Bloomberg News

Hirano Says Locals Will Leave Unless Japan Speeds Up Rebuilding

March 15, 2012

Japanese Reconstruction Minister Tatsuo Hirano said the government must accelerate its five-year plan to rebuild areas stricken by last year’s earthquake and nuclear crisis or face the prospect of abandoned cities.

“I have a sense of crisis that locals may start to leave if we don’t make significant progress,” Hirano said in an interview yesterday in Tokyo. “We have to do this in two to three years. We say the intensive period is the first five years but it means as soon as possible.”

More than 340,000 people are still living in temporary homes a year after Japan’s record earthquake and tsunami hit the northeast region and crippled the Fukushima Dai-Ichi nuclear power plant. Political squabbling has hindered reconstruction efforts and voter discontent over the response has sent the approval ratings of both major parties below 20 percent.

Less than 7 percent of the 22.5 million tons of debris left by the water has been cleared, while money allocated for reconstruction remains unspent due to red-tape. Only 55 percent of the 14.3 trillion yen ($171 billion) raised through three stimulus packages for spending this fiscal year has been allocated as of the end of January, according to the Reconstruction Agency.

“We have to hurry up but it’s not going the way local governments want to,” Hirano, 57, said, adding it will take more than a couple of years to use funds budgeted for reconstruction. Prime Minister Yoshihiko Noda on March 11 marked the anniversary of the disaster by pledging to rebuild “without delay.”

Reconstruction Demand

Economists including RBS Securities Japan Ltd. and Nomura Securities Co. expect reconstruction demand will boost the world’s third-largest economy this quarter. The Bank of Japan (8301) this week said the economy is expected to rebound to a “moderate recovery path” thanks in part to overseas growth and reconstruction-related demand.

“Reconstruction demand will increase” this quarter, Hirano said.

His agency has invited foreign business organizations including the American Chamber of Commerce to a briefing about establishing a special economic zone on March 23.

Almost 70 percent of voters don’t support the way the government has handled the reconstruction effort, according to a Yomiuri newspaper poll published March 12. Noda’s approval rating rose five percentage points from last month to 35 percent. The paper surveyed 1,041 people between March 9-11 and gave no margin of error.

To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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