The private sector, not the government, should play the leading role in revitalizing local economies to prevent depopulated municipalities from disappearing, according to Hiroya Masuda, chairman of the Japan Policy Council.

The council, a private research institute, released a report in 2014 that said an estimated 896, or 50 percent, of all municipalities throughout Japan could vanish by 2040 because the number of women in the 20-39 age group could more than halve in those areas.

The report proposed the government take measures to lift the dwindling birthrate and stem the population influx into Tokyo.

After the report was released, the second administration of Prime Minister Shinzo Abe that year started a project to reinvigorate local economies.

Masuda says some struggling municipalities have now become overly dependent on government subsidies when private-sector endeavors would be more effective in the long term.

Born in 1951, Masuda, 68, a member of the Cabinet Office’s panel on revitalization of town, people and employment, joined the now-defunct Construction Ministry and then served three terms as Iwate governor from 1995.

He was internal affairs minister in 2007 and 2008.

Masuda is currently a visiting professor at the Graduate School of Public Policy of the University of Tokyo. He also became president of Japan Post Holdings Co. in January this year.

In a recent interview with The Asahi Shimbun, Masuda explained the future of local revitalization and other topics.

Excerpts of the interview follow:

***

Question: Why did you compile the Japan Policy Council report, which led to the government’s local promotion policy?

Masuda: At the time, there was little sense of crisis about the population decrease because the population had been rising until 2008. I took advantage of population estimates by municipality, which are released by the National Institute of Population and Social Security Research once every five years, to provide a foundation for discussions on the sustainability of municipalities based on population data.

I chose the strong word “disappear” to raise public awareness.

Q: How do you assess the six-year local revitalization endeavor?

A: Underpopulated areas have had increasingly fewer residents, and the population influx into Tokyo has further accelerated. That has widened the gap between the two types of region.

Our undisclosed estimate, which uses the research institute’s population data developed in 2018 and based on the 2015 national census, shows the number of municipalities that could disappear has risen from 896 to 927.

It was good that the state’s general strategy included a targeted birthrate of 1.8 and other comprehensive steps. But after the headquarters on children and child rearing was later introduced, the issues of falling newborn numbers and work styles were separated although they are connected to the population decline problem.

Those issues should have been discussed in an integrated manner under the local revitalization policy.

On top of that, subsidies can help to start local promotion programs but offer little to continue those efforts. Municipalities vied for the subsidies, simply underscoring the dependence on public funds.

Q: What steps are needed to stop the influx into Tokyo?

A: The major factor behind Tokyo’s increasingly dense population is a huge influx of new college students and new recruits. It is deeply connected to companies’ traditions of lifetime employment and hiring new graduates en masse.

More people left Tokyo than those flowing into the capital for four straight months until October due to the novel coronavirus pandemic. Whether the trend continues will depend on if teleworking and other new work styles become the norm.

Q: How can municipalities deal with their decreasing populations?

A: All parties together should consider how to retain their communities on the assumption that their populations will decline. Local areas should be categorized into three groups--major cities, core urban zones and rural regions--so that their separated roles can be weighed.

After that process, local communities should be redeveloped, taking into account the circumstances around their industries as well as the ratios of young and elderly residents.

The general strategies of municipalities, however, rarely reflect their own unique features. Their activities rely heavily on subsidies, and the public sector plays too large a part.

In Kamiyama, Tokushima Prefecture, a nonprofit organization is leading the town development, and more interesting endeavors can be made if the private sector takes the initiative.

Q: Do you think critically depopulated areas have no choice but to disappear?

A: Populations are denser in urban city areas from a macroscopic viewpoint, but this has nothing to do with individuals’ way of thinking and living. Some people, in fact, say they prefer rural zones.

Even with no newborns, municipalities can still do something. What is important for difficult-to-retain communities is how to lure people from outside the areas. The strength of the community could also change based on whether it is open to outsiders.

Q: What role should local universities and banks play in local revitalization?

A: Universities with large numbers of young students can play a significant role. Following the introduction of Kochi University’s faculty of local cooperation, colleges have set up a considerable number of departments that emphasize local activities.

If interesting learning programs become available in local regions, offering students more choices when they select universities to attend, more young people will work in those areas.

I also have high expectations for local banks because they well understand the financial strengths of local businesses.

One system has been introduced under which local banks and other parties find personnel for local companies as part of revitalization efforts, and subsidies are available under the mechanism.

Q: Why has the number of members of the internal affairs ministry’s local transfer support project risen under the local revitalization policy?

A: The ratio of those born in the Tokyo metropolitan area has increased every year to 30 percent. If children from the generation with no links to local regions grow up to be adults, they will have no chance to relocate to regions outside the capital.

From now on, it will become more significant for the government to create a route leading to local areas.

(This interview was conducted by Koji Shimizu, a staff writer.)