The EconomistJune 29th 2019 Asia 532
1or snack bars, bar the konbini(convenience
store) on the outskirts of the town. In the
1980s, residents say, there were dozens of
lunch joints. Now the townsfolk must
drive elsewhere or wait for occasional vis-
its from trucks that sell vegetables.
The three schools have only 30 to 40
children each. From October one will stop
accepting new pupils. “It is not good for the
children,” says Mr Nakajima. “They need
company, competition, a healthy atmo-
sphere.” In depopulated areas primary
schools have on average 118 pupils each;
those in the rest of the country have 320.
There are also fewer paediatricians and ob-
stetricians than the national average.
The national government wants to raise
the fertility rate from 1.4 children per wom-
an to 1.8. To that end, it is trying to provide
more support for families, such as making
nursery free. It has also begun admitting
more migrants, but not enough to compen-
sate for the decline in the native popula-
tion—and anyway, the government insists
it will not let them settle permanently.
What is more, immigrants, like Japanese
themselves, prefer to live in cities.
Shrinking localities tend to focus on
trying to get people from elsewhere in Ja-
pan to move there. They talk not just of en-
couraging people to return to the country-
side from cities but also of persuading
people to move from towns to rural areas.
Many offer families free housing and other
subsidies to attract younger people. Ima-
betsu offers free school lunches and free
cancer treatment. But the number of peo-
ple such incentives attract is very small
(zero in Imabetsu’s case). They “will never
change the demographic dynamics of slow,
steady decline”, says Peter Matanle of Shef-
field University in Britain.
There are some more successful cam-
paigns, of course. Tokushima prefecture
has attracted itcompanies by setting up a
fast internet connection. But as Karen Mak-
ishima, an mpfor Kanagawa in eastern Ja-
pan, points out: “Many towns want to have
people move there permanently. But Japan
as a whole is losing people so if we shiftpeople, other places lose out.” She thinks
the solution is to work on attracting do-
mestic and especially international tou-
rism, which is growing rapidly. To that end,
she is trying to encourage people to buy
holiday homes in her region, or to make
regular visits, in part by creating relation-
ships between visitors and locals. The de-
populating islands of the Seto Inland Sea,
in south-eastern Japan, are a model for this
sort of initiative. Visitors flock there to see
new art installations.
In the absence of such a lifeline, the lo-
cal government in Imabetsu is struggling
to pay for education, health care and other
services. Its budget is 2.4bn yen ($223m) a
year. Only half of that comes from the na-
tional government on a routine basis, al-
though one-off grants and money fun-
nelled via the prefectural government help
make up the shortfall. Local tax revenue
has been dwindling for years, and now
brings in only 200m yen a year. The town
has resorted at times to borrowing, Mr Na-
kajima says, but the cost of servicing the
debt only adds to its fiscal problems in the
long run.
The central government has tried to
help places like Imabetsu, not only by up-
ping the budget for “rural revitalisation”,
but also through a scheme called furusato
nozei, which allows taxpayers to send a pro-
portion of their taxes to a locality of their
choice, instead of the one where they live
(towns and villages compete for this cash
by offering gifts in return, such as local
sake or dried fish). The intention is for emi-
grants from rural areas to the cities to be
able to funnel money to their hometowns.
Nonetheless, small towns are having to
cut back. In some areas local authorities
are trying to gather services in one town,
from which they offer transport to other
towns and villages in a sort of hub-and-
spoke model. Others are looking at ride-
sharing as a way to relieve the pressure on,
or replace, public transport. Private busi-
nesses such as konbini and the post office,
which by law has to have outposts in re-
mote places, are also being used to offer
public services. Technology could help. “It
may be fun to get pizza by drone in Tokyo,
but more important is getting milk and
newspapers to elderly people in rural ar-
eas,” says Ms Makishima. She also advo-
cates online medical consultations.
Mr Nakajima’s vision for Imabetsu is
modest: to promote tourism, preserve ex-
isting industries rather than try to conjure
up new ones, use remote instruction to
keep schools going and create a single hub
for people to obtain information and ser-
vices. Yet even that is a struggle, he says.
For example, the town government looked
at taxi-sharing, but found it unfeasible
since Imabetsu has only one taxi. Next
time he runs, it may have to be with a vision
of even fewer people. 7Memento AomoriSource:NationalInstituteofPopulation
andSocialSecurityResearchJapan, population forecasts, 2015=100607080901002015 20 25 30 35 40 45JapanAomori prefecture106.40.82045 total, m
Mike pompeo, America’s secretary of
state, had two objectives during his
trip to Delhi on June 25th. The first was to
affirm India’s importance to America,
which envisages a grand Indo-Pacific alli-
ance to counter China. The second was to
soothe an increasingly heated row about
trade. Achieving the first was easy enough,
but the second is proving harder.
America and India have bickered about
trade for years. India’s average tariff is high,
at around 13%. Its bureaucrats are also keen
on other barriers to trade, from obscure
rules on packaging to prohibitive red-tape
on the import of dairy products. But over
the past few years Narendra Modi, India’s
prime minister, has further inflamed these
irritations. His government has increased
tariffs on lots of American exports, includ-
ing telecoms equipment, medical devices
and nuts. It has also expanded rules favour-
ing locally made goods in public procure-
ment and has proposed a new law demand-
ing that tech firms store data about Indian
customers within India. And last year it
abruptly announced rules on e-commerce
that seemed to target two American firms,
Amazon and Walmart, the latter through
its purchase of Flipkart, a fast-growing lo-
cal e-tailer.
The complaints of American trade ne-
gotiators about Indian protectionism,
however, are typically drowned out by dip-
lomats and soldiers, who see India as a nat-
ural and indispensable ally against China.
The two countries established a new high-
level diplomatic dialogue last year and
have increased their military co-operation.
America wants India to stop importing oil
from Iran, which India recently and reluc-DELHI
America faces a choice between
geopolitics and tradeIndia and AmericaA Harley-hating
ally
Losing balanceSource:BureauofEconomicAnalysisIndia, goods and services trade
with United States, $bn-60-3003060901999 2005 10 15 18ExportsImportsBalance