Requests for tapping into the fiscal and investment loan program (FILP) stand out in the budget request for fiscal 2018, for which the Ministry of Finance closed the application period at the end of August. Relevant ministries and agencies are looking to use independent administrative entities and private-public funds to beef up the exports of Japan’s cutting-edge infrastructure expertise and make the country’s industry more globally competitive. Though they want to capitalize on low-interest money to extend longer support, many projects are not producing results. It will become imperative to strictly examine projects for effectiveness.
MOF will tally up the total sum of requests for the fiscal 2018 FILP program within the week. The requested amount of FILP money is projected to fall below the level of a year ago for the first time in two years and come to around 13-15 trillion yen.
The requests from various ministries are aimed at promoting infrastructure-related exports, a project which the government identifies as a plank in its “Investment for the Future 2017.” The Ministry of Land, Infrastructure and Transport (MLIT) plans to add overseas consultancy to the operations of the Japan Railway Construction, Transport and Technology Agency (JRTT). It has made a fresh request for 1.5 billion yen and is also looking to revise the law within fiscal 2018 to expand the scope of JRTT operations.
From public-private funds, the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN), an entity overseen by the MLIT, has requested more money from the FILP. The Fund Corporation for Overseas Development of Japan’s ICT and Postal Services (Japan ICT Fund), which comes under the supervision of the Ministry of Internal Affairs and Communications, also sought more FILP money. As the government seeks to broaden Japan’s overseas reach by making use of funds and human resources with skills and knowledge, ministries and agencies are working in tandem to beef up their overseas push.
The Cool Japan Fund, which is under the aegis of the Ministry of Economy, Trade and Industry (METI), is also requesting an increase in the FILP budget. These government-affiliated funds and independent administrative entities share the same goal of exporting Japan’s infrastructure expertise and developing overseas markets. But this gives the impression that they are promoting a similar policy without a clear distinction of their roles. It will become necessary to clarify the objectives of individual policies and the results they aim to produce.
In the agriculture field, the Agriculture, Forestry and Fisheries Fund Corporation for Innovation, Value-chain and Expansion Japan (A-FIVE) and the Japan Finance Corporation are expected to facilitate the realignment of material manufacturers as well as distributors and processing firms of farm produce through money injection and lending. While the government aims to slash material costs to make Japan’s farm sector more competitive, A-FIVE is not financing many investment projects. Raising the policy effectiveness will become important down the road. (Abridged)