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5. Kakusa Zesei and the Promotion and Development of Okinawa

In December 1972, the long-anticipated ten-year Okinawa Shinko Kaihatsu Keikaku (Okinawa Promotion and Development Plan) was enacted as part of a three-pronged economic strategy that included the Shinko Kaihatsu Tokubetsu Sochiho, or ‘Promotion and Development Special Measures;’ the Okinawa Kaihatsucho Secchiho, ‘Law Establishing the Okinawa Development Agency (ODA);’ and Okinawa Shinko Kaihatsu Kinyu Kokoho, ‘Okinawa Promotion and Development Finance Corporation (OPDFC) Law.’[1] In reverse, the OPDFC grew out of the need for an integrated long-term credit financing mechanism that functioned more effectively than the USCAR-established Ryukyu Development Loan Corporation (RDLC).[2] The OPDFC, based in Naha, while technically part of the ODA[3] performs such an important role in “advancing Okinawa’s industrial development”[4] it warranted distinct legislation its less-glamorous fact-finding counterpart, the Okinawa Sogo Jimukyoku, or Okinawa General Bureau (OGB), did not.[5] Since 1972 the OPDFC has provided 4-trillion-yen in a variety of loans, mostly in housing and industrial development, 1.7-trillion-yen of which is currently outstanding. This accounts for 35% of all loans outstanding of all banks in Okinawa. The ODA, located in Tokyo, was set up as “an extra-ministerial agency of the Prime Minister’s Office with a state minister at the helm.”[6] The ODA mission was to “devise and advance policies for Okinawa’s economic promotion and social development” and to “coordinate the organs responsible for implementation,”[7] which would be its Tokyo office along with the OGB and OPDFC. The ODA then, is a revenue-raising GOJ body unique to Okinawa and Hokkaido, areas of Japan seen as under-developed and in need of assistance. From its establishment on 13th May 1972 to the end of FY 2000 the ODA directed 6.4-trillion yen into Okinawa, of which 5.9-trillion was channelled into public works, like roads, ports, harbours, and agricultural modernisation projects.[8] In addition, in 2000 a superficial GOJ departmental reorganisation saw the ODA renamed as the Okinawa tanto bukyoku, or Okinawa Oversight Office (OOO), although it continues to perform the same function as before.

According to legislation covering establishment of the ODA and in the Shinko Kaihatsu Tokubetsu Sochiho, guidelines are laid out on formulation of the long-term development plans. In the first part, the ODA created a 25-person Shinko Kaihatsu Shingikai (Promotion and Development Deliberative Commission), the membership of which included Okinawan and GOJ representatives.[9] The Shingikai did not devise policy, rather it rejected or rubber-stamped it. Contrary to expectations, perhaps, the ODA did not create Okinawa’s development plans; at least not at that time. Article 4 of the Shinko Kaihatsu Tokubetsu Sochiho clearly states that “the Okinawa Governor shall devise a Promotion and Development Plan proposal that will be submitted to the Prime Minister” who will “put the proposal before the Shingikai and related agencies of the GOJ for their consideration,” before being returned to the Prime Minister who will then “notify the Okinawa Governor of the decision.”[10] Within Okinawa, newly-elected Governor Yara took the first step toward formulation of a plan. On 28th July 1972, he established the Okinawa-ken Shinko Kaihatsu Shingikai (Okinawa Prefecture Promotion and Development Deliberative Commission) comprised of 30 members and 60 specialist contributors. The Okinawa Shingikai[11] was free to construct any plan it wanted, provided that it took account of target areas given in Article 3 of the Shinko Kaihatsu Tokubetsu Sochiho, like tourist promotion, effective land use policies, water resource management, etc.,[12] and the broad comprehensive development plans by the Kokudocho (National Land Agency).[13] The most recent Kokudocho plan was issued on 30th May 1969, just prior to the reversion announcement and had to be updated. Part was revised upon reversion with a short addendum under which Okinawa would be treated as one bloc in national plans.[14] Located at the semi-tropical southernmost edge of the state, these unique geographical and environmental attributes would be utilised to promote responsible development. The primary goals were eliminating disparities between Okinawa and Japan (kakusa zesei); building foundations for self-reliant development (jiritsuteki hatten); developing new transport and communications networks, and; advancing industrial development.[15] By the latter part of September an Okinawa-ken Shinko Kaihatsu Keikaku draft had been prepared. Once agreed upon by the Okinawa Shingikai it was handed to the Prime Minister on 21st October 1972, and finally Cabinet-approved on 18th December.

