JUANA SUMMERS, HOST:
Like all countries, Japan's tourism industry was badly affected by the coronavirus pandemic. But relief is in sight. The government is expected to lift the nation's tight border restrictions soon. The country's ancient former capital, Kyoto, is anticipating return of tourists on whom its economy relies. But, as Anthony Kuhn reports, that may not be enough to save the city from its financial difficulties.
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ANTHONY KUHN, BYLINE: Visitors strike a huge bowl-shaped bell, and the sound reverberates through the Kiyomizu temple. It's a sprawling complex of wooden halls established more than 1,200 years ago. Tourists are trickling back. So far, most of them are Japanese. Kyoto is Japan's eternal city, famous for its temples, shrines and royal palaces. Its riverbanks are dotted with willow trees and bridges, its human-scaled lanes filled with traditional wooden Machiya townhouses. On a shop-lined street approaching the Kiyomizu temple, business is picking up. Souvenir shop manager Sano Ko says it's been a tough two years. Tourists and customers vanished. His store had to shut down several times.
SANO KO: (Through interpreter) The Kyoto government has been doing a lousy job for a long time. They should go bankrupt and start from scratch.
KUHN: Ko is not joking about bankruptcy. Kyoto City finance bureau official Susumu Ogasawara admits that the city was in danger of going broke.
SUSUMU OGASAWARA: (Through interpreter) Kyoto was actually facing government intervention within 10 years if we had not come up with a reform plan.
KUHN: Some economic woes are specific to Kyoto. It's low-rise homes and tax-exempt temples produce little revenue. Others are shared by many Japanese cities. Their populations and infrastructure are aging. And with a national debt 2 1/2 times the size of the economy, Japan's central government has limited ability to help them. Kyoto's proposed solution, Ogasawara says, includes cutting city staff, raising public transportation prices and capping government spending. Ogasawara says tourists account for 55% of Kyoto's consumer spending, and the plan calls for attracting more of them.
OGASAWARA: (Through interpreter) Rather than decreasing the number of tourists, we want to spread them out over the hours of the day and the seasons of the year.
KUHN: He admits, though, that before the pandemic, some residents felt that their city had been overrun. Kyoto faces a dilemma - how to rescue its finances without wrecking its appeal and how to balance government spending on urban infrastructure versus welfare benefits. The debate in Kyoto over these priorities is heated.
HIDEAKI HIGUCHI: (Through interpreter) First of all, the city government saying Kyoto faces bankruptcy - that's a total lie.
KUHN: Hideaki Higuchi is a city assemblyman with the opposition Japanese Communist Party. He argues the city government is exaggerating its deficits in order to prepare taxpayers to pay more for spending on big-ticket items. These include building new bullet trains and expanding an unprofitable subway line.
HIGUCHI: (Through interpreter) The current budget shows they're cutting welfare benefits as much as possible, including support for daycare and seniors' transport passes in order to raise the budget for big public spending.
KUHN: Tokyo firms will do the construction for the big projects and reap the economic rewards, he says, not Kyoto. The cuts in services, coupled with unaffordable home prices, meanwhile, have triggered an exodus of Kyoto residents. Out of a population of nearly 1.5 million, nearly 12,000 residents left Kyoto last year - according to government figures, more than any other city in Japan. Among them is souvenir store manager Sano Ko. He left three years ago, but still works in the city.
KO: (Through interpreter) Kyoto's welfare system is just terrible. I just had a child, but daycare is inadequate and too expensive, so I just fled.
KUHN: Ko hopes the central government will give Kyoto more support. But in the long term, he says his former home is becoming increasingly inhospitable.
KO: (Through interpreter) That's why we call it a tourist city. It's not a place for people to live.
KUHN: Anthony Kuhn, NPR News, Kyoto.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.
