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US military spending boosts Okinawa coffers ¥200 billion

Date Posted: 2007-03-16

The American military presence is good for Okinawa’s economy.

A new estimate shows Okinawa benefited by billions in 2004, the year studied by Pentagon analysts who say it is very accurate. The military spending accounted for 5.3% of Okinawa Prefecture’s income. The report was issued by the Prefecture.

The military spent ¥72.9 billion in business dealings with companies in the Prefecture, pretty much the same figure as a year earlier. Officials say U.S. payrolls for workers on bases, and land lease payments push the total over ¥200.6 billion. Much of the spending, 43.5%, was channeled to business linked to construction projects. The Defense Facilities Administration Bureau oversees that process, which includes responsibilities for both American military and Japanese Self Defense Forces bases.

A drawback uncovered in the analysis is that more than three-quarters of the money was spent with Japanese companies whose headquarters are not in Okinawa. A Prefecture official says there will be an investigation as to why Okinawa companies are losing out to mainland businesses.

More than ¥22 billion was spent for direct transactions with American forces, including contracts for fuel oil, dry cleaning and business operations. Officials say 19.4%, about ¥14.5 billion, was spent by American military personnel and their family members.

The Prefecture says it uses its own methodology to calculate military spending, but did not dispute the American findings. The Prefecture also factors in currency exchange rates, its own studies, and the American estimates.

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