Early relief funding provided by the GARIOA (Government and Relief in Occupied Areas) was taken over by the LARA Program (Licensed Agencies for Relief in Asia) in 1949. This was the start of economic recovery in Okinawa.
The U.S. military placed Major General Joseph R. Sheets in command of the U.S. Directive Administration for Okinawa (RYCOM) as governor to oversee the restoration of order in the government. General Sheets planned for the permanent rule and construction of U. S. Military bases on Okinawa and accomplished a number of policies during his time. The policies he advocated were received by the Okinawans kindly and his term in office was widely regarded as "The Good Government of Sheets".
The first of his policies implemented as governor was the reorganization of the jumble of military facilities and facilities construction with a high degree of order and efficiency. In the next set of policies he set out to accomplish increasing the extent of social welfare systems. The third set of policies was the public recognition of self-rule, the reduction of military government on each of the island groups, and the implementation of elections for governor and members of an island-wide legislature. In December 1950, the American Far East Command issued orders for dissolution of the U. S. Military Government and the establishment of the United States Civil Administration of the Ryukyu Islands (USCAR) .
In September of 1951, representatives from fifty-two nations gathered at U.S. invitation in San Francisco and opened a conference on the proposed peace treaty with Japan. Japan called for a universal peace treaty with all nations that it had fought with in WWII, including the Soviet Union and China. Prime Minister Shigeru Yoshida participated in the conference which resulted in the conclusion of a peace treaty with forty-eight of the participating countries. This was the San Francisco Peace Treaty.
In the 3rd article of the treaty, it stated the conditions of U.S. right to rule the Okinawa and Amami Islands. In three months time over 70% of the legal voters in Okinawa signed petitions in objection to this, but this was disregarded by both the Japanese and U.S. governments. Simultaneously, Japan concluded the Japan - U.S. Security Treaty. On April 28, 1952 both treaties took effect and Japan regained its independence.
Okinawa was separated from Japan and became the "Keystone of the Pacific," assuming an important and strategic place in U.S. policy in Asia.