Okinawa Journeying Towards A Self Reliant Economy Economics Essay

This popular Chinese adage captures the really kernel of economic autonomy. Every economic unit would desire to accomplish a certain grade of autonomy in its economic activities. Okinawa is non an exclusion in that sense. This was made evident in the JICA Seminar on Regional Development in Okinawa last August 2006. It was clear in the said seminar that the Prefectural Government of Okinawa wants to hold a greater autonomy in its economic enterprise.

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It is in this line that this paper is written to supply a discourse on the attempts of Okinawa in its pursuit for a autonomous economic system. Specifically, this paper would desire to accomplish the undermentioned research aims:

To follow the economic history of Okinawa ;

To discourse and analyze the economic development programs of Okinawa ;

To discourse the potential/s of Okinawa in position of its development program ; and

To discourse the issues and challenges being faced by Okinawa in its attempt to accomplish a autonomous economic system.

This is a qualitative research paper that employs reappraisal of related literature and secondary in its treatment of the above-named topic. An empirical survey utilizing quantitative tools is recommended for farther research on the same subject that would measure the success of the Okinawa prefectural authorities in this affair.

Theoretical Background

The choice of Dr. Muhammad Yunus as 2006 Nobel Peace Prize victor underscored the importance of autonomous development. Through his Grameen Bank, he was able to back up 1000000s of underprivileged adult females in Bangladesh by turn outing micro finance. As a consequence, these adult females who can non avail capital loans in the regular bank are now capable of supplying support for themselves.

The experience of Grameen Bank showed that it is a natural desire of all economic units ( possibly persons, households, communities, provinces, parts, or states ) to minimise its dependance on resources of other economic units. Dr. Emmanuel O. Ojameruaye in his paper “ Schemes for Autonomous Economic Development of Urhoboland ( 2004 ) ” explained that “ a rational economic unit would endeavor to depend on its ain ( internal resources ) for nutriment and growing and avoid inordinate trust on external resources. This nevertheless does non prevent the usage or support of external resources. ”

He so defined autonomous economic system as “ a type of development that relies on the human and material resources of the economic unit whose development is the topic of treatment. In other words, it is development that relies on “ internal ” resources as opposed to development that relies to a great extent on “ external ” resources. External support is allowed but it is propelled and sustained by internal resources. ” As the economic units prosecute policies of autonomy and strive to guarantee liberty, they still allow for significant external support. ( Ojameruaye: 2004 ) .

Paul Godfrey ( 2003 ) of Brigham Young University defined autonomy development as the ability of an entity to prolong economic wellbeing. He said that autonomy is the intermediate terminal in chase of the vision of good in life. With a autonomous economic system, the entity can “ earn excess resources that create good being and construction economic life to be comparatively invulnerable to economic daze ( Godfrey: 2003 ) .

Overview of Okinawa

Situated between Kyushu and Taiwan, Okinawa is Japan ‘s southernmost prefecture and consists of 100s of the RyA«kyA« Islands in a concatenation over 1,000 kilometers long. It serves as anchor that links mainland Japan to the north, South-east Asia to the South, the Pacific Ocean to the E, and the East China Sea to the West. This of import location makes Okinawa the southern Nipponese hub for international traffic, trade and cultural exchange.

Map of Okinawa

Beginning: ( )

Okinawa Prefecture was non originally portion of Japan but portion of independent state called the RyA«kyA« Kingdom. Currently they include the chief island of Okinawa and the Yaeyama and Miyako island groups. Okinawa ‘s location in the East China Sea, and comparatively close propinquity to Japan, Korea, China and South East Asia allowed the RyA«kyA« Kingdom to go a comfortable trading state ( ) .

