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Mar. 10, 2015 - Updated 04:16 UTC

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New Road to Recovery

Sep. 7, 2016

A bankrupt city in Japan has been running on a shoestring budget for the past decade. Now Yubari has a new revitalization plan for getting back on track.

The northern Japanese city filed for bankruptcy in 2006. Under the terms of its bailout, the city was given 20 years to pay back the equivalent of around 300 million dollars in debt.

The financial burden has led to a lot of belt-tightening but now, midway through its repayment period, Yubari is focusing on forward-looking measures, including investing in the next generation.

Drastic measures are in place at City Hall -- the lights in the stairwells are switched off and the elevators are off-limits to employees -- to save money.

Before the bankruptcy, 260 public servants worked there. Today, there are only about 100 left, and that number continues to fall.

Yubari once prospered thanks to its coal industry. When the mines shut down in the 1980s, the city tried to fill the void with tourism but investments failed and bankruptcy followed. The population dropped from 13,000 to 9,000 as many people left to pursue their dreams elsewhere.

Crushed by its huge debt, Yubari's budget for administrative services is one of the lowest of any city in Japan.

"Nothing gets done at City Hall until someone steps in and makes it happen," says Manabu Sato, an official at Yubari City Hall.

An urban planner at City Hall, Sato is one of those who chose to stick it out through the hard times. In his spare time he coaches little league baseball. One day when his team was playing in another city, he found out that some of the kids didn't want to admit where they were from.

"I realized Yubari was viewed as a city that had done something wrong, and that negative image was affecting our children. That's when I decided to create something they could be proud of," Sato says.

Yubari’s population is aging as its young people move away. There's one elementary and one junior high school, and the lone high school is on the verge of shutting its doors.

The city decided to find out what its junior high graduating class was thinking by conducting a survey. It found that just one-third of students were planning to attend the local high school.

"I'd have no chance of getting into a good college if I went there," wrote one respondent.

"I'm worried about the future of Yubari and Yubari High School," wrote another.

The survey revealed that many students want to leave due to a general sense of hopelessness. Alarmed by the findings, Sato and his team set up meetings with the teachers.

"We want to foster a sense of pride in the students. We should cultivate citizens who plan for the future in our city," Sato says. "This is our challenge: We adults must show how much we care about our children and future generations. It's up to older generations and public servants to work hard and try different things."

Naomichi Suzuki has been Yubari's mayor since 2011. He was originally dispatched to the city by the Tokyo Metropolitan Government but he decided to stay on.

The central government decides Yubari's budget based on its financial recovery plan. The city must get approval for any changes it wants. The mayor realized that simply paying off its debts would not revive Yubari. That would only happen by nurturing future generations.

This past January, Suzuki made an important announcement to the city’s employees.

"I think we have to take a new approach this year and consider ways to change the financial recovery plan from the bottom up," he said.

Despite remaining debts totaling nearly 200 million dollars, he decided to ask the central government to let the city allocate money for recovery projects

"I understand that it’s difficult for a city with a small population to get approval at the national and prefectural levels to change its recovery plan. But realistically, if we want to win this battle and reach our goal, we must change the system and use every resource with our grasp," Suzuki says.

He put an outside expert in charge of a new third-party committee. Six months later, it concluded the plan should be fundamentally revised to achieve both fiscal reconstruction and regional revitalization. The panel also called on the central government to show its support.

In March, Suzuki submitted the report to the central government.

"The central government wishes to firmly support Yubari City," said Chief Cabinet Secretary Yoshihide Suga.

The mayor won approval for a radical overhaul.

"From now on, I would like to lay out a plan that will revive the local economy as well as rebuild our finances using sound political decisions," Suzuki said.

The city was able to earmark 24,000 dollars for Yubari High School to support its students' future.

A decade after filing for bankruptcy, Yubari is now slowly but steadily moving toward recovery.