May 22 (Bloomberg) -- Used syringes litter the streets. The air reeks of urine. Homeless men wander the sidewalks.
The central Airin district of Osaka is suffering the ravages of deindustrialization. The home of Panasonic Corp. and Sharp Corp. has turned into Japan’s most crime-ridden metropolis.
Leaders of the country’s third-biggest city are beginning to fight back, drawing inspiration from New York City’s experience of improving public safety as the first step in a turnaround. Prefectural Governor Ichiro Matsui led a delegation to Manhattan last year to study urban development and education.
“Harlem in New York has changed and now bustles with people,” Matsui, 50, said in an e-mail. “Airin has to be reborn like Harlem, and stamping out drug dealing is one of the things we must do.”
While the urban dysfunction that has plagued the U.S. and Europe is largely absent in Japan, it’s bad enough in downtown Osaka to get residents riled up. A petition submitted to local leaders in December, complete with photos of used syringes discovered near a school -- including one in a six-year-old’s bicycle basket -- resulted in the installation of 30 security cameras, 160 new street lights, and a renewed commitment to crack down on drug dealing.
Cleaning up is important because Matsui and Mayor Toru Hashimoto have made tourism, and attracting Japan’s first casino, the centerpiece of a redevelopment plan.
The loss of 416,000 jobs in the prefecture since 1995 has fallen particularly hard on Airin, which had a skid row even when times were good. It was also the site of four days of riots and disturbances over police corruption in 1990.
The area was a once-bustling hub for the day laborers who thrived during the post-World War II boom. They worked at construction sites and bedded down at cheap hostels that dotted the area. Their numbers peaked at about 1.9 million in 1989, the peak of Japan’s bubble economy, and have since fallen to about 300,000, according to Inclusive City Net, a local research institute.
Osaka’s prosperity dates back 14 centuries when the then-emperor settled in the city. The capital subsequently moved to Nara and Kyoto, neighboring cities that are now tourist destinations with a slew of temples.
Osaka remains the core of Asia’s third-biggest metropolitan economic region after Tokyo and the Seoul-Incheon area in South Korea, according to figures compiled by the Brookings Institution in 2012. The Osaka-Kobe area, with a population of 18.6 million, had economic output of $655 billion, larger than Switzerland’s. This year, Japan’s tallest skyscraper, Abeno Harukas, opened less than a mile from Airin.
Closer to street level, workers’ hostels have morphed into tourist lodging. Yukihiro Asada is among the hoteliers who have capitalized on growing demand from foreign travelers drawn by Kyoto, 40 minutes away by train.
Asada, 37, took over a five-story lodging from his grandmother in 2007. Virtually all of his customers are from abroad, said Aika Morita, 24, an English-speaking college graduate who wants to start her own guest house. She now works reception, where the burning incense cuts the neighborhood odor. Rooms -- without air conditioning -- cost as little as 1,600 yen ($16) per night.
“Backpackers from Spain, France and many Southeast Asian countries are our core customers now, and more would come if the town gets cleaner,” Asada said. “For many Asian travelers, the drug problem is a concern,” he said.
One-fifth of Osaka prefecture’s drug arrests are made in Airin, says a report compiled by the government. They rose 2.3 percent to 1,836 in 2012, led by an increase in arrests for illegal stimulants including amphetamines, according to data from the Osaka Police. Nationwise, drug arrests fell 1.2 percent to 14,017.
Municipal leaders are sensitive to the district’s reputation. Film director Shingo Ota pulled his movie “Kaihoku,” meaning “liberated area,” about Airin from the Osaka Asian Film Festival in March after officials asked him to delete some scenes, Kyodo News reported in February without citing sources of the information.
The tourism gap with Tokyo, site of the 2020 Olympics, may widen as the games approach. In Tokyo, the number of nights stayed by foreign visitors totaled 9.98 million in 2013, the highest among Japan’s 47 prefectures, while Osaka had 4.31 million, the Japan Tourism Agency reports.
Matsui said reviving Osaka, whose economy shrank 6.2 percent the past decade, is key to spurring the national economy and the casino project, targeted to open before the 2020 games, is vital.
“Osaka has to become a big engine to lead Japan’s economy with Tokyo,” Matsui said. “The resort project will attract a lot more people and expand our economy.”
To contact the reporter on this story: Shigeru Sato in Tokyo at firstname.lastname@example.org