(Asahi: November 17, 2015 – p. 7)
By Satoshi Seii in Manila; Daisuke Hirabayashi; Go Kobayashi
Japan will make efforts to create an environment conducive to exporting infrastructure at the Asia-Pacific Economic Cooperation (APEC) summit taking place in Manila, the Philippines, from Nov. 16 and other international conferences. It will advertise the high quality, including safety, of Japan’s products, taking a different approach from price cutting competition. However, this may not be effective enough to fight back against China, which is stepping up its offensive.
At a ministerial meeting on the afternoon of Nov. 16, Minister of Economy, Trade and Industry Motoo Hayashi proposed a new system for advanced nations to assess and give advice on developing countries’ infrastructure development systems. He succeeded in obtaining consent to launch the system next year.
Exporting infrastructure is a key component of the Abe administration’s growth strategy. Prime Minister Shinzo Abe has pledged to increase exports threefold from the 2010 level to 30 trillion yen by 2020. He has personally taken part in leader-level marketing efforts.
The new Japanese-style bidding system to be introduced is meant to encourage developing countries to assess quality, including safety and operating cost, in the bidding process. This is “actually a measure to counteract the Asian Infrastructure Investment Bank (AIIB),” according to a Japanese government source, because the AIIB’s selling point is speedy investment decisions.
However, it is up to the developing countries to decide whether they will employ the new system. There is an opinion that “the common folks regard the cheapest deals as the best deals,” observes a senior Philippine government official. Although China has not responded officially to this proposal, it does not appear to be very enthusiastic because it is currently preparing to set up the AIIB and a $40 billion (approximately 4.9 trillion yen) fund for infrastructure exports.
One reason behind Japan’s stepped-up efforts to regain lost ground is the shock of unexpectedly losing the bid for the Indonesian high-speed railway project to China. Japanese companies did the preliminary surveys, and they were expected to land the contract for sure if Indonesia decided to undertake the project. An executive of a major manufacturer laments that “the government’s assessment of the situation was too optimistic.”
Private companies also have high hopes for infrastructure exports. With prospects dim for expansion of domestic business, Keidanren (Japan Business Federation) has recently compiled a report recommending that the government plays a more active role in coordinating infrastructure exports. It cited Indonesia, Vietnam, Myanmar (Burma), and other countries as key targets and called for the expansion of loans by the Japan International Cooperation Agency (JICA) and Japan Bank for International Cooperation (JBIC). (Slightly abridged)