KUALA LUMPUR • Prime Minister Shinzo Abe is beefing up Japan's role as a provider of infrastructure and finance in Asia just as the Chinese-backed Asian Infrastructure Investment Bank (AIIB) prepares to make its first loans.
Japan aims to halve the time it takes to get a development loan and make it easier to obtain funds, Mr Abe told business leaders yesterday on the sidelines of an Asean meeting in Kuala Lumpur. He reiterated that Japan and the Asian Development Bank (ADB) - which the country backs - would seek to provide US$110 billion (S$155.3 billion) of infrastructure funding in Asia over the next five years.
Mr Abe's push coincides with preparations by China to soon open the coffers of the AIIB, a US$100 billion multilateral development bank. Like its United States ally, Japan declined to join the AIIB even as the countries, including Britain, France, Australia and Germany, signed up to become founding members.
Japan and China are vying to bolster their political influence in Asia by becoming the infrastructure providers of choice. There is plenty of demand, according to Mr Abe, who estimated it could rise to as much as 100 trillion yen (S$1.15 trillion) a year.
While China is a member of the ADB, Japan and the US are the biggest shareholders, and the institution's chiefs since it was founded in 1966 have been Japanese.
Mr Abe's vision is to enhance Japan's role as an infrastructure provider by playing on the perception of quality and safety associated with most Japanese engineering.
"The pursuit of short-term profits through only sales without support is not the way Japan conducts itself," he said.
"We will also not spare any effort to share Japan's sophisticated technologies or know-how, or the reliability of 'Made in Japan'."
ADB president Takehiko Nakao said earlier this month that the Manila-based lender is in talks with the AIIB to jointly finance projects in the region next spring. The ADB said in May it would boost its total annual lending and grant approvals by 50 per cent to as much as US$20 billion.
To help give Japan an edge, the country aims to cut the time it takes to get a loan from three years to between 18 months and two years, and end its practice of requiring government guarantees for each loan.
Yesterday, Mr Nakao announced in a statement a five- year US$16 billion ADB-Japan "partnership", including an investment fund, to support "sustainable" infrastructure development in the region.
The first activity would be the establishment of a trust fund by March next year, to be capitalised with US$1.5 billion from the Ja- pan International Cooperation Agency.
It was not immediately known if the trust fund was part of the quality infrastructure programme pushed by Mr Abe.