Beyond the hullabaloo about Okinawa’s dire economic conditions and the need for plans and policies and cash to address this, one should not forget that Okinawa can not accurately be described as poor at the time of reversion. As has been outlined, real term economic growth from the mid-1960’s exceeded Japan, and while Okinawa’s PCI was around 60-65% the national average, this was double Taiwan and the Philippines. Okinawa’s problem was one of relativity, in that relative to national average indicators across a broad social and economic spectrum it placed low, or at rock bottom, amongst Japan’s 47 prefectures, but not necessarily as low in comparison with many sovereign states, hence the idea of kakusa zesei, or correcting differentials between Okinawa and the Japanese mainland (hondo)[16] in social overhead capital (shakai shihon), the living environment (seikatsu kankyo), health and social welfare systems, education, PCI, and the like. Okinawa lagged woefully behind in per capita paved roads, hospitals, schools, orphanages, homes for the aged, public parks, housing, and many other categories.[17] In very few categories did Okinawa not rank last of all 47 prefectures. In addition, and because US military bases hog so much land, Okinawa continues to rank last in terms of space per resident.[18] This list could continue at much greater length. The goals of the first plan reflected this and were given as follows:


“The primary objectives of this plan are to swiftly rectify the differences that currently exist between Okinawa and the Japanese main islands in all areas, to raise standards prefecture-wide to the national level, to prepare the foundations for self-reliant development by utilising our region’s unique characteristics, and to create a peaceful, bright, and prosperous (heiwa de akarui yutakana) Okinawa Prefecture.”[19]


For many, if not most of the problem areas above, investment was the primary requirement. Economist and current Deputy Governor of Okinawa, Makino Hirotaka, argued in 1984 that promoting economic development and kakusa zesei was a national obligation (kuni no sekimu) and that GOJ progress would be the touchstone by which reversion could be judged.[20] From fairly humble beginnings in 1972 (37-billion yen), by the end of FY 2000 the GOJ had invested 6.4-trillion yen, which (at $1=120-yen) is equivalent to a whopping $53-billion. With the exception of those who live in rural areas to the north or on remote southern islands, few would attempt to argue that this investment has not had remarkable success in bringing Okinawa up to standard across the board. Okinawa is now at least on a par with other prefectures; sometimes worse off and sometimes better off. Two beneficiaries of GOJ infrastructural investment have been public employment, given the growth in government administrative services, and the construction industry. While the percentage of those involved in construction has not changed dramatically between 1972 (43,000-persons, 11.8% of the workforce) and 1999 (77,000-persons, 13.6%),[21] one needs to recognise two interrelated points: firstly, that construction has played an abnormally large role in the economy since the 1950’s base-building explosion, and; secondly, therefore, that but for the huge GOJ investment in public works, especially from 1975, the industry may not have survived the contraction in base-related work with reversion and the end of the Vietnam War.[22] Since 1990 private construction orders have come to equal public orders and will soon surely overtake as the GOJ finds itself with less money for public works.[23] In terms of Okinawa’s PCI level there has been success and failure. On the former, Okinawa has consistently matched or exceeded goals outlined in development plans. In the first plan the objective for 1982 was “a three-fold increase on the 1972 level of 330,000-yen,”[24] but it actually reached 1,160,000-yen. By 1998, Okinawa’s PCI had jumped to 2,185,000-yen, yet the prefecture still ranked 47th out of 47.[25] The idea of kakusa zesei in PCI was finally abandoned by the Okinawa Prefectural Government (OPG). The local and national economies have been growing at a parallel pace, making it very unlikely Okinawa could ever catch up. The four prefectures of Kagoshima, Miyazaki, Aomori, and Shimane, for example, are not radically different from Okinawa. None of them has managed to raise PCI level against the national average beyond 79% since 1972.[26] In reality, comparative purchasing power is more relevant than PCI level, and in this regard Okinawa’s position at 47th is a truer measure of weakness.

