Towards the end of the First Shinko Kaihatsu Keikaku period (1972-82) it was already clear that its socio-economic targets would not be reached. On 30^th November 1979, Governor Nishime convened an all-member meeting of the Okinawa-ken Shinko Kaihatsu Shingikai to appraise the first plan.[1] The resulting chukan hokoku, or mid-term report, focused in on success and failure in the promotion of secondary industry, the structure of industry and employment, and at whether there had been a balancing between the tertiary sector and other industrial sectors. The report argued there were significant problems with Okinawa’s industrial structure. The secondary sector had to be aggressively promoted to keep pace with the “extravagant growth (hidaika)” of the tertiary sector in as much as income-derived and in terms of absorbing labour.[2] There was little visible evidence of any growth in manufacturing. In actuality, and as Fig. 14 [Total Income by Industrial Sector, 1975-95] shows, as a percentage of total income-derived manufacturing dropped from 8.3% to 6.9% between 1975 and 1980. The national Japanese average was close to 20%. It was recognised that industrial estates with adequate water supplies needed to be located and enterprises encouraged. Nishime requested funding from the GOJ in the FY 1980 budget to investigate industrial estate development at Itoman and Nakagusuku, and to study relocating and enlarging Ishigaki Airport. These elements were incorporated in the Dainiji Okinawa Shinko Kaihatsu Keikaku (Second Promotion and Development Plan), enacted on 5^th August 1982.[3]

Perhaps because the first plan had been so optimistic in its goals the second made a point of outlining various constraints and hindrances to development. These stretched back to the ravages of W.W.II and to the lengthy period of separation that necessitated the programme of kakusazesei,[4] and constrained progress toward jiritsu. In the first part, local industries had failed to absorb an ever increasing  labour force, amongst which were large numbers of young people and former-US base workers. Low production capacity and poor industrial linkages made it difficult to develop the economy and address high unemployment. Second, Okinawa’s development had been underway for a short period. Okinawa still lacked experience, possessed insufficient capital, had inadequate water resources, transport and communications infrastructure was weak, and a lower standard of living across the board. Thirdly, to advance socio-economic development Okinawa needed to focus on human resources to bring out new talent. Fourth, the extent of US military bases restricts the amount of land available. In addition, rural areas and remote islands are experiencing depopulation as young people venture to cities in Okinawa or the mainland in search of work. It is important to bring development to these areas, be it tourism, agriculture, or industry.[5] Fifth, Okinawa has not used its natural, subtropical, and geographical advantages to bring about socio-economic development, despite its position between Japan, China, and Southeast Asia with which it has a long history of contact.[6] To address this, Governor Nishime was enthusiastically behind a policy to develop Okinawa into a kokusai koryu kyoten, or ‘point of convergence for international exchange,’[7] to foster cooperation with other countries, and increase trade and tourism. The Kokudocho incorporated this kokusai koryu role more fully into its Fourth National Development plan in 1987.[8] A very surprising omission from the analysis of negatives was a dramatic drop in Okinawa’s self-financing ability over the past decade. In 1969, under the US occupation the GRI could provide 57% of the revenue required for its expenditures whereas in 1978, after years of increasing GOJ transfers, the OPG could provide only 16.7%.[9] Although Okinawa’s self-financing power did subsequently increase it remains well below the national average. At the same time as the second plan emerged Okinawa was marking its first full decade back to Japan. There were many books and articles focusing on the theme of economic (jiritsu) self-reliance, and lack of progress.[10]

In terms of specific aims, the plan predicted the population would grow from 1.1-million to 1.2-million by 1991.[11] Interestingly, given the analyses of the first plan, the OPG seems to have resigned itself to the fact that the structure of industry and relative weight of the secondary and tertiary sectors will not undergo much change in the next decade. Although GPP is expected to increase from 1.28-trillion yen in 1980 to 2.4-trillion yen by 1991, total income by industry is expected to show only a 1% increase in the secondary sector (from 22% to 23% of the work force by 1991), and a 2% increase in secondary sector as a percentage of GPP (from 22% to 24%). The plan anticipates a decade of infrastructure modernisation and a reorganisation of management as pivotal to expanded manufacturing. The development of industrial estates at Itoman and Nakagusuku will be integrated with industrial zones in south and central Okinawa Island.[12] The overall ideological goal of the second plan was similar to the first, and read as follows:

