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Abe sells Japan's elderly on charms of country life to save economy

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(Bloomberg) — Mayor Yukio Takano has a problem. Since 1980, the number of children in his Tokyo ward has halved while the elderly population has doubled — and he’s running out of space to build more nursing homes in the Japanese capital’s most densely populated borough.

A possible solution: Relocate his older constituents to the countryside. It’s an audacious idea, and it’s none other than Prime Minister Shinzo Abe who is pushing it. His government sees an exodus of elderly to rural precincts as the best way of coping with Tokyo’s rapidly aging population and shrinking numbers elsewhere.

Then again, asking seniors to decamp to the countryside may also be unpopular. “For sure, people are going to say this is like throwing out your granny, or pushing out people out who don’t want to go, but that’s not the case,” says Takano who is surveying residents of his Toshima ward on such a plan before moving ahead. “Japan is doomed if people in Tokyo can’t co-exist, and we can’t get the countryside reinvigorated.”

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For many in Japan, the idea of moving seniors to the countryside rekindles the legend of “ubasuteyama,” meaning granny-dumping mountain. Legend has it that old people in ancient times were carried off to the hills and left to die. There’s even a mountain named after the folk story in Nagano, central Japan.

Demographic destiny

Abe put tackling Japan’s declining population at the top of his agenda in September in a revamp of his economic policies known as Abenomics. The government is trying to reverse two unwelcome trends. A surge in Tokyo’s elderly population over the next 10 years may overwhelm urban healthcare systems; while depopulation and stagnant economies in rural Japan are set to leave nursing homes and hospitals half-empty.

Eighty minutes by express train from Takano’s ward is the mountain town of Chichibu where the population has been decreasing since 1975. While the town’s center is lined with shuttered businesses and abandoned buildings, it does have plenty of empty nursing-home beds and underused medical facilities.

Shigeru Ishiba, Abe’s man in charge of stemming population decline, is fond of painting an even grimmer picture. Japan’s population will fall to 1,000 by the year 3,000 at the current rate, Ishiba told a Bloomberg gathering of investors in Tokyo in July. While that’s an exaggeration of sorts based on an unlikely extrapolation of current trends, the depopulation wave is still alarming.

Japan’s population is set to drop by more than 700,000 a year on average between 2020 and 2030, when a almost third of the population will be 65 or older, according to the National Institute of Population and Social Security Research. At the same time, the government’s ability to extend financial incentives to spur population growth is limited, according to Ishiba, with central government debt at more than double that of gross domestic product.

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The problems faced by Tokyo are particularly acute, with residents aged 75 or older set to climb 44 percent to 5.72 million by 2025, according to a report in June by the Japan Policy Council. As well as urging the government to pursue a policy of helping seniors move out of Tokyo, it said Japan needs to actively take in foreign care workers.

“What we’re asking active seniors is whether they would like to work in a new location, to continue to study or just do something new in a new location,” said Akiko Ito, a deputy general-director in Abe’s government charged with overcoming population decline issues. “The intention is in no way to order people to relocate.”

Ito says that her department must also help people sell or rent their previous homes. Abe’s government plans to allocate additional funds from April for local authorities to prepare plans for taking in older residents.

For Ito, Takano and officials in Chichibu, the ideal candidates for relocation are older citizens who are still healthy and, in some cases, interested in continuing to work. Abe told reporters in the U.S. in September that before Japan starts accepting immigrants to address its population dilemma, it should first improve the fertility rate and help the elderly and women stay in the workforce.

Money crunch

Japanese authorities have studied the popularity of retirement communities — facilities with combination of independent living and nursing care — as a possible model. About 600,000 people in the U.S. live in some 2,000 such communities, according to a report by the Mitsubishi Research Institute earlier this year. The University of Florida and the University of Notre Dame have affiliated communities used by seniors.

In April, Abe visited a town for elderly residents in western Japan that may serve as a model for future projects. The Share Kanazawa project is built on a large plot of land with 32 houses for elderly residents alongside dwellings for university students and mentally challenged children. The premier said he’d like to see similar projects nationwide.

While public funding is scarce, other financing vehicles might be employed. Mitsubishi Research Institute and the Japan-America Real Estate Coalition Office said in a report in January that health care real estate investment trusts or even foreign direct investment may be able to provide financing.

Shortage v. surplus

While a deficit of nursing care beds in the capital is currently being offset by a surplus in neighboring regions, by 2025 greater Tokyo will have a shortage of 131,000 beds, the government says. By contrast, 41 cities, many in the very north or south-west where depopulation is most advanced, already have a surplus in hospital and nursing facilities.

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Some 41 percent of Tokyo residents are planning or considering a move to the countryside, according to a government survey last year. Tokyo saw an influx of more than 5 million people from the regions during Japan’s era of high-speed growth from 1955 to 1970, and for many of them it may be a matter of returning to places where they have roots, Ito said.

For some residents of Mayor Takano’s Toshima ward, the idea of moving out is an anathema. One 71-year old woman, who asked not to be named for privacy reasons, said she’d seen reports of the relocation plan and was steadfastly against it. It had the hallmarks of dumping some old unwanted granny, said the woman who runs a noodle shop with her husband.

“This is like laying people off in the countryside — work in the big city when you are young, and then get out when you become weak,” said Yoshihiro Katayama, a former government minister and two-term local governor. Katayama said the government should focus on measures to halt the exodus of young people into Tokyo, rather than looking for “granny dumping” locations.

Others may have no choice but to move. Many elderly Tokyo citizens will have to leave their homes at some point as they become incapable of caring for themselves, according to Koichi Murakami, an 80-year-old baker. “I am looking for care facilities around Tokyo for elderly neighbors living alone to move to when families can’t take care of them,” said Murakami, who lives with his wife, said at his bakery in the Tokyo town of Kachidoki.

Economic benefits

Eleven percent of Japan’s 1,788 local governments have said they’re interested in taking part in programs that will support the relocation of urban dwellers to the countryside, according to a government survey.

Mitsubishi Research Institute’s senior researcher Atsushi Hasegawa estimates that for every 100 people aged 65 to 80 that move to the countryside with a monthly spend of 200,000 yen there would be a resulting economic benefit of 14 billion yen (about $115 million) and 1,000 jobs created over 40 years.

Takano’s ward government began sounding out residents last month about their interest in moving. He’s already talking with the train operator that runs the line to Chichibu, and about fare discounts to allow families to come and go to the new community. “There are old people living alone in apartments with only the television to talk to — that’s a miserable life,” he said.

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