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Japanese City Finds It's Hip to Be Uncool

Years of Fiscal Conservatism Pay Off as Now-Trendy Nagoya Area Booms

By Anthony Faiola
Washington Post Foreign Service
Wednesday, March 30, 2005; Page A08

NAGOYA, Japan -- For decades, even centuries, this city at the core of Japan's third-largest metropolis got no respect. Comedians joked about Nagoyans' taste for fried foods and gaudy fashions and poked fun at their quirky dialect. Long the nation's car manufacturing center and geographically sandwiched between cosmopolitan Tokyo and sassy Osaka, the Nagoya area in central Japan was viewed as this country's equivalent of the American Midwest.

But the sophisticates in Tokyo and Osaka aren't laughing anymore. In a nation still struggling to find its footing after a 13-year economic slump, Nagoya is riding high as Japan's city of the moment. With an economic growth rate of 2.8 percent, greater Nagoya -- home to 7.2 million people and some of Japan's most successful companies, most notably Toyota Motor Corp. -- is sizzling along at more than double the national average. The region boasts an unemployment rate of 3.5 percent, markedly lower than the national rate of 4.7 percent, according to government statistics.

World Expo 2005 selected the Nagoya area with the help of lobbying from Toyota. The event is projected to lure 15 million visitors and bring $7.9 billion to the region. (Koichi Kamoshida -- Getty Images)

Last year, seven of the 10 districts with the fastest-growing real estate values in Japan were located in Nagoya. A $6 billion international airport just opened, as did two theme parks, Japan's first commercially operating magnetic-levitation train and a host of new skyscrapers in a part of the city being dubbed by local officials as "Japan's Manhattan." With the help of heavy lobbying from Toyota, the Nagoya region landed the 2005 World Expo, which opened Friday and is projected to lure 15 million visitors and bring an economic windfall of $7.9 billion to the region before it closes in September.

Talk now is about what the rest of the country can learn from Nagoya's achievements. Most emblematic of the region's success is Toyota, which recently bested both Ford and General Motors for bragging rights as the world's most profitable carmaker. Like many corporations in conservative central Japan, Toyota, which maintains about 90 percent of the 66,000 members of its domestic workforce in the Nagoya area, did not overinvest in the Japanese real estate bubble of the 1980s. While that was one reason Nagoya did not prosper as much as the rest of the country during those heady days, it also meant the region was largely spared the prolonged recession that began in the early 1990s.

Companies here are now in better fiscal position than their peers nationwide, allowing them to spend more on growth and innovation through research and development, analysts say.

"Nagoya is doing better than the rest of Japan today because of a local culture of not being wasteful or risky," said Shinobu Iguchi, senior economist at the city's Kyoritsu Research Institute. "The rest of Japan made fun of that aspect of Nagoyans in the past, but the success in the region now speaks for itself."

But analysts also cite Nagoya's reputation for being stingy. In the past eight years, the city has trimmed 13 percent of its workforce, or 3,648 jobs, deemed part of a bloated government bureaucracy.

In the country that turned pork-barrel politics into an art form, the new international airport in Nagoya has been hailed in national newspaper editorials as a rare example of good civic management. Inaugurated in February, the project came in about $1.2 billion under budget and changed the very concept of what an airport can be. Local day-trippers head there to visit a mock Japanese village and a hot springs resort, which overlooks the runway and is housed inside the airport itself. At the same time, the airport -- about 180 miles west of Tokyo, or two hours by train -- has drawn leading foreign and domestic carriers that are using it as a cheap alternative to Tokyo's Narita Airport.

For Nagoya, it has all meant a renaissance of sorts. The ancient city had its glory days in the late 16th century, during the era of Ieyasu Tokugawa, who later became Japan's most powerful shogun, or military ruler. But even he was forced to leave Nagoya for Tokyo, then called Edo, in order to expand his power.

Still, the Tokugawa spirit, officials here are fond of saying, remained in the hearts of Nagoyans. "More than any other part of Japan, I believe that Nagoya still enjoys the strongest culture . . . of the way of the samurai," Takehisa Matsubara, Nagoya's mayor, said in an e-mail.

To emphasize that point, the city unveiled a new Japanese garden dedicated to the Tokugawa family last November. At the same time, Nagoya has tried to drop its staid image with a campaign that is apparently bearing fruit. Even the above-it-all denizens of Tokyo are abuzz about "Nagoya chic." The popular fashion magazine JJ recently featured several spreads on trendy central Japanese women under the title "Mademoiselle Nagoya." Restaurants nationwide have begun serving the city's famed culinary specialties, such as fried pork cutlets with a thick red miso sauce. Nagoya's museums, several of which underwent renovations in preparation for the World Expo, will host major new exhibitions of European and Japanese masters.

"The rest of Japan, and even foreigners, are realizing our worth," said Miyashata Hido, 67, a retired local factory worker lining up to bathe in the hot springs in the new Central Japan International Airport. "We are finally getting our due."

Special correspondent Akiko Yamamoto contributed to this report.

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