SAGIP 98 GAME BRIEF

1
Influence of the U.S. Military Force Presence On
Okinawas Economy Presented to American Society
of Military Comptrollers (ASMC)
2
Agenda

• Background
• Sources
• Data collection and analysis
• Distinguishing Features of Okinawas Economy
• Key Economic Facts
• Impact of U.S. military on Okinawas economy
• Direct U.S. Spending
• Relative Shares of Spending

3
BACKGROUND

• OAFO Economic Impact Study
• First study completed 1996
• Updated in 2001, 2004, 2008
• Represents a high resolution snapshot
• Is not a microscopic, detailed analysis
• Data is accurate, but broad in scope

4
BACKGROUND

• Sources
• Four services of the U.S. military
• Okinawa Defense Bureau
• Okinawa Prefectural Government
• Cabinet Office, Okinawa General Bureau
• Bank of the Ryukyus

5
BACKGROUND

• Data
• Requested relevant data from all sources
• Data requested in broad categories
• Provided in sub-total, aggregate form
• Did not break out specific cost / pay items
• Some data based on extrapolation and estimates

6
Okinawa

7
Comparative Analysis
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Distinguishing Features of Okinawas Economy

• Unbalanced economic structure
• Economy heavily dependent on Government of Japan
  subsidies
• Lowest Per Capita Income in Japan
• Highest unemployment rate in Japan
• Lowest personal savings per household
• High ratio of debt to savings

9
GPP by Sector
Total Gross Prefectural Product 29B
Agriculture, Fishing, Forestry
Manufacturing Construction
2
13
85
Commerce Services
10
Employment by Sector
Agriculture, Fishing, Forestry
Manufacturing Construction
5
19
76
Employers 1 OPG 23,000 employees 2 US
Facilities 9,066 employees
Commerce Services
11
Okinawas Employment by Sector
TERTIARY (SALES, SERVICES)
SECONDARY (MANUFACTURING, CONSTRUCTION)
PRIMARY (AGRICULTURE, FISHING)
12
Key Economic Facts
13
Economy Central Government Spending in Okinawa
as a Percentage of GPP
Other Prefectures
Okinawa
27
40
60
73
Central Govt Spending
Other Sources
14
Economy Okinawa Prefectural Governments Budget
Revenue
Other Prefectures
Okinawa
28
50
50
72
Independent Sources
Dependent Sources
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US Forces Impact on Okinawa Economy
Overall, the US military presence on Okinawa
inputs at least 1.9B in direct spending into the
local economy in the form of base-related
contracts, personnel-related spending, base land
lease payments, Japan Facilities Improvement
Program (JFIP), local national employment (9,066
employees), and specialized subsidies. This
accounts for about 6.7 of the GPP as compared to
9.8 for tourism, and 1.4 for agriculture/forestr
y/fishery.
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Direct SpendingBase Related Contracts (FY07)
Sub-total..298,909,927
17
Direct SpendingPersonnel Related (FY07)
Sub-total..175,054,904
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Direct SpendingFunded by Govt of Japan (JFY05)
Sub-total 1,450,258,499
Total Impact of US Forces Presence
1,924,223,330
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Relative Shares of U.S. Base Impact


2B FY05



Funded by the Government of Japan
Utilities - cost shared between both governments
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US Forces Impact on Okinawa Economy
US Forces Presence (2B) accounts for 6 10 of
Okinawas Gross Prefectural Product (Spending)
US Forces
6
94
US Forces
Other
21
US Forces Impact on Okinawa Economy
US Forces Spending in Okinawa in Relation to the
Growth in Okinawas Economy (Gross
Prefectural Product)
22
Questions?