Reconstruction plan: Tug-of-war between Gov't and local governments

March 11, 2015

Four years on, disaster-hit areas troubled by gov't reconstruction policy

http://mainichi.jp/english/english/newsselect/news/20150311p2a00m0na006000c.html

Prime Minister Shinzo Abe instructed relevant government ministries and agencies on March 10 to work out a framework for reconstruction assistance for the five-year period between fiscal 2016 and 2020 by the summer of this year.

Some government officials, agonizing over difficulties in securing financial resources to rebuild the country's northeast, which was hit hard by the March 11, 2011 triple disasters, are calling for the disaster-struck municipalities to become "self-sufficient." Therefore, the government, which has been shouldering all reconstruction expenses, is to look into the option of asking the disaster-hit municipalities to foot the bill for some reconstruction projects. But the local governments in the disaster-hit regions are wary about the possibility of important projects being terminated. Such being the case, talks between the central government and the municipal governments on reconstruction policy after the so-called "intensive reconstruction period" ends in March 2016 are bound to run into difficulties.

Prime Minister Abe said at a news conference on March 10, "We will consider (a new reconstruction policy) including the idea of whether local governments should shoulder some expenses while listening to the needs of disaster-stricken regions. We will help the disaster-stricken regions become self-sufficient and extend as much support as possible to them." In other words, Abe left the possibility open that disaster-hit municipalities will have to pay for some of the reconstruction projects in fiscal 2016 and thereafter. Of the 10-year reconstruction period after the March 11, 2011 triple disasters, the "intensive reconstruction period" ends with fiscal 2015. Therefore, the government needs to show a new five-year framework for a reconstruction policy by August when government ministries and agencies make budgetary requests for fiscal 2016. Reconstruction Minister Wataru Takeshita said at a news conference on March 10, "We will work it out as early as June."

In an interview with news organizations in early March, Takeshita revealed a possible plan to have disaster-struck municipalities cover some of the reconstruction costs in fiscal 2016 and thereafter. He said on March 6, "The purpose of reconstruction is to ensure that each resident stands on their own. Paying for everything out of national coffers could cause a moral hazard."

Some officials within the government and ruling parties have long pointed out that there is a limit to how much of the reconstruction can be funded by the central government. The reconstruction budget for the period through fiscal 2015 totals 26.3 trillion yen, exceeding the 25 trillion yen predicted by the government. Therefore, the government will likely have difficulties in securing financial resources for all reconstruction projects for fiscal 2016 and thereafter. Prime Minister Abe complained to Takeshita, saying, "It is indeed difficult to secure financial resources, isn't it?" Takeshita responded, "We will do our utmost in negotiations with the Finance Ministry."

Many government and ruling party officials still remember the so-called 2013 "guidelines for accelerating reconstruction of Fukushima" in which the government effectively abandoned efforts to help return all Fukushima residents to their homes and instead included programs to help them settle elsewhere. Tadamori Oshima, head of the ruling Liberal Democratic Party's task force on accelerating post-disaster reconstruction, played a central role in working out a ruling party proposal for the guidelines and the government accepted it without any changes. In other words, the ruling parties took the blame for the failure on behalf of the government. The ruling parties are poised to compile their fifth proposal as early as May and provide indirect support for the government.

However, municipalities, particularly small local governments in the hardest-hit prefectures of Iwate, Miyagi and Fukushima, which want the government to continue funding and improving reconstruction projects, are expected to object to recommendations that they take on some of the costs. For this reason, Takeshita is quoted as telling people close to him, "I will become the bad guy. I will pick up the pieces that Oshima didn't get." At the same time, Takeshita expressed his worries, saying, "I can't make the prime minister the bad guy." Some ruling party officials are worried that the issue could affect the unified local elections in April.

The Reconstruction Agency has started to examine past reconstruction projects and is categorizing projects as those that should be financed by the government in the future and those that should not. The agency is likely to assign central government funding to key projects to help affected communities relocate to higher ground and build reconstruction housing and levees; projects to bring an end to the Fukushima nuclear crisis; and measures to deal with damages caused by harmful rumors about radiation contamination. But there is a deep-rooted view that excessive government spending for other reconstruction projects could "immerse (disaster-stricken regions) in subsidies." The government wants to streamline reconstruction projects by employing a "selection and concentration" strategy of cutting back on projects and having municipal governments cover some reconstruction expenses. But the tug of war between the central government and the three prefectural governments, which want the national government to set aside about 8.1 trillion yen for projects to be carried out after fiscal 2016, is likely to intensify further.

March 11, 2015(Mainichi Japan)