Locally Sustainable Economy Supported by Community Currency

In recent years, we have been witnessing an increasing enthusiasm among Japanese people for building a locally sustainable economy in which the guiding principle is the local consumption of locally produced goods. For example, consumers seek safe local foods produced by someone they know personally rather than those imported from afar. In addition, despite Japan's low self-sufficiency rate for lumber (less than 20 percent), coordinated efforts have been made among foresters, lumber workers, architects, and consumers to build houses with local lumber. Despite also the nation's heavy dependence on foreign energy, a trend is emerging where citizens use locally available energy sources including wind and solar power, as well as biomass obtained from nearby hills.

A locally sustainable economy has low maintenance costs and requires less energy or resources for transportation, promotes trust between producers and consumers through personal contacts, and is less vulnerable to problems often seen in more complex economic systems. In the process of modernization, Japanese people have paid much attention to what is happening around the world. They are now starting to take a closer look at their own surroundings, and from there, they are actively seeking to build real, as opposed to virtual, links between and among people, local communities and the environment.

When goods and services are produced and consumed locally, money circulates within a community. Recently in Japan, various efforts have been made to use community currency as a means of community revitalization.

In the 1930s complimentary currency (as contrasted with national currency) was used in many places around the world. In the days of the Great Depression when national currencies were severely devalued (hyperinflation), numerous banks and companies suffered bankruptcies. This led to a tremendous increase in unemployment and consequently, people spent less money, which led to a further decline of the economy. As a result, the unemployment rate grew to over 25 percent (in the U.S.).

Under circumstances where national currencies were increasingly unavailable, complimentary currencies were introduced to allow people to create job opportunities by exchanging goods and services and thus secure the bare necessities of life. In some cases, certain incentives were used that motivated people not to store currencies. For example, when not used for a period of time, stored currencies were automatically devalued.

Today about 2,500 to 3,000 community currencies are used in various regions of the world. In Japan, activities related to community currency were greatly energized in 1999 by a TV program aired on NHK-BS1, entitled "Ende no yuigon: Kongen kara okaneo tou" (Ende's will: A radical inquiry into money).

The following sites take a look at the current status of community currencies in Japan. The first site offers a report from the Survey on Community Revitalization with Local Currencies by the Japan Center for Regional Development.,The second site covers a presentation by Mr. Yoshiyuki Tokutome at the International Symposium on "Space, Place, and Networking: Inheritance and Creation." Mr. Tokutome is also the administrator of the website "Japanese Community Currency List."
http://www.chiiki-dukuri-hyakka.or.jp/7_consult/kenkyu/docu/chiikitsuuka.pdf (Japanese only)
http://www.cc-pr.net/list/ (Japanese only)

The Japanese Community Currency List includes 508 projects as of December 10, 2004. When an additional 386 projects (organizations) that adopt the time dollar system named "Fureai Kippu" (meaning "communication ticket") are counted, the total number is closer to 900. Showing a growing trend, while only seven projects were reported before 1996, the number of community currency initiatives has been on the rise since then: 61 cases in 2000, 145 in 2001, 267 in 2002, 357 in 2003 and 424 in 2004.

By prefecture, Hokkaido leads with 43 projects, followed by Hyogo (42), Tokyo (29), Nagano (28) and Kanagawa (19). The large number of initiatives in Hyogo Prefecture seems related to the volunteer activities that have flourished since the Great Hanshin Earthquake in 1995. Furthermore, as Hyogo, Ehime and Shizuoka Prefectures have employed a measure to provide subsidies for community currencies, these prefectures tend to report more projects than others.

As for the number of participants in each community currency system, the groups with "less than 50 members" and "50 to 100 members" account for 60 percent of the total, indicating that small-scale systems are widely recognized in Japan. As for the extent of circulation of community currency related goods, circulation within the municipality accounts for about half of all transactions.

Regarding the type of organizations issuing community currencies, voluntary groups and non-profit organizations account for about 70 percent, chambers of commerce and industry eight percent, municipal governments six percent, and local shopping districts five percent. The original participants were mainly voluntary groups and non-profit organizations; subsequently various organizations have gradually joined the movement. In the last several years, municipal governments as well as chambers of commerce and industry have also actively started their own currency systems.

Small local shops all over Japan are declining because giant shopping malls have been moving into their neighborhoods. Community currency is drawing attention as a key to stimulating local economies and revitalizing local communities. In this article, we highlight some examples of this.

Sanjo City in Niigata Prefecture issues the community currency "Rate" (pronounced ra-tay). On its website, the city states the purpose of introducing community currency is as follows: (1) To promote activities of volunteers and citizens, thereby enhancing communications among people; (2) To vitalize local economy and to prevent money from flowing out of the community, aiming at an independent local economy; and (3) To promote the circulation of local resources (human resources, products, and services) to create a vital local community.

"Rate" is like a bill that can be used in payment for volunteer work or for part of one's expenses at local shops. Sanjo City considers it as a vehicle that circulates like money for community development. The city government prints, issues, publicizes, and raises awareness of this community currency. It also commissions the registration and matching of volunteer services, as well as the implementation of outreach events to a non-profit organization called "Chiiki-Tasukeai Network" (meaning "network for community mutual aid").
http://www.city.sanjo.niigata.jp/chiikikeiei/page00020.html (Japanese only)

Ehime Prefecture, another local government actively promoting community currency, has compiled and published a community currency management manual. Since the campaign's inception in 1994, more than 10 groups have embarked on their own community currency projects in the prefecture.
http://nv.pref.ehime.jp/servlet/Kokai (Japanese only)

Unique uses of community currency have been made that take into consideration local features and needs. In one region, for example, local citizens earn community money for the security of electric power generated by their photovoltaic systems. In another community, a market was created where people traded community currency for agricultural and processed goods as well as services.

After experiencing the era of rapid economic growth and the following bubble years, the Japanese economy is now in a long recession. Meanwhile, beneath the surface, citizens, who were struggling for economic development and GDP growth, now seem to have started asking themselves, "Wait a minute, now that the GDP has gone up, are we really happier? What do we really need?"

It is this feeling that prompts our search for ways to recover what has been lost in the process of economic development. Now is the time for such recovery. For the summer solstice in 2004, with the slogan of "Turn off the light, take it slow," some 6.4 million people participated in a nationwide event called "Candle Night" to rediscover and enjoy life by candlelight for two hours. Car-sharing efforts are also spreading across Japan to recover a more livable environment. People are now saying, "we should use a car only when absolutely necessary, even though we have been urged to own one in each family." They are also trying to rebuild links among family members, with local communities, and with the earth, as well as to recover their own spirits.

The basis and symbol of these activities is community currency, which is trying to return the monetary system to citizens' hands and to create a system where we use money for human happiness instead of humans being used by money. We will be keeping our eye on these activities supported by community currency, which unlike mainstream money that tends to control and dominate our lives, would allow us to use money for our own happiness.

(Junko Edahiro)

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