Political risks	Risk of political violence	- Riots, civil war, revolution, terrorism, labor strikes, and more.
Risk of expropriation	- Assets are nationalized without appropriate compensation.
Risk that the government of the partner country breaches its obligations	- The government of the host country or governmental bodies as the contractual counterparty breaches the contract in question.
System (change) risks	- Legal system is underdeveloped or does not function adequately.
- Legal system undergoes changes before the project is completed.
Commercial risks	Funding risk	- Expected amounts of funds cannot be procured when needed under the expected conditions.
Completion risk	- Facilities are not completed in the expected period, under the expected budget, or in accordance with the expected level of performance.
Operating risk	- The managerial capabilities or skills of the operating company are inadequate.
Demand risk	- Sufficient demand at the expected price cannot be secured.
Natural disaster risks	Earthquakes, typhoons, fires, and more	- Affected by natural disasters.

(Fierce international competition in the infrastructure market)

International competition over the soaring global demand for infrastructure is exceedingly fierce. For example, if we look at sales figures posted by rail car manufacturers around the world, we see that, thanks to soaring domestic demand, a superior cost-competitive edge, and an effective foreign policy in China, Chinese enterprises are presently crushing European companies (“Big 3”) that have long dominated the market (Figure 3-1-5).

## (2) Overseas development of quality infrastructure

The biggest advantage offered by Japanese infrastructure is quality. As captured by the traditional proverb in Japan that can be translated into “penny-wise and pound-foolish”, there is a willingness in this country to choose items that are easier to use, last longer, and are of good quality even at the cost of paying a little more for such items.

In May 2015, Prime Minister Abe introduced Partnership for Quality Infrastructure in Japan. In November of the same year, an expansion of a program to accelerate procedures for further acceleration of Japanese ODA loans to facilitate quality infrastructure investments was announced. In these and other ways, the government is spearheading the promotion of quality infrastructure investments.

Japanese concepts of ‘quality’ in the overseas development of infrastructure is embodied in the ease of use, longevity, and low lifecycle costs of infrastructure, in adherence to deadlines, in the consideration paid to environmental and disaster-prevention concerns, and in other values. In addition, superior technological strengths as seen in structural elements combined with efforts concerning non-structural elements, such as the establishment of systems and the provision of support for the development of human resources, also contribute to the enhancement of quality. In accelerating the process of supporting the provision of ODA loans to partner countries, competitiveness is reinforced through the expansion of systems pertaining to the aforementioned quality infrastructure partnerships.

The promotion of quality infrastructure investments that harness Japanese strengths is not only linked to the stimulation of the Japanese economy when Japanese companies receive new orders for infrastructure systems from overseas clients but also significant for promoting the development of infrastructure that is easy to use and long-lasting for our partner countries. For this reason, it is important that Japan continues to engage further in such efforts.