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  1. SMALL AND MEDIUM-SIZED BUSINESSES AND MAJOR ENTERPRISES
  1. SPECIAL PROCUREMENTS ENJOYED ONLY BY MAJOR ENTERPRISES

Construction-Oriented Reconstruction Policy

The idea held by the administrative bodies for reconstruction planning was that when the infrastructure is improved and major enterprises recover, the life-reconstruction of the earthquake-stricken people will also be materialized, and that the minimum social welfare will be sufficient for those who are unable to recover by themselves. An estimated amount of 12 trillion yen was injected as reconstruction funding. Most of the special procurement demands in relation to the reconstruction projects, however, was mainly siphoned by big companies in and around the disaster-hit areas, leaving little for the local small and medium-sized enterprises to benefit.

None of the central, prefectural nor city governments conducted thorough research on the actual damage and tried to carry out the projects in one burst such as the construction of the Kobe airport, the redevelopment in the Shin-Nagata station area and the redevelopment of the new urban center in the eastern area (HAT Kobe), which had already been planned before the earthquake happened.

Major Enterprises -- Kobe Steel, Ltd., etc.

Kobe Steel, Ltd., who suffered immense damage of 102 billion yen by the earthquake, achieved recovery by July, 1995. In the business year of 1994, in which sales received the biggest impact of the disaster, sales of Kawasaki Steel Corporation and Sumitomo Metal Industries, Ltd. also dropped due to the depression. Kobe Steel's sales also dropped, but by less than the other two's. Kobe Steel's sales increased by much more than the other companies' between 1995 and 1997, which then showed the largest fall of 16% in 1998. Such a shift in sales indicates that the special demands of large-scale works and construction materials related to the reconstruction projects concentrated at Kobe Steel for about three years. As a matter of fact, MAKI Fuyuhiko, the former president of the Kobe Chamber of Commerce and Industry who displayed a great influence on the reconstruction policy, was from Kobe Steel, Ltd.

Profit from Disposal of Land

In the HAT Kobe project, a large area of idle land owned by Kobe Steel (40.8 hectares) and Kawasaki Steel (26.5 hectares) was changed from a coastal industrial zone into a residential and commercial zone, and 15 hectares of the land was sold to Kobe city, Hyogo prefecture and the Urban Development Corporation (then) for high prices (1.5-3.5 times). Kobe Steel made a profit of nearly 30 billion yen and Kawasaki Steel made 21.8 billion yen.

Kobe Steel, Kawasaki Steel and Kobe city originally had a plan to develop the water-front zone but it was still only a rough idea. The City of Kobe, however, moved ahead with the project after the earthquake under the name of the construction of post-disaster housing. Full-fledged business talk over the site acquisition started around September, 1995, and the land for which buyers could not find easily during normal times traded at nearly maximum prices. On top of that, it was decided that Kobe Steel and Kawasaki Steel were receiving compensation for moves of 18 billion yen which was included in the total budget of 56 billion yen for the land rezoning project in this district.

This example gives proof that the reconstruction was major enterprises-oriented.

(DEGUCHI Toshikazu / KIKUMOTO Yoshiharu / KITANO Masakazu)