2 JAPAN SPECIAL ADVERTISING SECTION
To maintain their growth momentum,
the developing countries in Asia need
$26 trillion between 2016 and 2030
(more than $1.8 trillion per year) to i-
nance infrastructure projects in power,
transport, telecommunications and
water, according to a report by the
Asian Development Bank (ADB) re-
leased last year. Based on a study of 25
countries, the ADB estimates that total
infrastructure investments in develop-
ing Asia currently stands at around
$881 billion annually, leaving an an-
nual funding gap of $819 billion that
needs to be illed by both public and
private investors.
More than half (56 percent) of the
money will be required for power
projects; 32 percent for transport; 9
percent for telecoms; and 3 percent
for water. East Asia, including China,
will need the largest chunk of the in-
vestment, just over $16 trillion; while
South Asia needs $6.35 trillion and
fast-growing South East Asia, $3.1 tril-
lion. The remaining $611 billion will be
required in Central Asia and the Paciic
Islands. These infrastructure invest-
ments are crucial for Asian countries
to drive economic growth and attract
foreign investment; and Japanese
companies engaged in construction
are well positioned to support Asia’s
infrastructure drive.
“I was in Indonesia recently, it took
three hours by car to travel 40 km. This
is nothing unusual, it happens every
morning and evening there,” says Mr.
Kotaro Hirano CEO of Hitachi Con-
struction Machinery.
“I was also in India and the road
conditions there make the car shake
as you travel. Whenever I travel to
these countries I always speak to
the local government oficials. They
all mention that unless they improve
their infrastructure they cannot at-
tract foreign investment.
“Therefore, in countries such as In-
donesia, India or Thailand, they really
want to have eficient investments.
They aim to increase the eficiencyof their roads and infrastructures,
which represents a big business op-
portunity where our equipment is in
high demand.”
As the continent’s powerhouses,
Japan and China will be competing
for trillions of dollars-worth of infra-
structure contracts over the coming
years. And while Japan knows it may
not be able to compete with China in
terms of quantity, it is focusing on sell-
ing itself as a developer of high-quality
projects and an alternative to Chinese
infrastructure development.
In 2015, Prime Minister Shinzo Abe
pledged to invest $110 billion in “qual-
ity” infrastructure projects across Asia
over 5 years. In November, following
the meeting of U.S. President Donald
Trump and Mr. Abe, Japan once again
reiterated its commitment to invest in
“high-quality” infrastructure in Asia, in
partnership with the United States.
Japan believes that its projects may
initially cost more than China’s, but are
built to stand the test of time – requir-
ing less maintenance and repair andsubsequently making them cheaper in
the long term.
“Traditionally within ASEAN, the ini-
tial focus was on getting projects done
for the lowest amount of money,” says
Mr. Joichiro Momii, Director and Senior
Advisor of Fuji Furukawa Engineering
and Construction (FFEC), which engag-
es in the construction and maintenance
of power facilities and production
plants in the ASEAN region.
“Countries have been slowly realiz-
ing that such an approach is not a pos-
itive investment, as it does not produce
infrastructure that lasts. Therefore, we
are witnessing a shift towards develop-
ing high-quality infrastructure and that
is leveraging the potential for Japanese
companies to do well overseas within
the region.”
In Cambodia and Myanmar, FFEC is
offering overseas development assis-
tance for construction projects, show-
casing superior Japanese quality to two
of ASEAN’s least developed nations.
“The focus on knowledge trans-
fer is key to the success of Japanese
investment overseas. Furthermore,
being perceived as bearers of high-
quality projects further reinforces the
advantages of Japanese investment,”
adds Mr. Momii.
“For example, an international con-
struction company recently performed
a building infrastructure investment in
Cambodia, which turned out to be un-
successful. Having realized the quality
standard of Japanese work, they end-
ed up commissioning the construction
of a second local building project to
our company.”JAPAN INVESTS IN HIGH-QUALITY
INFRASTRUCTURE IN ASIA
The race to build
developing Asia has
begun. As China and
Japan battle for their share
of the trillions of dollars-
worth of infrastructure and
construction contracts
over the coming years,
the latter is pledging
to build “high-quality”
infrastructure that will
stand the test of time
Project Team: Antoine Azoulay (Country Director);
Aline Ouaknine (Project Director); Alexandre Marland
(Editorial Director); Fabrizio F. Farina (Regional Director of
Institutional Relations); Jonathan Meaney (Chief Editor)#TheWorldfolio
#JapanTheWorldfolioProduced by The Worldfolio.
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