Japan’s economic recovery has begun to trickle down to its local sectors. The contrast with the period of economic recovery from the IT crisis in 2002 must be observed. In 2002, the focal point of the local economic recovery took place in cities such as Nagoya, where Toyota’s influence is very strong. Notwithstanding the recent recovery in heavy industry, the local economy benefits more from the increased number of tourists. In August alone, New Chitose Inbternational Airport in Hokkaido counted the 17% increase in foreign visitors. Many are from Southeast Asian countries such as Malaysia and Indonesia. There is also an amazing increase of visitors from Thailand by four times. This is most likely due to the process of acquiring a tourist visa being relaxed for Thais recently. Thai Airways now has daily flights between Thai-New Chitose, increased from three per week.
The main reason for the increase of tourists in Japan is largely due to the weakened yen. There is at least 15% difference from the last summer to this year. Many tourists crowd into famous department stores like Takashimaya in Osaka, or Mitsukoshi in Tokyo. But not just in major cities, other duty-free shops also attract many visitors. Many local governments are trying to bring tourists by preparing foreigner-friendly signs and diversity of food menus for visitors with dietary restrictions. Will this increase of visitors continue? By 2020, the government projects 25 million visitors (8.4 million for 2012) with the spending of tourists to 30 trillion yen (300 billion USD) from 25.5 trillion in 2009. With the Tokyo Olympics of 2020, these numbers are definitely not impossible.
The question is whether this would truly revive the exhausted local economy. For sure, Tokyo and other major cities will continue to grow. They have been, though some more than others, growing even in the midst of so-called the lost 20 years of Japanese economy. But the major victim of the economic downturn has been the local economy. In spite of the increase of tourists in regions other than major cities, the hope of local economy still depends on the governmental work. In the first fiscal quarter, the government spent 25.7 trillion yen on public works. This general tendency will continue. The problem is that this is the old method of economic growth, which Japan wore down in 1980s. The task of the government is to deregulate and encourage various “soft-power” potentials inherent in Japanese economy. Tourism is definitely one of them. So let the government focus and spend money on new methods.
[image via Shutterstock]
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