The many palace ruins that dot the island day of the month from this period. The RyA«kyA« Kingdom long had a tributary relationship with China. In 1609 the Satsuma kin, who controlled the part that is now Kagoshima Prefecture in Japan invaded the RyA«kyA« Kingdom. Following this invasion, the RyA«kyA« Kingdom was forced to come in into a tributary relationship with Satsuma in add-on to their old tributary relationship with China. RyA«kyA«an sovereignty, nevertheless, was maintained, since to make otherwise would hold created jobs with both China and the Tokugawa Shogunate, which Satsuma had opposed during the preceding period of struggle. This gave Satsuma a high degree of entree to merchandise with China during a period in which such trade was to a great extent restricted and mostly cloak-and-dagger. Though Satsuma maintained strong influence over the RyA«kyA« Kingdom, the RyA«kyA« Kingdom maintained a big grade of political independency. In 1879, following the Meiji Restoration, the RyA«kyA« Kingdom was forcibly incorporated into Japan as a settlement known as Okinawa Prefecture ( ) .

Following the terminal of World War II and the Battle of Okinawa in 1945, for 27 old ages Okinawa was under United States disposal. During this clip the US military established legion bases on Okinawa Honto and elsewhere. On May 15, 1972, Okinawa one time once more became portion of Japan, although to this twenty-four hours the United States maintains a big military presence there ( ) .

Economic Overview of Okinawa Prefecture

Comparing Tables 1 and 2 would demo that the rate of population growing in Okinawa is comparatively high compared with Japan as a whole. It is estimated that the mean one-year growing rate of Okinawa over the period 2004 to 2015 will be at 0.47 per centum, compared to minus 0.08 per centum for Japan as a whole. Besides, whereas the population of Japan is forecasted to top out in 2006, that of Okinawa is expected to go on turning until financial 2006 ( OKIDEN: 2004 ) .

Figure 1

Beginning: Japan Electric Power Survey

The figure of families in Okinawa is besides increasing quickly than in Japan as a whole with the one-year mean growing rate from 2004 to 2015 of one per centum compared to the national norm of 0.32 per centum.

Figure 2

Beginning: Japan Electric Power Survey

In footings of end product, the gross domestic merchandise ( GDP ) of Okinawa is forecasted to turn at a faster gait than the GDP of the whole of Japan. The mean one-year GDP growing for Japan from 2003 to 2012 is projected at 1.6 per centum compared with 2.6 per centum of Okinawa. On per capita footing over the same period is besides forecasted to transcend national norm at about 3.4 per centum with around 2 per centum for the whole of Japan ( OKIDEN: 2004 ) .

Table 1

Beginning: OKIDEN

Table 2

Beginning: OKIDEN

However, socio-economic conditions in Okinawa remain hard. Although the per capita income is expected to turn at a faster rate than the national degree, it is merely 80 per centum of the national norm. Besides, the unemployment rate continues to be high at 7.9 per centum, one of the highest in the whole of Japan.

The economic system of Okinawa is mostly dependent of the third industry which accounts for 86.1 per centum of the gross prefectural merchandise while secondary and primary industries account for 15.8 per centum and 1.9 per centum, severally. A big portion of the third industry is concentrated in the service industry which accounts for 27.6 per centum which includes the touristry industry.

Economic Structure of Okinawa

Figure 3

Beginning: OKIDEN

Because of the big dependance of the economic system in the third sector, most of the workers in Okinawa are besides portion of this sector with 74.4 per centum of the labour portion followed by 19.2 per centum in the secondary industry and 6.2 per centum in the primary industry. The services industry histories for 33.4 per centum in the third industry. This big portion of the services industry can be attributed to the turning tendencies in the touristry sector which is projected to increase to 6.5 million tourer reaching in 2012 as shown in the figure below.

Figure 4

Beginning: Okinawa Development and Promotion Plan

Economic History of Okinawa: Towards a Autonomous Economy

Before the reversion of Okinawa to Japan sovereignty, the economic system was dependent on the economic activities in the US military bases and installations ; normally referred to as basal economic system.

