ECONOMY-JAPAN: Alternative Currency Brings Communities Together

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Dec 12 2002 (IPS) - When Takayuki Miyamoto needed help to do roof repairs in his hometown in northern Japan, he paid for the services using currency – but of an alternative kind, called ‘kurin’.

‘Kurin’, named after Kuriyama, a town of 15,000 people in Hokkaido where he lives, is community currency that he earned by extending the same construction help to another needy resident in the past.

The same currency also pays for other services the people in his community needs – such as English-language lessons or shopping errands for the busy or elderly folk, under a scheme that began in September and now has 70 members. To a growing number of Japanese in different parts of the country, small schemes like these are a source of comfort in a lacklustre national economy where financial difficulties have often forced people to look after their own plight before that of others.

The use of community currency, under which services of value are exchanged between people within a community, has in fact caught the fancy of many over the past two years.

Dogged by unemployment and low availability of capital, several communities have been using community currency as an alternative to purely cash-based transactions – in the form of tokens, coupons or swatches of silk – to jumpstart the economy and build a more caring environment.

Today, more than 130 regional currencies are already operating or being formed across Japan, says Shinicho Kondo of the EcoMoney Network, a non-profit organisation promoting the use of community currency.

”When Japan was rich, everybody wanted to make profits. Now that we are on the downside, the focus has returned to the role of the community to make a living,” explains Kondo.

In Tama, a residential town in western Tokyo, members of the community currency scheme, use ‘comos’ – coined from ‘community’ and ‘common’ – to look after one another.

Under the scheme launched in June 2000, the more than 100 members, mostly in their forties and fifties, offer services and skills that they are good at or comfortable with – babysitting, home help, driving – in exchange for comos, issued in denominations of 100, 500, and 1,000.

The notes can then be used to buy services from other members, who list the services they offer on a community menu.

In Yamato City, outside Tokyo, 90,000 shops and residents are also busy with their own currency scheme. The Yamato Nijodori Shopping Association, a street dotted with local shops run by residents, reports a brisk trade based on promissory notes called love.

The concept of linking communities through services has proved valuable in Japan in many ways against the current gloomy economic atmosphere, explains Naruhito Saito, a researcher at the Development Bank of Japan.

”By exchanging community currency for services, people with latent skills are able to put them to practical use. Once these skills are brought to life, they could lead to new business opportunities and ventures,” he says.

Experts also point out that by offering services to each other, communities are re-asserting and reinforcing traditional values, such as caring for each other in times of crisis. This is a source of security to many because ”rapid urbanisation and materialism has eroded the strength of the community”, says Kondo.

Saito adds that the sluggish economy has hit the rural areas the worst, and community currency has become a way for them to cope with the hard times and still look after basic needs.

”These people have lost confidence in regular money,” he explains. ”They think community currencies could play a role in supporting our lifestyles because this currency is backed by actual demand.”

Already, experts say, community currency schemes such as the one in Chiba are nurturing modest businesses. For instance, its two-year-old community currency system that uses peas – short for peanuts, a speciality of the area – has been successful in expanding the businesses of 20 shopowners there.

The shopowners say sales have risen by 5 percent since they joined the community currency system.

As of last month, 540 residents and 50 shops had signed up to trade in peas. Elderly women who care for the plants that line the shopping promenade in Chiba are paid in peas, which they can then exchange for other community services.

”Additional local currencies are a form of capital flight,” says Noriko Hama of the Mitsubishi Research Institute. ”If they come to be increasingly widely used as methods of payment among the local citizenry, their circulation could actually lead to a net increase in regional spending power.”

Not everyone, however, is entirely sold on the use of alternative currency especially beyond the limited community level, and say they are keeping watch to see if the current trend does change society’s behaviour or is just a fad during hard times.

”I am not turning my back on it,” says a local shopkeeper who joined a community currency scheme a year ago. ”But I keep wondering whether this will work in Japan, where the spirit of caring is not like in the West. People here belong to a group and cannot open up to a community that has a variety of interests, which means this could turn out to be something short-lived,” he muses.