Action 64. Contribute to the World through the Water Business!

“Water is the most valuable resource in the world.” That is a line from a 007 James Bond movie but right now around the world, battles are raging over water resources. In China, some 1,000 lakes have disappeared in the last five decades. In Russia, the Aral Sea, once the world’s fourth largest lake, is disappearing. Japan cannot be indifferent to these developments as an increasing number of Chinese and other foreign companies are purchasing forests in Japan for their water resources. Japan should address water issues as a national policy priority.
 
1. Conserve Forests to Secure Water Resources!
Japan’s water boasts the world’s highest level of safety and taste, but the country does not have an abundance of water resources. On a per capita basis, we only have around half the global average. Forests are where water resources originate. We must recognize forests as a national public infrastructure as important as arterial roads and power plants. The actual situation, however, is that as a result of prolonged stagnation in the forestry industry, forests have not been fully protected – some have been sold to foreign investors at unreasonably low prices and some have been abandoned and left desolate.
 
The impact of the abandonment of tree planting may not surface until several decades from now, when global competition for water becomes intense. With regard to important water-conserving forests, it is necessary to offer strong incentives to promote reforestation. The best way to do this is to find ways to produce economic value by restoring Japanese forestry through tree planting.
 
2. Create Regulations on Exporting Water Resources and Using Groundwater!
The Forest Act does not contain any provisions regulating the purchase and sale of privately owned forests. It is therefore possible for private forest owners to sell their forested land freely. In addition, because there are not sufficient rules regarding the withdrawal of groundwater, private forest owners are legally allowed to withdraw groundwater in any amount. It is said that on average it takes 1,400 years for groundwater to renew. The uncontrolled management of water resources without any regulation of the purchase and sale of forested lands or withdrawal of groundwater should be rectified.
 
3. Promote Private Sector Access to Water and Sewage Business and Promote Improvement in Management Efficiency and Enlargement of Scale to Develop Japanese “Water Majors”!
Water markets in different countries have been conquered by multinational companies referred to as “water majors,” such as Veolia of France. This is because in France and the U.K. private companies have long been given access to water projects under the concession method, and private water treatment companies developed under this system have successfully expanded globally based on their established technology and expertise.
 
Singapore has followed suit. Singapore has long been dependent on the import of water from adjacent Malaysia but has engaged in other options as part of its national policy, including investment in seawater desalination projects and wastewater recycling plants. Based on technology acquired through these projects, the water business of Singapore is being expanded to China, the Middle East, and North Africa.
 
In Japan, if all domestic water projects are opened up to the private sector, domestic companies can grow significantly and improve their management and operation abilities and technological capacity. It will then become possible for them to grow into major players in the water industry. The Tokyo Metropolitan Government Bureau of Waterworks and water departments of other large cities have high technological capacity and excellent quality control. Their business infrastructure is also favorable. If water projects of these municipal water departments are privatized so that they are free to take on contracts to operate the waterworks of other municipal governments, it would be possible for them to grow into Japanese “water majors.”
 
4. Enter Competitions to Win Overseas Markets As a National Strategy!
Global demand for the maintenance, operation, and management of water and sewage facilities is expected to continue to increase significantly into the future to become a market worth around 80 trillion yen in 2025. France has supported its water majors to enter the global water business as a matter of national policy, such as through promoting the international standardization of specifications beneficial to French companies. Japan should also help water majors that develop out of the domestic market to enter overseas markets as part of its national strategy.

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