Kakusa zesei was such an important element that much space was given over to infrastructure betterment, improvement of education, health, welfare systems, and the like, in the first plan. What remained covered anticipated conditions at the end of the target period (1982), and the ideal direction of the economy for self-reliance. Not surprisingly, planners counted on a post-US occupation shift toward normality in the structure of the economy. That is, a greater balance between goods-producing primary and secondary sectors and a tertiary sector which had become over-bloated as a result of military base reliance. In short, it was asserted that within the plan’s 10-year life the population would rise from 950,000 to 1-million, and gross prefectural product (GPP) from 310-billion yen to around 1-trillion yen.[27] In terms of where the money would come the primary sector was expected to contribute 5% of GPP in 1982, rather than 8% in 1972; the secondary sector (through increased manufacturing) 30%, rather than 18% and; the tertiary sector would be cut back from 74%, as it then contributed, to 65%.[28] The consensus appears to be that bases would be of less importance to the tertiary sector by 1982 but that tourism would pick up the slack. Clearly, a number of miscalculations were made. In the first part, Okinawa’s population had reached 1.1-million by 1982, constituting a 16% rather than 5% increase. GPP had risen over the period, but to 1,734-billion yen.[29] More troubling were the structural changes hoped for that did not occur. The primary sector dropped to 5% in terms of contribution to GPP, but this was less the result of rationalisation and modernisation than a declining trend with staples like sugarcane and pineapple. There was virtually no change in the role of the tertiary sector to GPP, and the much-vaunted boost in manufacturing just never materialised, there being only a minor shift in the role of the secondary sector to 21% of GPP. Unbridled optimism on the part of planners toward manufacturing was admirable but unrealistic. In all honesty, Okinawa was/is unsuited. Based on what an average manufacturing plant requires and what Okinawa offers, consider the following: the cost of electricity is higher than any other prefecture; internal transportation infrastructure is woeful and there is no railway system, and; the costs of transporting products to domestic and external markets are higher than many other prefectures.[30] Structurally, problems have persisted, but after an initial difficult period economic growth began to equal or exceed national averages. Arguably, Okinawa reached a point in the 1980’s where structural economic deficiencies became of lesser importance than the vast influx of cash and marked improvement in the overall standard of living.

[1] Based in Okinawa, its function corresponded with six GOJ institutions: the Japan Development Bank, the Small Business Finance Corporation, the People's Finance Corporation, the Housing Loan Corporation, the Agriculture, Forestry and Fisheries Finance Corporation, the Social Welfare and Medical Service Corporation and the Environmental Sanitation Business Finance Corporation. The OPDFC covers a wide area, supporting basic industries, promoting regional development projects, strengthening small- and medium-sized enterprises (defined as those with less than 100-million-yen in capital and 300 employees), encouraging agriculture, home-building, etc. It has loaned approximately 4-trillion-yen since 1972, with 1.7-trillion-yen in loans outstanding. Loans are allocated consistent with the aims of the Okinawa Shinko Kaihatsu Keikaku.

[2] All the development plans covered earlier in this text cried out for such an institution. For a good overall analysis of existing financial mechanisms see Suzuki Kinyu Chosadan, Okinawa no kinyu kiko nitsuite (Tokyo: GOJ, March 1969).

[3] By Article 5 of the Okinawa Kaihatsucho Secchiho, the agency was divided into two departments or bureaus (kyoku): the shinkokyoku (promotion bureau) and somukyoku (general affairs bureau). The main functions of the OPDFC had been outlined in Article 4 of the Okinawa fukki taisaku yoko – dainijibun, in March 1971, but were more comprehensively described in Okinawa Shinko Kaihatsu Kinyu Koko legislation on 13th May 1972. Okinawa fukki no kiroku, 874-888.

[4] Okinawa fukki no kiroku, 874-888. For the OPDFC law and all subsequent revisions through to 1991, see Okinawa Shinko Kaihatsu Kinyu Koko, Okinawa shinko kaihatsu kinyu koko nijunenshi (Naha: Okinawa Shinko Kaihatsu Kinyu Koko, 1993), Appendixes 25-83.

[5] The Okinawa Sogo Jimukyoku establishment guidelines were laid out in the final third phase of the Okinawa fukki taisaku yoko (daisanjibun) in September 1971. Its role was to “carry out necessary surveys on behalf of the Okinawa Development Agency,” and will deal with areas such as agricultural administration, finances, trade and industry, transportation, and state construction projects. Okinawa fukki no kiroku, 688. The OGB is vital to both the OPDFC and ODA. On the OGB and its activities see Okinawa Kaihatsucho, Okinawa Sogo Jimukyoku, Okinawa Sogo Jimukyoku 20 nen no arumi (Naha: Okinawa Kaihatsucho, Okinawa Sogo Jimukyoku, 1992), and its yearly statistical Okinawa-ken keizai no gaikyo reports.

[6] See Okinawa fukki taisaku yoko – daisanjibun in Okinawa fukki no kiroku, 688-689.

[7] Okinawa fukki no kiroku, 688. On the ODA see Nakachi Hiroshi ‘Okinawa kaihatsuchoron,’ (in two parts) Ryudai Hogaku 48 (1992) and 50 (1993), respectively.

