The international situation is changing rapidly as the Trump administration takes office in the United States and the situation in Ukraine remains uncertain. “The international policy of the Ministry of Land, Infrastructure, Transport and Tourism must also move quickly,” said Yoshimichi Terada, Vice Minister of Land, Infrastructure, Transport and Tourism, who oversees international relations policies at the ministry. Competition with rival countries is increasing in overseas infrastructure projects, requiring a more strategic approach to sales. We asked about areas to focus on, taking into account the international situation and regional conditions, as well as the direction of support for construction companies expanding abroad.
Yoshimichi Terada
To expand infrastructure project exports, the government plans to revise the action plan of the Ministry of Land, Infrastructure, Transport and Tourism based on the "Overseas Infrastructure System Expansion Strategy 2030" decided in December 2024. "It is true that the overseas expansion of the Ministry of Land, Infrastructure, Transport and Tourism has produced results, but from now on we have to meet modern needs," he stressed. "We will change what needs to be changed. The important thing is to properly meet the needs of other countries," he said.
Japan-Ukraine Joint Public-Private Committee on Infrastructure Reconstruction (JUPITeR)
As a specific example, we have high hopes for the transit-oriented urban development (TOD) projects currently underway in Bangkok, Thailand and Jakarta, Indonesia. Focusing on the global trend of prioritizing GX/DX, the company will also explore the development of smart cities. “The desire to use private capital efficiently is a common idea in many countries,” he said, seeing this as an issue that needs to be addressed.
He also made his intentions clear when he said, "We not only want to build things but also attach importance to maintenance, management and operation afterwards. In that sense, we will also cooperate in creating systems and developing human resources in other countries." We will also focus on "water" and "logistics" as these are areas that are becoming increasingly important globally.
To meet the needs of other countries, “Japan also needs to be flexible,” he said, pointing out that Japan needs to make efforts to gain acceptance of its products in other countries, while also leveraging its strength in “high-quality infrastructure.” Citing the issue of costs as an example, he said, “We should be more aware of the level that other countries are aiming for and how efficient maintenance and operation are to achieve that.” We propose to proactively respond to infrastructure projects in a different form than that used in Japan.
While promoting infrastructure exports through public-private cooperation, he also intends to support construction and real estate companies, including small and medium-sized enterprises, to expand overseas. Just as the high level of technical expertise of Japan's small and medium-sized factories is attracting attention worldwide, he acknowledged that "there are also small and medium-sized enterprises in the construction industry with advanced know-how" and stressed that "the domestic market is quite mature, but overseas markets are attractive and have potential. It is important to support them so that they can use the know-how they have cultivated themselves."
“The first important thing is information sharing,” he points out, especially for smaller companies. Even if there is information about specific projects that could lead to overseas expansion, companies may hesitate to do so if the business environment and risk information in the host country is unclear. If trouble actually arises and they have to negotiate with the host government, or if they face institutional challenges in the country they are expanding to, companies may not have the financial strength to deal with the situation and they think “the government should support this.”
The Ministry of Land, Infrastructure, Transport and Tourism has established the Japan Association of Small and Medium-sized Construction Companies to Promote Overseas Expansion (JASMOC) and the Japan Overseas Real Estate Industry Public-Private Network (J-NORE) as a framework to share information on overseas expansion and provide support measures, and we are widely promoting the usefulness of these organizations. The two organizations hope to share many examples of overseas expansion with their members and are committed to ensuring a comprehensive support system, saying, "We do not want to make it difficult for small companies to expand overseas."
Terada cites TOD, a model of integrating public transport development such as train stations with urban development, as one of the Japanese infrastructure systems that is gaining popularity around the world. This will be effective for urban development that takes advantage of population density and we believe this is of great interest in Southeast Asia and South Asia as well as in the Global South (emerging and developing countries).
There are cases where the construction of Japanese-style subway systems has led to comfortable train travel, and countries exporting infrastructure often say that "society has changed thanks to Japan". We also intend to contribute to improving the living environment in these areas.
One of the quickest responses to the international situation was the movement towards the reconstruction of post-war Ukraine. In January, the founding meeting of the Japan-Ukraine Public-Private Council on Land, Infrastructure, Transport and Tourism Reconstruction (JUPITeR) was held. On behalf of Ukraine, Deputy Prime Minister for Reconstruction and Minister of Regional and Territorial Development Oleksiy Kuleba participated online and expressed the hope that "Japanese private companies will be a strong driver of change by providing innovative solutions, technologies, resources and expertise in implementing large-scale projects" (photo).
About 100 private companies participated in the founding meeting. The council will continue to accept applications from companies and organizations. “The public and private sectors will work together to solve this problem,” said Terada of the National Transport Council.
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