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Japan’s post-tsunami spending adrift

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SENDAI, Japan — About a quarter of the $148 billion budget for reconstruction after Japan's March 2011 tsunami and nuclear disaster has been spent on unrelated projects, including subsidies for a contact-lens factory and whaling research.

The findings of a government audit buttress complaints about shortcomings and delays in reconstruction.

More than half the budget has not been disbursed, stalled by indecision and bureaucracy, while nearly all of the 340,000 people evacuated from the disaster zone remain uncertain whether, when and how they will ever resettle.

Many of the projects not related to reconstruction were loaded into the $148 billion budget on the pretext that they might contribute to Japan's economic revival. The government now acknowledges that the strategy was a mistake.

"It is true that the government has not done enough and has not done it adequately. We must listen to those who say the reconstruction should be the first priority," Prime Minister Yoshihiko Noda said Monday in a speech to parliament.

He vowed that unrelated projects will be "strictly wrung out" of the budget.

But ensuring that funds go to their intended purpose might require an explicit change in the reconstruction-spending law, which authorizes spending on such ambiguous purposes as creating eco-towns and supporting "employment measures."

According to a government audit released last week, the unrelated projects benefiting from the reconstruction budgets include:

• Road building in distant Okinawa.

• Prison vocational training in other parts of Japan.

• Subsidies for a contact lens factory in central Japan.

• Renovations of government offices in Tokyo.

• Aircraft and fighter pilot training.

• Research and production of rare-earth minerals.

• A semiconductor research project.

• Funding to support whaling, ostensibly for research.

'Trickle down' effect

About $380,000 went to promoting the Tokyo Sky Tree, a transmission tower that is the world's tallest free-standing broadcast structure.

An additional $35 million was requested by the Justice Ministry for a publicity campaign to "reassure the public" about the risks of big disasters, the audit said.

Masahiro Matsumura, a politics professor at St. Andrew's University in Osaka, said justifying such misuse by suggesting the benefits would "trickle down" to the disaster zone is typical of the political dysfunction that has hindered Japan's efforts to break out of two decades of debilitating economic slump.

"This is a manifestation of government indifference to rehabilitation. They are very good at making excuses," Mr. Matsumura told The Associated Press.

Near the crippled Fukushima Daiichi nuclear plant, which sustained the additional blow from the worst nuclear accident since the 1986 Chernobyl disaster, recovery work has barely begun.

More than 325,000 of the 340,000 people evacuated from the disaster zone or forced to flee the areas around the nuclear plant after the March 11, 2011, disaster remain homeless or away from their homes, according to the most recent figures available.

In Rikuzentakata, a fishing enclave where 1,800 people were killed or disappeared as the tsunami scoured the harbor, rebuilding has yet to begin in earnest, said Takashi Kubota, who left a government job in Tokyo in May 2011 to become the town's deputy mayor.

The tsunami destroyed 3,800 of Rikuzentakata's 9,000 homes. The first priority, he said, has been finding land for rebuilding homes -- on higher ground.

Most evacuees are housed, generally unhappily, in temporary shelters in school playgrounds and sports fields.

"I can sum it up in two words -- speed and flexibility -- that are lacking," Mr. Kubota said. Showing a photo of the downtown area that no longer exists, he said, "In 19 months, there have basically been no major changes. There is not one single new building yet."

Rebuilding challenges

The government has pledged to spend $295 billion this decade on reconstruction and disaster prevention, $245 billion of it within five years.

But more than half of the reconstruction budget remains unspent, according to the government's audit report.

The dithering is preventing the government, whose debt already is twice the size of the country's gross domestic product, from getting the most bang for every buck.

"You've got economic malaise and political as well. That's just a recipe for disaster," said Matthew Circosta, an economist with Moody's Analytics in Sydney, Australia.

Part of the problem is the central government's strategy of managing the reconstruction from Tokyo instead of delegating it to provincial governments.

At the same time, the local governments lack the staff and expertise for such major rebuilding.

The government "thinks it has to be in the driver's seat," Jun Iio, a government adviser and professor at Tokyo University, told a conference in Sendai. "Unfortunately, the reconstruction process is long, and only if the local residents can agree on a plan will they move ahead on reconstruction."

"It is in this stage that creativity is needed for rebuilding," he said.

Even Sendai, a regional capital of more than 1 million people much better equipped than most coastal communities to deal with the disaster, still has mountains of rubble. Much of it is piled amid the bare foundations, barren fields and broken buildings of its oceanside suburb of Arahama.

Sendai quickly restored disrupted power, gas and water supplies and its tsunami-swamped airport. The area's crumbled expressways and heavily damaged railway lines were repaired within weeks.

Farther north and south, ravaged coastal towns remain largely unoccupied.

More than 240 ports remain unbuilt. In many cases, their harbors are treacherous with tsunami debris.

Like many working on the disaster, Yoshiaki Kawata of Kansai University worries that the slow progress on reconstruction will leave the region, traditionally one of Japan's poorest, without a viable economy.

"There is almost no one on the streets," he said in the tiny fishing hamlet of Ryoishi, where the sea rose 56 feet. "Building a new town will take many years."

Even communities remain divided over how to rebuild. Moving residential areas to higher ground involves cumbersome bureaucratic procedures and complicated ownership issues.

Each day of delay, meanwhile, raises the likelihood that residents will leave and that local businesses will fail to recover, said Itsunori Onodera, a lawmaker from the port town of Kesennuma, which lost more than 1,400 people in the disaster.

"Speed," he said, is the thing most needed to get the region back on its feet.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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