In May 15, 1972, the Japan and US authoritiess agreed for a reversion of Okinawa and the decrease of US military bases in the country. It was clear during that clip that what Okinawa needed was to travel off from basal economic system and this is can merely be done with addition in economic growing ( Takahama ) .

To turn to this demand, the authorities has formulated and three Okinawa Promotion and Development Plans or “ Okinawa Fukko Kaihatsu Keikaku ” from 1972 to 2002 in an attempt to shut the spread between the islands and the remainder of Japan, particularly in the country of societal substructure ( CAO: 2006. )

Figure 5

Beginning: Cabinet Office

The first Okinawa Fukko Kaihatsu Keikaku was planned and done from 1972 to 1981 and the 2nd plane was from 1982 to 1991. The end for the first and 2nd programs was the alteration of the differences from the mainland and the accommodation for independent development. The 3rd development program was implemented from 1992 to 2001. In add-on the end of the first two programs, the 3rd program was aimed to lend to the economic and cultural growing of Japan ( Takahama ) .

In April 2002, the Act on Particular Measures for the Promotion and Development of Okinawa was passed with the end of furthering the outgrowth of a dynamic, autonomous Okinawan economic system led by the private sector. As a consequence, the Okinawa Promotion and Development Plan was adopted in July 2002 to function as the route map for Okinawa ‘s development over 10 old ages until 2011 ( CAO: 2006 ) .

Under the current program, the end of accomplishing a autonomous economic system can be achieved by exciting the undermentioned sectors:

Tourism and Resorts

Attracting Conventions

Development of Information Technology

Establishing of New Industries

Export Oriented Processing Industries

Trade and Commerce

Fabrication and Traditional Crafts

Agribusiness, Animal Husbandry, Forestry and Fisheries

This attempt will be combined with developing the human resources and, scientific discipline and engineering to back up these sectors ( CAO: 2006 ) .

Furthermore, regenerating the outlying islands through ( 1 ) developing substructure such as seaports, airdromes and Bridgess to insulate islands ; ( 2 ) seting in topographic point production substructure ; ( 3 ) guaranting equal wellness attention and heightening public assistance ; ( 4 ) bettering instruction, and ( 5 ) developing basic life environment will lend to the attainment of such end ( CAO: 2006 ) .

CASE ANALYSIS: Issues and Challenges

Aiming for a autonomous economic system is a good end for Okinawa Prefecture. The old development programs had been implemented to do Okinawa at par with other prefectures in footings of economic growing. Although these programs had been successful in guaranting growing in Okinawa, still, it lags behind the other prefectures.

Furthermore, holding a autonomous economic system is one manner to get by up with the recent decentalisation program by the cardinal authorities. With this program, the subsidy by the cardinal authorities to the local authorities units will be well reduced. At present, Okinawa is one of the prefectures which mostly depend on the local allotment revenue enhancements. In 2002, Okinawa has basic fiscal demand of Y274 billion but its gross is merely Y68 billion, therefore a shortage of Y206 billion. This was augmented by Y210 billion worth of local allotment revenue enhancements from the cardinal authorities. The program to do Okinawa a autonomous economic system will let the Prefectural Government of Okinawa to digest the lessening of local revenue enhancement allotment by promoting the private sector to take in the development attempts of Okinawa.

However, there are major issues which the Okinawa Prefectural Government must decide in order for autonomous economic system to take topographic point. One major issue that challenges the attempt of Okinawa for autonomous economic system is the presence of the US military bases and installations.

Figure 6

Beginning: Cabinet Office

Despite of its little size in footings of land country, Okinawa is home to 39 US Military bases and installations. Figure 6 shows that about 75 per centum of US Military bases and installations in Japan are located in Okinawa. These 39 US military bases and installations are busying 18.8 per centum of the 1,204.41m2 of Okinawa Island. Some of these installations are even located in the Centre of the concern and residential countries such as the instance of Futenma Air Base.

There are attempts by both Japan and US authoritiess to cut down, realign and consolidate these military installations. However, the gait of decrease in Okinawa has been slower than in the mainland.