[8] OPDFC, Choseibu, Okinawa keizai handobukku: 2000 nendo (Naha: OPDFC, 2000), 71. Farmers in Kin, for example, have the benefit of state-of-the-art irrigation systems.

[9] This included 13 staff from the related GOJ agencies in Tokyo, the Okinawa Governor, the Head of the Okinawa Assembly, two of Okinawa’s shi-cho-son mayors, two shi-cho-son Assembly Heads, and 6 academics. As is clear, while Okinawa is well-represented, the GOJ holds a 13-person majority on a 25-person committee. Article 8, Shinko Kaihatsu Tokubetsu Sochiho, 31st December 1971. Okinawa fukki no kiroku, 856-857.

[10] Article 4, Shinko Kaihatsu Tokubetsu Sochiho, 31st December 1971. Okinawa fukki no kiroku, 843. The current writer makes the point because the system did not persist as outlined above. It is widely acknowledged in Okinawa that the 3rd Promotion and Development Plan (1991-2001) was cooked-up in Tokyo. See comments by ex-Vice Governor in the Ota administration Yoshimoto Masanori in ‘Shin seiki e no Okinawa no bijiyon: hondo fukki 25 shunen ni atate," Nira Policy Research 4 (1997), 56-57.

[11] Okinawa Shingikai will always be used in reference to the local Okinawan commission. The ODA Shingikai will be given simply as Shingikai.

[12] Okinawa fukki no kiroku, 842.

[13] For an overview of the Kokudocho and Okinawa’s place in planning in the post-reversion period see Yokkaichi Masatoshi, ‘Kokudo keikaku kara mita Okinawa: kaihatsu no rekishi,’ NIRA Seisaku Kenkyu 4 (1997), 10-13.

[14] Sengo Okinawa keizaishi, 1254.

[15] ‘Okinawa Kaihatsu no Kihon Koso,’ Ibid., 1254-55, and NIRA Seisaku Kenkyu 4 (1997), 12.

[16] As one scholar pointed out, in the late-1980’s Okinawa’s PCI exceeded three highly-industrialised G7 countries: France, Italy, and Britain. If only Okinawa fared better in comparative purchasing power, he laments. Higa Teruyuki, 'The Cycle of Dependency: Okinawa’s Economy,’ in Islands: A Challenge to the Future – Global Networking of Island Communities, Proceedings of the Journalists Global Islands Symposium, (Naha: J-GIS ‘93 Organising Committee, 1993), 103. Okinawa has fallen behind these states in terms of PCI level since, but is still above Spain, Portugal, and many others.

[17] Statistical information on these categories can be found in the regular Okinawa kensei no aramashi (Naha: Okinawa-ken, published yearly).

[18] In 1992, Kakazu Hiroshi wrote that in Okinawa the population per square kilometre stands at 540, in contrast to 332 on the mainland. Kakazu Hiroshi, ‘Ichi no higeki kara ichi no yui e: fukki 20 nen, soshite kore kara” Sekai (June 1992), 219. 

[19] Okinawa Shinko Kaihatsu Keikaku, enacted into law on 18th December 1972. Okinawa-ken, Kikaku Choseishitsu, Okinawa no shinko kaihatsu keikaku kankei shiryo (Naha: Okinawa-ken, 1995), 10.

[20] Sengo Okinawa keizaishi, 1300.

[21] OPDFC, Choseibu, Okinawa keizai handobukku: 2000 nendo (Naha: OPDFC, 2000), 10.

[22] The issue of base redundancies was still a problem in the Second Promotion and Development Plan, set to run from 1982-92. See Dainiji Shinko Kaihatsu Keikaku enacted on 5th August 1982. Okinawa-ken, Kikaku Choseishitsu, Okinawa no shinko kaihatsu keikaku kankei shiryo (Naha: Okinawa-ken, 1995), 72.

[23] One wonders whether the GOJ actually has the funds to build a replacement heliport facility in the Henoko District of Nago should the local people agree to the idea.

[24] Okinawa no shinko kaihatsu keikaku kankei shiryo, 22.

[25] Okinawa keizai handobukku: 2000 nendo, 13.

[26] Kurima Yasuo, Okinawa keizai no genso to genjitsu (Tokyo: Nihon Keizai Hyoron Sha, 1998), 28.

[27] Okinawa no shinko kaihatsu keikaku kankei shiryo, 22.

[28] Ibid., 22.

[29] Kurima Yasuo, Okinawa keizai no genso to genjitsu, 44.

[30] Higa Teruyuki, 'The Cycle of Dependency: Okinawa’s Economy,’ loc. cit., 95-96.


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