the Henoko base plan.
During the telephone interview, Inamine denied he intentionally delayed the relocation process of the Futenma base as Moriya suspected.
The relocation was originally agreed to by Japan and the United States in 1996, but strong protests from locals and environmentalists prevented any progress. Inamine served two terms from 1998 through 2006.
Inamine said he just couldn't forcibly push for the relocation because it would have drawn the anger of Okinawa voters and made his re-election unlikely.
"Unless you win an election and gain approval of the Okinawan people, you can't make any progress (on base-related issues.) Now is the perfect example of a case like that," Inamine said.
Indeed, facing re-election in November, current Gov. Hirokazu Nakaima has started saying it is "extremely severe" for the prefecture to have to accept the Henoko plan now. He was originally believed to be supportive of the Tokyo-proposed plan.