Bittersweet recovery for quake city

ARRIVING in Kobe is a shock, but not for any of the reasons you would expect. Anyone who was near a television on 17 January 1995 - a year ago this week - will remember the images that made the city famous after the enormous earthquake that struck at 5.45 that morning.

Today, if you didn't know that the city had suffered Japan's worst natural disaster in 72 years, you would never guess. Perhaps, if you drove around for long enough, you might notice a curious freshness to the facades of many of the buildings and a large number of vacant lots. Occasionally you would see cracked plaster or boarded-up windows and all over town you would spot oxyacetylene torches flashing from the top of tall buildings sheathed in blue tarpaulins. A year on, Kobe looks like a prosperous, badly planned town with a lot of building sites: in other words, like everyJapanese city.

But in a number of ways, Kobe may have healed too quickly for its own good. The superficial recovery masks deep economic and social problems and its speed has been matched only by the alacrity with which the rest of Japan has forgotten about it.

"Kobe has no scars now," says Kiyoyuki Kanemitsu, of the city's international division. "You couldn't help being impressed by the power of the Japanese economy - equipment and people from all over Japan. But it makes it easier for people to forget, especially if they didn't see it at its worst."

In any other country, the earthquake would have been the human-interest story of the decade. But 1995 was no ordinary year for Japan. The nation was preoccupied with other disasters - in March, the nerve gas attack perpetrated by the Aum Shinri Kyo cult and in August, the spotlight was on the atomic bombings and war defeat of 50 years ago.

More than 6,000 people died in Kobe. Twelve died in the subway attack. But they died in Tokyo, home to most head offices, government agencies and media companies. And the daily revelations about the bizarre religious cult made for far more gripping TV than repetitious images of destruction and distress. "Kobe had two disasters last year: the second one was Aum," says a student from Tokyo, one of thousands who poured into Kobe as aid volunteers after the earthquake. "Almost immediately, we felt the impact. The donations began to dry up. Gradually, the volunteers packed up and went home."

On the face of it, after all, the city was doing well. By the end of April electricity, gas and water supplies were fully restored and the bullet train, the crucial link between Tokyo and western Japan, was back in action. Eighty per cent of the debris - equivalent to six years' rubbish - has been removed. Kobe port, once the second biggest in the world, is working at four-fifths of its former cargo capacity.

But these repairs were largely funded by the government. It was also the government that provided temporary housing to 60,000 of the 300,000 evacuees who had nowhere else to go. "As far as last year went, it was in the government's interests to boost the economy, and they did their best," says Mr Kanemitsu. "We feel grateful, but it is this year that we have to worry about."

The total damage from the quake is estimated at about pounds 60bn, much of it suffered directly by the city government. One quarter of the city's budget goes towards servicing its debt, while tax revenues have plummeted as incomes have fallen and companies relocated elsewhere. Unemployment, officially just 1 per cent above the national rate, is certainly much higher.

The Japanese economy, limping uncertainly out of a two-year recession, offers few reasons for optimism. Companies with ruined offices can find cheap, vacant alternatives outside Kobe and many are using the earthquake as an excuse for breaking the unwritten rule that Japanesecompanies do not sack employees. The city has been lobbying the central government for radical measures: an experimental programme of deregulation to encourage reinvestment.

"But they just tell us that it's 'rather difficult'," says Mr Kanemitsu. "They gave us 3 trillion yen (pounds 18 bn); they think Kobe is still playing the quake card to get more money. We work in government, too - we can understand that."

The lack of money leaves Kobe with an acute dilemma: how to remind the rest of Japan of the disaster while still presenting itself as a credible place for business. "Kobe is still suffering," Mr Kanemitsu says, "but 10 months on, there's a danger of creating the image of a damaged city, which is very unattractive to investors. And yet when we say that the recovery has been fast, people here are annoyed because they are still in a miserable state."