[talk] The Reform of the Highway Public Corporation should be Included in Japan’s Future Designs

Tokunosuke Hasegawa: Professor, Meikai University

Born in 1936, he received his BA in Law from Touhoku University and worked in the Ministry of Construction and the Research Institute of Construction and Economy as executive director until assuming his current position in 1995. Hasegawa researched an international comparison of "mortgage financing crises in 1980s and 1990s" as a visiting scholar in the Department of Land Economy at University of Cambridge. His main publications include: "Tokyo no takuchi keisei-shi," "Fudousan kinnyuu-kiki saigo no shohousen" and many other books.

Yoshitsugu Hayashi: Professor, the graduate School of Engineering of Nagoya University

He is an expert of sustainable transport and special development. He works as a member of government councils, editors of international, journals and received numerous awards. His published works include "The Environment and Transport" and "Global Environment and Metropolises".

Akihiko Matsutani: Professor of the National Graduate Institute for Policy Studies

He joined Ministry of Finance of Japan in 1970, worked as a director of the Research division of the Budget bureau, a Budget Examiner and Director general of Yokohama customs and retired when he was a Concilor of the Minister's Secretariat. His specialities are Macro Economics and Public Finance. His published works include "JInkou Gensyou Syakai no Sekkei"Social plannnig in declining population)" and "Shakai Shihon no Mirai(the Future of social infrastructure)". He received his B.A. in Economics in 1969 and Business Administration in 1970 from the University of Tokyo.

Yoshinori Yokoyama: Director of McKinsey & Company

Yoshinori Yokoyama is a former director of McKinsey & Company. He now serves as a part-time instructor at Tohoku University and the graduate school of Hitotsubashi University. His published works include Seicho Soshutsu Kakumei (Growth Creation Revolution), McKinsey Gassho Renko Senryaku (McKinsey's Alliance Strategy), and many translations and reports. Mr. Yokoyama graduated from the Architectural Department at the Engineering Department of Tokyo University in 1966, worked for a Architectural Farm and received a Master of Urban Design degree from the Graduate School of Harvard University in 1972 and an MBA from the Massachusetts Institute of Technology in 1975.

Mr. Yokoyama points out that the problems of the Highway Public Corporation arose because the construction of roads continued at the same pace and there was no further economic rationale for such new highways even after the organization of infrastructure to support basic living levels twenty years ago and the achievement of a civil minimum. Mr. Hayashi states that the system of fiscal investment and lending no longer fit the current era, which had functioned during Japan’s developing years. He also showed his view that the careless usage of land left problems for road administration to wrap up.

What is the approach for the reform? Mr. Matsutani emphasizes that the debate on highways should be handled from a medium to long-term viewpoint with careful analysis of Japanese social and economic trends where the population is declining and experiencing an “aging society” with the increase of senior citizens. Mr. Hasegawa states that debates on where road issues should be placed in a total picture including the administrative and fiscal reforms and various public works, and priorities should be discussed among them.

However, there is the pressing issue of what to do about the enormous debt incurred by the Japan Highway Public Corporation. On this point, there was an agreement of opinion that the burden to the Japanese people was unavoidable. Taking the low growth of the economy into consideration, Mr. Hayashi states, “we should not leave the debt to be paid by the next generation”. This is the view that we should stop new highway construction, and further, freeze highways construction of which the work has already been started not only because construction costs but also maintenance management costs will be incurred.

They also agreed that there should be a transfer of authority and budgets to regional governments. The debates in the Governors’ Conferences which demand highway construction are based on “the idea that highways can be built with other people’s money”, according to Mr. Matsutani. Their thinking is to stop policy determination by the national authorities, and to give wide ranging budgeting authority to the regions for highways, railways and welfare, etc. in return for the regions selecting such policies under its own responsibility and bearing the fair share of the costs.

Concerning privatization, careful arguments were prevalent. Mr. Hasegawa questioned about the debates in the government Privatization Committee, in which he can not find a difference from the issues of existing third sector arguments. Mr. Yokoyama and Mr. Matsutani were of the opinion that in redesigning the public corporations, it was necessary to separate the portions that should be privatized and those that should not.