"This plan aims at narrowing gaps in all areas between the Okinawa and mainland Japan, utilising Okinawa’s unique characteristics, preparing the foundations for self-reliant development, focusing on a new kind of lifestyle, and realising a peaceful, bright, and active Okinawa Prefecture"[13]

A lack of faith in the secondary sector prompted an ideological reversal on the role of the tertiary sector. If it could not be hemmed in relative to manufacturing it should be developed for itself and the multiplier effect in absorbing labour, boosting construction, and stimulating retailing.[14] Subtropical Okinawa was endowed with all the prerequisites for a successful tourist industry: sun, seas, coral, beautiful scenery, etc. The growth of tourism in less than two decades was phenomenal. In 1966, some 103,000-visitors came to Okinawa, bringing in $18.5-million, but by 1971 this shot up to 358,000-visitors bringing in $42.1-million.[15] More dramatic is in the post-reversion era with the expansion of air routes to and from Japan and more emphasis on planned tourist development. In 1985, over 2-million visitors arrived, injecting a tidy 227-billion yen into the economy and constituting almost 15% of Okinawa’s total external revenue receipts.[16] Not every yen arriving in Okinawa, of course, stays. As was discussed earlier, much of the profit from tourism in Okinawa ends up on the mainland. In the first part, most big hotels are owned by mainland companies. Second, with the exception of a ‘slow boat’ ferry service between Naha and the mainland, and the smaller shuttle (flights and ferries) services within and between the remote islands of Miyako, Daito, and Yaeyama, control of the transportation network to and from Okinawa is in the hands of Japanese airline corporations like All Nippon Airways (ANA) and Japan Airlines (JAL).[17] Local Okinawan staff are employed in the hotels, but service sector work does not require much training and, therefore, does not offer good wages and benefit packages. Staff are typically hired on short-term or part-time contracts to keep employer overheads low.

A cause for some celebration in Okinawa was the fact that from 1977, external revenue receipts from tourism at 106-billion yen (10.6%), overtook those of US bases at 101-billion (10.1%).[18] This represented a halving from 1972 (19.5%). In terms of the economy shifting from a structural dependency on military bases as was the case in the 1950’s and 1960’s, this was a marvellous development. A gradual disintegration of the ideological Cold War system and reductions in US defence budgets would point to a continued downward trend in the value of bases were it not for GOJ acceptance of greater financial obligations. With the advent of a new period in Japan-US defence cooperation in 1978, and the omoiyari yosan (compassion budget) by which the GOJ now pays the wages of civilian base workers, their health insurance, and several other categories.[19] When one considers that the GOJ has paid an increased amount in land rentals since 1972, and that through a variety of complex payments to base-heavy shi-cho-son pays for damage to property and trees, noise prevention, and such, one might be less speedy in saying that Okinawa is freeing itself from the bases. In the broadest of senses, Okinawa-ken relies less on bases economically than in previous years, but at a municipal level, in Kin, Kadena, Ginoza, Yomitan, Onna, Yomitan, and Chatan (to a lesser extent in Kitanakagusuku, Tonaki, Okinawa, Nago, Ginowan and Gushikawa), the degree of attachment has not dramatically changed.[20] One needs to also consider the issue of economic contribution versus control of resources. In 1998, military bases employed 8,443 local workers and contributed 187-billion yen to the economy.[21] Not a figure to scoffed at, yet in contributing 7% of external revenue receipts bases occupy 20% of Okinawa Island’s land area. In the first part, bases do not contribute relative to resources commanded. Second, the extent of US military base land hinders other avenues of development. A February 1995 US DoD report titled US Security Strategy for the East Asia-Pacific Region candidly admits that it “it is cheaper to station forces in Japan and Okinawa than it is to maintain them in the United States.”[22] Political scientist Miyasato Seigen argues that Okinawa’s location is less important to the DoD these days than the GOJ’s willingness to foot the bills.[23]