IDJ ENGLISH -Keidanren’s Request to the Government


Keidanren’s Request to the Government Promotion of strategic infrastructure exports

Editor-in-chief, International Development Journal Mitsuya Araki

$71 trillion global market of infrastructure investment
In March, the Japan Business Federation (Keidanren) published a proposal to the Japanese government titled “Toward the Overseas Promotion of Strategic Infrastructure Systems (the 2020 edition).”
The main contents are;
(Ⅰ)promotion of overseas expansion of infrastructure systems based on environmental changes,
(Ⅱ) specific requests for overseas promotion of strategic infrastructure systems, and
(Ⅲ) priority areas in the with post-COVID-19 era

According to the report, the global infrastructure market is based on the assumption that it will expand further into the future. The Organization for Economic Co-operation and Development estimates that infrastructure investment in 2000-30 will total $71 trillion. The Asian Development Bank (ADB) estimates that Asia’s infrastructure needs from 2016 to 2030 will be $22.6 trillion (more than $1.5 trillion annually).
That would amount to $26 trillion (more than $1.7 trillion annually) if the amount needed to mitigate and adapt to climate change is included. The proposal states that Japan needs to strategically take in such a global infrastructure market in the future.

Regarding the environmental changes of infrastructure systems, it is pointed out as follows.
(1) The spread of COVID-19 worldwide has caused delays and interruptions in business.
(2) With the spread of COVID-19 infection, digital transformation (DX) is particularly important, and it is necessary to accelerate the DX efforts of infrastructure systems.
(3) As the sense of crisis over climate change increases worldwide, efforts to decarbonize are required to be strengthened. Japan is required to expand its green infrastructure system overseas by utilizing its unique and excellent environmental technology.
(4) With the Biden administration in the United States, which emphasizes international cooperation, restructuring of the international economic order is expected. With the aim of realizing a “Free and Open Indo-Pacific” (FOIP)”, Japan needs to deepen inter-regional cooperative relationships through economic partnerships and pursue smooth movement and connectivity of global labor, goods, money and data.

4 requests to the government  
In December 2020, the government compiled a new strategy, ”the Infrastructure Systems Overseas Expansion Strategy 2025”, which looks ahead to the five years after 2021.It set an order target of 34 trillion yen for 2025, with (1) realizing economic growth by improving industrial competitiveness in response to carbon neutrality and digital transformation, (2) contributing to the achievement of the SDGs, and (3) promoting higher quality infrastructure overseas.

The government has so far bolstered the top sales by Prime Minister and bureaucrats and won overseas infrastructure projects.Furthermore, we have promoted the establishment of high-spec loans, yen loans, and the use of “Special Terms for Economic Partnership (STEP)”, expanded trade insurance such as the creation of a trade insurance scheme for institutional investors, and supported the overseas expansion of Japanese companies by developing rules for “higher quality infrastructure” and working on international standardization. Keidanren highly appreciates the government’s efforts.

Keidanren’s specific requests are as follows.
Firstly, responding to the challenges facing the world. (1) Strengthening measures against and supporting the infection of the new coronavirus, (2) promoting DX in infrastructure systems, (3) strengthening initiatives to develop green infrastructure, and (4) realizing FOIP.
Second, strengthening of the promotion system for winning projects. (1)Strengthening the control tower function and expanding budget measures, (2) further strengthening top sales, and (3) cooperation in third-country markets.
Thirdly, promotion of public measures through public-private partnerships. (1) Priority support for Operation & Maintenance (O&M). It is important to target not only advanced O&M using digital technology, but also O&M that meets the actual situation of host countries such as Africa. (2) strategic development of international standardization and international rule development, and (3) accelerating CORE JAPAN projects that co-create value in collaboration with local companies led by Japanese companies through public-private partnerships, (4) Strengthening support for promoting PPP, (5) strategically promoting human resource invitations, and (6) further promoting safety measures.
Fourthly, strengthening financial support, etc. (1) ODA (yen loan, grant aid, technical cooperation), (2) JICA overseas investment and loans, (3) JBIC investment and loans, (4) Nippon Export and Investment Insurance (NEXI), (5) other independent administrative institutions, etc.
As for (5), in order to reduce the risk of overseas infrastructure projects and businesses and to further promote private investment, it is considered effective to expand investment by funds that utilize public funds. Indonesia, for example, plans to build a government infrastructure fund worth up to $15 billion.

Areas of Focus in the Corona Era
Finally, priority areas in the with / post COVID-19 era include (1) green infrastructure (environmental and energy infrastructure that contributes to decarbonization), (2) development of digital infrastructure, (3) promotion of smart cities, (4) health and medical infrastructure, and (5) infrastructure for living and social activity.
If there are private opinions to add these points, firstly, it is the role of the general trading company in Japan. Secondly, the role of the development consultant of the ODA system with excellent ability in the development plan making.
First of all, is it necessary to reconsider the role of a general trading company that can be involved in the information and trends of the development plan at the front line of developing countries. It might be said that it is not such a time now, but why not reconsider the role of general trading companies again?
Next, ODA-based development consulting companies’ ability can be deeply involved from the infrastructure planning stage. If ODA is to be used strategically, it will take some time, but it will need to be pushed forward from the comprehensive development planning stage. There is an opinion that the comprehensive development plan is not effective in terms of time and expense, but I think that it is effective as an approach to get involved in the other party’s and gain trust.
It is not easy to quickly get infrastructure projects without taking some time to gain trust of other parties. In other words, logical, technical, and human trust are the key to the overseas promotion of strategic infrastructure systems.

For many developing countries, the people in charge of development planning are super-elite bureaucrats with clear and theoretical brains who have studied at top universities in Europe and the US.However, they are administrative men who do not know the practice. Therefore, it is required that the cooperating partners have human resources who can talk about practice and theory in an orderly manner. However, there is still great concern about whether such human resources will be secured on the Japanese side. In that sense, Japan’s way for the future cannot be too optimistic.


羅針盤 経団連の政府への要望 戦略的インフラ輸出の促進
本誌主幹  荒木 光弥


第3、官民連携を通じた公的施策の推進。(1)O&Mへの重点支援(デジタル技術を活用した高度なO&Mのみならず、アフリカなどのホスト国の実情に合ったO&Mも対象にすることが重要としている)、(2)国際標準化や国際ルール整備の戦略的展開、(3)日本企業主導で現地企業と連携しながら価値を共創するCORE JAPANプロジェクトを官民連携で加速させる、(4)PPP促進に向けた支援強化、(5)人材招聘の戦略的推進、(6)安全対策の一層の推進。