Japan’s Prime Minister Shinzo Abe arrives at a session of the 27th Association of Southeast Asian Nations Summit in Kuala Lumpur. Japan aims to halve the time it takes to get a development loan and make it easier to obtain funds, Abe told business leaders yesterday.

Bloomberg
Kuala Lumpur

Japan’s 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 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, Abe told business leaders yesterday on the sidelines of an Association of Southeast Asian Nations meeting in Kuala Lumpur. He reiterated that Japan and the Asian Development Bank – which the country backs – would seek to provide $110bn of infrastructure funding in Asia over the next five years.
Abe’s push coincides with preparations by China to soon open the coffers of the AIIB, a $100bn multilateral development bank. Like its US ally, Japan declined to join the AIIB even as the countries including the UK, 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 Abe, who estimated it could rise to as much as ¥100tn ($814bn) 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.
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 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% to as much as $20bn.
China won the rights to build a $5.5bn railway line in Indonesia last month. This week Japan agreed to lend the Philippines $2bn for a rail project, the biggest expenditure of its kind between the two nations. 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.
While Abe burnished his lending credentials, US President Barack Obama touted the benefits of the Trans-Pacific Partnership, a 12-nation trade deal that is the centerpiece of his self-proclaimed economic and security re-balancing to the region. China isn’t a member of the pact, which covers about 40% of the global economy.
“Countries are more integrated than ever,” Obama told the business leaders immediately before Abe spoke. “The answer is to do trade the right way. That’s what TPP is. A win for all of our countries.”