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Where is my infrastructure?

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Tokyo’s airports are puzzling.  Its number 1 airport at Narita is nothing compared with those in Hong Kong or Singapore.  It is certainly nothing compared with Beijing's new airport!  And Tokyo’s Haneda airport looks almost third world. 


How is this possible?  After all, the Japanese government has undertaken massive infrastructure investment for the past two decades in an attempt to stoke up the economy.  And almost every little town has its own shiny, new airport.  Indeed, just this week, Japan will inaugurate its 98th airport, at Ibaraki, northeast of Tokyo.  One little bit of turbulence is that it only has one flight a day, to Seoul.  But it is not obvious that any Korean would wish to visit Ibaraki.  The airport cost about $220 million, and is set to make losses.  Both Japan Airlines and ANA have declined the opportunity to service this airport. 

This is the story of Japan’s infrastructure madness.

In the early days of its post-war development, Japan simply dazzled the world with its outstanding infrastructure.  Its bullet train, the “Shinkansen”, was an early symbol of Japan’s technological prowess and high quality infrastructure.  It relies on tunnels and viaducts to navigate its way through, rather than around, Japan’s mountainous landscape.  Japan was very far sighted in its railway investments, at a time when the US and other countries were investing in highways and airplanes.  The Shinkansen inspired high speed trains the world over, and its technology has been exported to many countries. 

The 1964 Tokyo Olympic Games were in many ways Japan’s coming out ceremony, with its impressive infrastructure on show for the world to see.  The Tokaido Shinkansen, the fastest train in the world, was completed in time for the Olympics, along with multiple train and subway lines, and a large highway building project.  And the Haneda International Airport and the Port of Tokyo were both modernized.  International satellite broadcasting was initiated, and Japan was connected to the world with a new undersea communications cable.

According to most economists, up until the 1980s, Japan’s investments in infrastructure contributed greatly to economic growth.  But following the bursting of the bubble some twenty years ago, infrastructure took on another objective – creating jobs and business in the face of economic weakness.  Infrastructure spending also became the vote buying machine of the Liberal Democratic Party (LDP) which was in power for over 50 years.  Construction companies and local politicians all benefited from this wasteful expenditure which had very little return for the economy.

Alex Kerr has nicely documented the tragedy of Japan’s infrastructure madness – “the native forest cover has been clear-cut and replaced by industrial cedar, rivers have been dammed and the seashore lined with cement, hills have been leveled to provide gravel fill for bays and harbours, mountains are honeycombed with destructive and useless roads, and rural villages have been submerged in a sea of industrial waste.

Japan’s infrastructure madness has had many pernicious effects.  National savings wasted.  Public debt is now massive.  Cosy and corrupt linkages were fostered between construction companies, bureaucrats and politicians.  Enormous environmental damage created.  Public budgetary governance has worsened through the use of “special accounts”.   One of the problems of the bankrupt Japan Airlines is that it has had to service uneconomic flights to useless airports.

More fundamentally, infrastructure spending has been the way that Japan has avoided facing up to reality, the reality that it needs to change to a new, modern world.  The Democratic Party of Japan, which was elected last August, wants to break these ties between the government and the construction industry.  But these ties run so deep that it will take a long while to change, especially since the DPJ has so many other problems on its hands. 

There is talk that Ibaraki may yet succeed thanks to low cost airlines that could take advantage of its low costs.  But, then again, that may be just wishful thinking.


Dogs and Demons: The Fall of Modern Japan, by Alex Kerr.