Just before departing for this year's Group of Seven summit in Germany earlier this month, Prime Minister Shinzo Abe announced that Shima, situated at the end of a peninsula in Mie Prefecture, will be the main venue for next year's annual gathering.

The announcement elated local residents, because the short but lucrative G-7 summit, slated for May, is expected to give a shot in the arm to the region, which, like many other rural areas in Japan, has a rapidly shrinking and graying population.

Abe named it the Ise-Shima Summit, after the area that includes the cities of Ise, where Japan's top Shinto shrine stands, and Shima, where the summit will be held.

The other candidates sites were Karuizawa in Nagano Prefecture, Sendai, Niigata, Hamamatsu in Shizuoka Prefecture, Nagoya, Kobe and Hiroshima.

Why did Abe pick Shima?

It is widely believed the Ise-Shima region was chosen because of its manageable security environment and Abe's personal attachment to Ise Shrine.

Kashikojima Island, which is expected to be the main venue, is a tiny resort in Ago Bay linked to the mainland by only two bridges and a railway. This makes it relatively easy to restrict and check incoming and outgoing traffic, experts say.

Ise Shrine, which dates back around 2,000 years and is dedicated to the ancestral deities of the Imperial family, is one of the most sacred Shinto sites in Japan. In the Edo Period, it was the destination of pilgrimages from all over the nation, and prime ministers customarily visit the shrine in early January to offer prayers to kick off the new year.

Abe said he hopes to take the leaders of the other G-7 nations — the United States, Britain, Germany, France, Canada and Italy — to see the shrine and share its serene atmosphere with them.

Was Shima the prime candidate?

No. Shima was not even a candidate at first. But after encouraged by Abe's aides, it raised its hand to join the contest to be the main venue several months after the government's deadline as an exception.

Abe also reportedly considered using Hiroshima and Sendai. There was widespread speculation in the domestic media that by holding the summit in Hiroshima, Abe would be able to pressure the president of the United States to visit the site of the city destroyed by the world's first atom bomb, sending powerful nuclear abolition message that would win him votes just before the crucial Upper House election that summer.

However, Abe reportedly dropped the idea due to reservations expressed by other countries, including the U.S. Instead, Tokyo is now considering holding the G-7 foreign ministers' meeting in Hiroshima.

Sendai was a potential candidate because it was one of the many areas in the Tohoku region heavily damaged by the 2011 Great East Japan Earthquake.

Where has Japan hosted the summit in the past?

Japan hosted its first three G-7 summits in Tokyo.

It then held the 2000 summit in Okinawa and the 2008 summit in the town of Toyako, Hokkaido, reflecting a recent trend of using remote, less-populated resorts to thwart protesters and improve security.

Okinawa was chosen because the late Prime Minister Keizo Obuchi was said to have had strong emotional attachment to the prefecture.

Bill Clinton, who attended the Okinawa summit, became the first U.S. president to visit Okinawa since the war-battered island reverted to Japanese control in 1972.

As for the 2008 summit, Toyako was a strong candidate early on because the picturesque resort, centered on a lake in nature-rich southwestern Hokkaido, made it easier to provide security for the leaders.

What are the economic benefits of hosting the event?

Even though the political influence of the G-7 meetings is said to be waning, many experts say the economic impact on the host countries remains large.

The Hyakugo Economic Research Institute, an arm of a Mie-based bank, estimates the summit's economic impact on Japan could reach about ¥51 billion, including ¥13 billion for Mie alone.

Of the ¥51 billion, ¥7.4 billion is expected to come from an increase in accommodations and dining, and ¥2 billion from construction work.

For the 2008 Toyako Hokkaido summit, the Hokkaido Economic Federation estimated the event would generate a sustained economic impact of about ¥28 billion for five years afterward.

But others said the windfall didn't last that long, considering tourism to Toyako sank from 3.38 million in 2007 to about 2.24 million in 2012.

How much will the Ise-Shima summit cost?

No one knows, but the Hyakugo research institute estimates the overall budget will come to around ¥27 billion. The think tank said the cost can be reduced by using existing facilities instead of building new ones.

The cost of holding the event will be shared by the central and local governments. Although the ratio is not yet known, Mie Gov. Eikei Suzuki said at the news conference after Abe's announcement on June 5 that he believed Mie's burden would not exceed the roughly ¥1.5 billion Hokkaido paid for the 2008 summit.

Japan has drawn flak from the public and its G-7 peers in the past for splurging on the summit and related events, handing out extravagant souvenirs, such as wine glasses and lacquered letter boxes, to participants and journalists alike.

For example, the cost of the 2000 Kyushu and Okinawa summit reached an eye-popping ¥80 billion.

Given the backlash, the government aimed to hold a "compact and effective" summit in 2008, using an existing hotel and facilities in Hokkaido. Even so, the total budget came to around ¥37 billion.

About half the cost was reportedly used for security and counterterrorism measures.

What are the local governments in Mie hoping to get out of the summit?

As Shima is no exception to Japan's rural depopulation trend, it is aiming to use the summit to revitalize the area by heavily promoting the region and increasing tourism, and hopefully residents as well.

Shima is among the 869 municipalities that the Japan Policy Council, a Tokyo-based think tank, recently said were at risk of "disappearing" in the near future due to fewer births. The list accounts for about half of all the municipalities in Japan.

Shima's population stood at around 53,000 in May, compared with 63,000 in 1995.