State Subsidy System for Remote Island Liner Services in Japan
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State Subsidy System for Remote Island Liner Services in Japan By ALFRED J BAIRD TRI Maritime Transport Group, Napier University Business School, Sighthill Court, Edinburgh EH11 4BN, Scotland, UK
Japan has one of the world's largest networks of remote island liner services. As with other remote island lifeline services, operators face similar problems such as traffic imbalances, seasonality, and inadequate fare levels. Many of these liner operations, and hence the communities they serve, depend on state subsidy for survival. This paper explains the subsidy system for remote island liner services in Japan. It provides analysis of some of the industry's difficulties, in the face of diminishing traffic flows, and national budget constraints. Several proposals are offered in an effort to help modernise what is a particularly fragmented shipping system, and to aid decision makers in their quest to ensure long-term stability of the industry.
Keywords: Japan; remote island; liner service; subsidy; ferries; licencing; competition.
I.
INTRODUCTION
Japan has one of the most extensive remote island ferry liner systems in the world, with services linking several hundred populated islands to the mainland. This paper gives an overview of remote island ferry services in Japan and describes the existing liner services subsidy scheme. The paper explains the background to the subsidy system and relevant laws. The paper then analyses the structure of the remote island liner industry, and identifies some of the key problems faced by operators. Likely changes to the liner shipping subsidy regime are considered, and recommendations are made as to how services might be improved in future, with particular emphasis on the need to modernise, liberalise and restructure the industry. Data collection was facilitated through interviews with ferry lines and ports in Japan, and with statutory organisations responsible for remote islands.
AJ Baird Japan Remote Island Liner Services
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II.
RE M O T E I SLA N D S
Japanese islands The four main islands of Japan ± Honshu, Kyushu, Shikoku, and Hokkaido ± are collectively known as the mainland. All other islands are known as isolated or remote islands. Excluding the mainland, there are 6,848 islands in Japan. Of these, 433 are inhabited, and 6,415 are uninhabited. Island population The remote island population totalled 814,496 in 1995, equivalent to less than 1% of Japan's population of 126 million. There has been almost a halving of remote island population since 1955 when there were 1.44 million island residents. This is in marked contrast to mainland Japan which has seen population increase from 90 million in 1955 to just under 126 million in 1995, a rise of over one third. The remote island birth rate has fallen by almost half in recent years, from 12,475 births in 1982 to 7,603 in 1994. The islands now have an ageing population and suffer from continued out-migration as younger people move to mainland cities to take advantage of better paid employment and more work opportunities. Popula
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