The goal of infrastructure investment is to provide the bases for prosperous and comfortable lives. In the 21st century, the needs for a beautiful natural environment, a comfortable and safe life, and individual cultural circumstance will increase, and infrastructures to match these needs will be more important.
However, during the past decade, although large public works have been carried out continuously to help out an end to the economic recession that followed the bubble economy, local economies remain impoverished, and infrastructures in urban areas are getting obsolete. In fact, inefficient public works are carried out only to stimulate the economy temporarily.
Today, from a global perspective, it is doubted that Japan is an attractive country in Asia for investors. The repeated issuing of Japanese government bonds resulted in the expansion of Japan's fiscal deficits. Japan may not pass the financial burden to the future generations, considering the change in the population structure and the decline in its potential growth rate. Local governments have difficulties in securing sufficient budgets for achieving new policies because their finances are getting worse rapidly due to the economic slump.
These basic strategies are supposed to change the centralized public work system into a dispersed one. It will support independence of local governments and clarify their responsibility to increase the efficiency of each public works. Additionally, three conditions should be considered in the basic strategies.
The Economic Strategy Council recommends that the government regard the coming decade as a period of focusing intensive investment and public work reform, and that the government initiate new policies to convert public investments into ones that match new needs and to conduct efficient public works.
I. The Basic Strategy of Developing Future Infrastructure
1. Cross-ministry Infrastructure Development Plan and Regional Revival PlansTo revitalize impoverished local economies and to utilize the accumulated industrial resources, governments should decide strategically important areas to be engines of economic revival. New decision-making processes should also be established.
1) The government should inaugurate an "Information Internet Committee" and an "Environment Recycling Committee" that report directly to the prime minister. These committees should be comprised of Japanese and foreign experts.
2) Wide-area regional strategy committees, which consist of the national government, local governments, and private companies, should be created in every wide regional area. The committees will decide the priority of public investment and make basic development plans. Public works that contribute to the revival of local economics by enhancing physical distribution and human distribution, for example, information communication networks, and airport and port systems, should be chosen.
3) Concrete changes across public work areas such as budget shifts from agricultural, forestry and fisheries industries to environmental efforts should be considered, based on local needs.
4) To secure the implementation of the policies above, the shares of public work between ministries at the national level and long-term plans of public works should be reexamined.
2. Reforming Local Governments To Increase the Efficiency of Public WorksUnnecessary public works such as low-utilization buildings should be corrected to prepare for the coming aged society. Public works should be allocated on networked infrastructure to collaborate with other areas, and on ones that match emerging social needs, for example barrier-free facilities.
1) The government should stop supporting measures for building investment by a single local government. New public works should be undertaken for larger areas.
2) The government should reexamine the historical roles of regional promotion laws and consider their future.
3) To prevent unreasonable emphasis on dividing work into small pieces to support small and medium-sized companies, governments should reexamine the ordering procedure of public works. The "Uwauke"--a public works ordering system in which small and medium-sized companies receive an order and place the order to large companies--should be corrected.
4) The governments should reevaluate the effectiveness of long-term public works, and use the results for feedback for ongoing parts of public works.
5) The governments need to change objects of public works flexibly to provide public works that match emerging social needs such as barrier-free facilities in urban areas.
3. Active Introduction of Private-Sector DynamismBoth strategic infrastructure and drastic deregulation are necessary in the 21st century. For example, in information infrastructure, both deregulation to promote new entrance into the industry and the construction of fiber optics are needed. Moreover, in the environmental industry, construction of sewer systems, recycling systems, and waste disposal systems, along with making clear rules of emission and deregulation, are needed.
(1) In construction of roads, rivers, land improvement, airports and harbor facilities, as a rule, the governments should take cost-benefit analysis and announce the results. They also should evaluate every public works after its construction, and announce it.
(2) To introduce technological evaluation and comprehensive evaluation, the government should simplify contact procedures with the Ministry of Finance. They also need to change the bid system based on the Local Autonomy Law.
(3) To diversify the bid system, every wide-area region should have an evaluating organization for technology and management.
(4) The governments needs to introduce a "Value Engineering" method that evaluates not only price but also technology, and a "Design Build" method to enable the same company to do designing and construction.
(5) The governments should aggressively introduce PFI to stimulate investment by the private sector.
(6) Considering that third-sector enterprises went bankrupt because the public sector took the risk of their business, the government should allow a PFI framework only for businesses led by the private sector with contracts that clarify the roles and responsibilities of both the private and public sectors.
(7) Public facilities should be used not only for their original purpose but also for other purposes. The government should flexibly change the act for normalization of grants to promote more effective usage of public facilities.
II. Strategic ProjectsUnder the principles mentioned above, the governments should reform development planning system, and build infrastructure strategically on the following areas.