The presence of these bases pose a hinderance to the attempt of Okinawa to achieve a autonomous economic system. With the big presence of these military installations in the country, it limits the development of Okinawa. As a consequence, there is no room for farther development enlargement in footings of physical plus such as land. A instance in point is the Funtenma Air Base which is located at the Centre of the metropolis. This limits the enlargement of the concern activities and makes Okinawa one of the dumbly populated in Japan. Besides, since most of these installations are out-of-bounds to the populace, it makes the development of public substructure hard.

Second, the limited infinite available in Okinawa makes the cost of making concern expensive. A good illustration of this is the high cost of airfare traveling to Okinawa. This partially because most of the air infinite and sea infinite in Okinawa are being used for military intent. Hence, the Prefectural Government has no pick but to supply revenue enhancement inducements through the creative activity of export treating zones to pull extra investings. This is importance because the cardinal towards the accomplishment of a autonomous economic system is the private sector based on the current Okinawa Development and Promotion Plan.

Pollution is another job as a consequence of the military bases in the country. Both noise and waste pollution are going a unsafe menace to the Okinawan economic system since the economic system is to a great extent dependent on the touristry sector.

Last, the colza incident in September 1995 affecting a immature Okinawan miss clearly showed the negative societal effects and the menaces to the society by the presence of these military installations.

Not merely the presence of US Military bases and installations poses challenge to the development of Okinawa but besides its continued dependance on national subsidy. As before stated, Okinawa depends on the subsidy from the cardinal authorities to augment its deficit in grosss. Since the reversion of Okinawa to Japan, the cardinal authorities has been pouring in millions of hankering as subsidy. This is serves as payment from the cardinal authorities to Okinawa for hosting the US military installations.

This immense sum of subsidy from the cardinal authorities makes the Okinawan economic system dependant on public plants passing. Thus, “ the economic system has little fabrication sector and overly big touristry industry, giving Okinawa the state ‘s lowest per capita income and really high unemployment ” ( Ushikoshi ) .

The economic construction of Okinawa should be changed for it to hold a self-reliance economic system. Equally long as US military installations and bases are significantly reduced, Okinawa has no other pick but to trust to a great extent on subsidies since economic enlargement is no longer executable.

Therefore, the declaration of these issues is necessary for Okinawa Prefecture accomplish autonomous economic system.


The transmutation of one economic system into a autonomous economic system is an ultimate end which is worthy of the attempt. Self-reliance economic system provides a sense of liberty by non trusting on others ‘ resources for development to take topographic point. However, in some instances, the accomplishment of a autonomous economic system would necessitate external support to prolong internal resources.

This is the instance of Okinawa in which it aims to accomplish a autonomous economic system as stipulated in its recent Okinawa Economic Development and Promotion Plan. This program outlines the schemes that it would take to accomplish this end. The private sectors is given the major undertaking to take in constructing a autonomous Okinawan economic system.

However, there are issues and challenges which the Okinawa Prefectural Government has to decide foremost before it can prosecute this end. First of this is the presence of the US military bases and installations which limits the economic enlargement of Okinawa. As a consequence, Okinawa has become a basal economic system in which the service sector constitutes the majority of the economic system. As a consequence, Okinawa has a high incidence of unemployment and the lowest per capita income in Japan.

On the other manus, the really same scenario makes Okinawa to a great extent dependent on subsidy from the cardinal authorities. Because of the limited economic enlargement due to the presence of the US military bases, the cardinal authorities has continuously poured millions of hankering in the Okinawan economic system, largely in footings of public work disbursement.

With this is head, the attainment of autonomous economic system in Okinawa would go on to necessitate external support specifically from the cardinal authorities. But this is non plenty. The cardinal authorities should do certain that it is sincere in its policy of consolidation, decrease and realignment of the US military bases and installations. Merely with these policies would the end of autonomy in Okinawa be realized.


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