Cooperation between the Government and the Private Sector Based on Clear-cut Division of Roles

Naohiko Kumagai Vice Chairman, Keidanren Chairman and Executive Director, Mitsui & Co., Ltd.

Toward the realization of a smaller government, opportunities are increasing for cooperation between the government and private sector in the form of utilizing wisdom, know-know, and funds in non-governmental areas, even in fields where the government has been in charge.

In activities for infrastructure suitable for PFI (Private Finance Initiative) , which carries out reinforcement of social capital under the initiative of the private sector, and BOO (Build, Own and Operate) projects such as power stations, waterworks, and sewerage abroad, more efficient construction and operation have become available. The Economic Strategy Council and the Industrial Competitiveness Commission, unlike deliberative councils of the conventional type, are expected to establish more effective policy-making through adoption of the opinions and requirements of economic circles. In international arenas for rule-making or mutual consultation as well, official assimilation of business opinions has already been implemented in the shape of non-governmental organs of consultative status, such as BIAC to OECD or ABAC to APEC. Regarding WTO, Keidanren equally proposes to have industry's views reflected more positively in the government. Trade negotiations, though they are actually dealt with among governments, are thought to need close collaboration between the government and private sector, if only for maintaining effective negotiations with good timing, because those involved in economic activities, such as international trade and investments, are private organizations.

Cooperation between the government and the private sector will expand hereafter in various areas, with PFI as the most important. We ought to cooperate as best we can for activating the economy. In doing so, above all, clarity of the division of roles should be kept in mind. If this is unclear, inefficiencies will result. It is also important to maintain a crisp and harmonious relationship between the two sectors. In infrastructure projects utilizing private initiative like PFI, promotion is difficult to carry out without government support, but private organizations on their part must not forget the principle of independence, self-help, and self-responsibility. The government on its part should not force on the private sector what the government should properly do of its own responsibility. Furthermore, as a measure to ensure that government-private cooperation be implemented equitably, it is essential to secure transparency.