1. Improvement of urban lives and raising global competitiveness of Japanese cities.Cities in Japan are facing the problems such as decline of local city areas and decline of international competitiveness of large cities. However the government should see this crisis as an excellent opportunity to build and to restructure high-quality cities. Improvement of urban infrastructure aimed at doubling space for life and making urban life more safe and comfortable should be taken.
(1) The government needs to understand the importance of urban development, and to work out urban development plans as national projects.
(2) The government should improve the weak city conditions for earthquakes and other disasters
(3) Commuting time should be shortened, and a more comfortable urban life achieved.
- Changing at least half of congested areas in urban cities into unburnable structures in ten years.
- Improvement of the earthquake-resistant standards and expansion of aids for earthquake-resistant structures.
- Expansion of refugee parks and clearing of areas where flooding is common.
(4) The governments should promote pilot projects for future cities.
- Promoting the building of houses close to business areas to shorten commuting time.
- Increasing transportation capacity of railroads by new line construction, a four- track line, lengthening trains, and increasing the number of trains, to lessen train congestion.
- Promoting a "park and ride" system to organically use roads, railroads, and ports.
- Designating areas and executing comprehensive transportation works by cross-ministry taskforce.
(5) 24 Hour international access to be reinforced.
- Establishment of inspection committees to examine the qualification of projects. In this qualification, the committee should consider not only the standards by urban development law and architecture basic law but also ideal conditions for the area.
- Enabling to build super capacity and super high-rise building by flexible applying the condition.
- Enacting new comprehensive laws and amend laws to help these projects proceed.
- Expanding the function of Narita Airport and extending operating hours, such as 24 hour operation at Haneda airport.
- Enhancing the capacity of congested airports including Haneda, and proceeding with the "Plan for a third airport in the Tokyo metropolitan area" in the line of "Seventh Airport Development Seven-year Plan."
- Maintaining automobile road networks to connect airports and business areas, as well as the roads designated by city planning.
- Promoting construction of underground cables and common cable boxes to improve landscape and to utilize underground space.
2. Strategic Information Infrastructure Focusing on the InternetInformation infrastructure in the 21st century seems to be developing with an increasing focus on the Internet. The Internet furthers information disclosure by the government and the private sector, and shortens the time and distance between individuals and areas, and plays a important role in developing a society based on freedom.
(1) The government should proceed with deregulation to enhance the Internet businesses
(2) Information superhighway running across Japan
- The classification between Type 1 telecommunications business and Type 2 telecommunications business should be abolished in the Internet-related businesses except for telephony. The current procedures, approval, registration, and prior notification should be changed into ex post facto notification.
At the same time, the government needs to take actions to protect consumers based on responsibility and choice.
1) Inaugurating third-party organizations to inspect the quality of services provided by telecommunications business carriers, and obliging them to make their results public.
2) Examining measures to cope with telecommunications business carrier's bankruptcy such as establishing organizations that temporarily own, mediate, and transfer business carriers' equipment and customers' IP addresses.
- Intensifying the price competition by deregulation to make it possible to set discount rates for specific areas and customers freely. (introduction of Dynamic Pricing)
- Pushing forward the start of self-owned networks of public sectors and private companies to third parties.
(3) The government should promote CATV Internet, Community LAN, and Digital Subscriber Lines to realize flat rates for the Internet usage.
- Promoting simultaneous construction of fiber optics cables with the construction of other infrastructure such as roads, livers, and sewer systems to reduce the time and costs of construction. Connecting these fiber optics cables organically, and building housing boxes to place telecommunications carrier equipment to realize a Peta-level Information superhighway running across Japan.
- Allowing not only to current Type 1 telecommunications business carriers but also all carriers to use the Information superhighway mentioned above. Employing a private-public joint build method to greatly reduce the cost and time of constructing fiber optics.
- Allowing public organizations including local governments to construct fiber optics cable on condition that they transfer the cables to private companies later to promote new entry by small- medium sized businesses and venture businesses.
(4) The governments should promote Local PetaNet model projects and build a Pan-Pacific PetaNet.
- Measures to support for developing CATV Internet, Community LAN in apartment houses, small districts and public housing, and changing the agricultural telephone networks into the Internet.
- Creating subsidies for equipment to encourage dominant local carriers to apply xDSL, for setting targets, and for obliging the carriers to provide xDSL at reasonable prices.
(5) The government should become an electric government.
- Carrying out Local PetaNet model projects in cooperation with the national government, local governments, and private companies.
- Building a Pan-pacific Peta-level network in cooperation with other countries.
(6) The government should support developing the next generation transportation system
- Disclosing all laws and ordinances and statistics on the government's Web sites. Promoting electric applications and making electric procedures regarding national revenue and expenditures possible.
- Connecting the central governments and local governments with peta- level high speed networks to realize an electric government. In doing so, the governments need to introduce cutting-edge technologies such as IPver6 and dispersed computing technology by outsourcing to the private sector.
(7) Development of information apparatus for elderly and disabled people should be enhanced.
- Equipping superhighways with ETC (Electric Toll Collection)
- Developing Smartway for automatic driving systems.
- Developing the standardized system of ITS to obtain global de facto standards.
- Allowing private companies to use traffic information time tables.
(8) Both government and the private sector should take all actions, including disclosure and risk management plans and organizations to deal with the "Y2K" problem.
3. Creating Environmental Businesses and Building Recycling SocietyThe government should support the "vein" industry that is responsible for disposal systems and recycling systems to balance economic development and environmental preservation, and institute a public-private joint framework for developing environmental businesses as engines of growth for the next generation.
(1) The governments should promote renewal and reconstruction investment in general waste disposal facilities, industrial waste disposal facilities, and new construction of recycling facilities.
(2) With PFI, the government should build hybrid waste disposal facilities and recycling facilities in large designated industrial areas in coastal business areas and local cities.
(3) The government should proceed with deregulation to promote new entry into the waste disposal industry. It will contribute to the establishment of effective disposal and recycling systems.
(4) Information about costs and management of local public organizations should be disclosed. The sewer system should be improved as soon as possible.
(5) Governments should make clear environmental rules on air pollution, soil pollution dioxin, etc. They should tighten environmental regulation and clarify responsibility for emission.
(6) Japan needs to establish an international ecology right exchange in Japan for the purpose of becoming the center of environmental business in Asia.
4. Public-Private Collaboration Frameworks and Fostering New Talent21st-century type public-private collaboration frameworks that will utilize funds, human resources, know-how owned by universities, public research institutes, and private companies should be created. In local areas, governments need to open national universities to the public and to build R&D centers and venture capital offices at those universities to bring about synergy between the public and private sectors.
(1) The government should open national and public universities for public use and private use, and establish public-private collaboration centers at those universities. They are supposed to be built and operated with PFI. The centers need to be equipped with R&D centers and venture capital offices.
(2) In reforming local R&D institutes such as industrial technology centers, the local governments should consider a location close to the collaboration center on campus to gather research resources.
(3) To activate research activities rooted in local areas, universities should be allowed to establish a fund to accumulate patent fees and donations, and have a free hand to operate the fund.
(4) For primary school education, the Internet access should be improved dramatically. The government should make efforts to connect all schools with high-speed networks (for example 10 Mbps) and to build LAN in all schools and classrooms by 2001.
(5) Governments should expand the qualification of special purpose teachers to make it possible to outsource computer education and foreign language education.
5. Creating Towns to Prepare for Rapid Population AgingGovernments should construct public spaces where the elderly can walk comfortably. A political shift from "uniform minimum welfare" to "diverse welfare by the private sector" is needed.
(1) Three-dimensional design should be introduced for railway stations , bus terminals, and city areas. It would enable pedestrians to walk without walking up and down.
(2) The government should promote building railway stations , department stores and hospitals etc. with barrier-free facilities.
(3) The government should enhance the private sector's new entrance into welfare, and apply contract welfare to provide diverse welfare services.
(4) Public multipurpose space for welfare use around public spaces such as railway stations should be set up and opened to private use.
(5) Governments should aid the private sector's construction of barrier-free residence and rental homes for the elderly.
6. Initiating New Housing PolicyA new housing policy should focus on middle-aged people housing and the supply of tolerable and high-quality housing. Current changes in the housing tax structure is supposed to expand investment in housing, but more measures are needed to enhance high-quality and diverse residences. Improving the quality of houses to stimulate home-related businesses that expand consumption such as information, environment and energy is crucial.
(1) The government should formulate new housing policies to deal with the diverse life styles of people: activation of fixed-term land use rights, and establishing fixed-term tenant rights to enrich the rental and used market for houses and apartments.
(2) The governments should promote improvement of housing durability by performance disclosure, performance guarantees, and maintenance records of houses to increase consumer benefits.
(3) To raise housing value, the government should establish a neutral organization to evaluate the value of buildings.
(4) As measures for aging population, rental houses for the purpose of taking care of aged people and reverse mortgages should be enhanced.
7. Developing Attractive Spots in Japan and Sending Messages to the WorldJapan should create world-class residences for sightseeing and business to stimulate international tourism and mobility by utilizing the country's beautiful towns and landscapes. Expanding attractive spots results in Japan's prosperity with people from all over the world.
(1) Japan must build tourist resorts that attract vacationers from all over the world.
(2) Infrastructure for sending information about tourism and business should be maintained.
(3) Japanese unique cultural facilities such as shrines, temples, and other historical spots should be maintained to be attractive tourism spots.
(4) The governments need to support local movements such as "Machi-tukuri" company and NPOs to develop diverse exchange spots.