Chapter 4. New Development of International Transport and Tourism


4. 1 Changes in the Environment for International Transport


   Various environmental factors of international transport for Japan are undergoing drastic changes such as accentuated growth of those areas requiring adjustment of the respective interests of well developed and developing nations in addition to changes taking place structurally in the international transport marketplace.
   Particularly, developments in developing nations (areas) of the Far East such as the Republic of Korea, Taiwan, Hongkong and Singapore which continue at a rate of high growth with cheap labor, intesified adoption of technology, and low customs tariffs, are influencing Japan in many different ways.
   First of all, in the shipping field the growth of the maritime cargo traffic of four nations (areas) shows a far larger figure than the growth of Japan and their exports to the U.S. from 1975 to 1980 has grown 3.2 times to reach a level equal to 57% of Japan exports to the US (Fig. 7).
   Airline transport volume in 1982 showed Singapore and the Republic of Korea in 7th and 8th place respectively, so that the sum of these two countries (6.2%) and Japan (6.4%) indicated just about equal shares. In the field of shipbuilding, the total number of ships built in the Republic of Korea has been second only to Japan since 1981, and continues to grow. In the interchange of people, the total number of persons arriving in Japan from these countries (areas) from 1975 to 1983, for example, increased by 360%, and their ties with us continue to grow in importance.


4. 2 The Measures Taken by Japan to Cope with the Changes in International Environment


   In order to accomodate these changes in international environmental conditions along with expending efforts to fortify the management foundations of our international transport enterprises, the maintaining of international competitiveness together with the necessity of promoting the formulation of international multimodal transport systems, has prompted the following measures in the various divisions engaged in international transport.
(1) Ocean-going shipping
   @ Coping with changes in the order of shipping
   The international order of shipping is based upon "the principles of freedom of shipping" but in recent years, measures by developing nations to favor vessels of their own nationality, the coming into effect of convention on a Code of Conduct for Liner Conference, etc., point to the birth of new developments.
   With respect to such north-south problem, we are keeping in close touch with developed countries, and utilizing every opportunity to confer with developing nations in order to provide a wide range of measures to properly cope with new developments.
   On the other hand, a new shipping Act was passed in June 1984 in the US to rebuild their shipping. This new Act includes certain provisions which are welcomed by Japan but until we see how the Act is actually going to be administered, it is difficult to give a proper assessment of the consequences. It is therefore important that necessary steps be taken to provide for the developing situation since this Act was passed.
   The functions of the liner conference agreements along major shipping routes have recently been deteriorating and in Japanese shipping companies, the drastic study of operating provisions including space charter, marine vessel classification and composition of fleets of vessels, together with the operation of intermediary liners, should all be reviewed in detail.
   A The future of oceangoing shipping
   With a deterioration of international competitiveness in recent years, there is a marked decline in the loading share by Japanese merchant fleet in our foreign trade and especially the decline in the percentage of Japanese vessels has been continuing very steadily ever since 1970. In 1970 our merchant fleet was composed of 75% Japanese vessels. This, however, decreased to 56% in 1982 (Fig. 8). Furthermore, in our oceangoing shipping, rapid changes in international shipping environment, distinctive changes both in volume and quality of ocean cargo being transported, problems with seamen, and worsening of profit earning potential for the shipping, were all very distinct problems being faced.
   Due to these unfavorable circumstances, in August 1984, the Council for Rationalization of Shipping and Shipbuilding Industries 'submitted a report on the "Future Policies for the Oceangoing Shipping".
   This report emphasized the need for a reduction in the number of Japanese crews, the increase of intensive training programs to build a limited number of highly professional and efficient crews, the further modernization of vessels in the merchant fleet and the chartering of low-cost foreign vessels, expending the relaxation of restrictive measures which tend to inhibit the enterprising spirit of our merchant fleet, and finally to establish a firm basis for the management of shipping which can weather the stiff trials of international competition.
(2) Shipbuilding
   Japanese shipbuilding industry in 1983 built 42% of the total tonnage built around the world; the other shipbuilding nations of Europe only accounted for 28%. However a 3rd group of shipbuilding nations continued to have a dominating 30% and the growth of the Republic of Korea, which became the 2nd largest shipbuilding nation, has been phenomenal (Fig. 9). For some time in the forseeable future, international competition in shipbuilding can be expected in stiffen.
Meantime,Japanese shipbuilding industry is continuing to be forced to operate at 70% capacity with the decline in unit prices continuing to make operations persistently difficult.
In response to the recommendations of the shipbuilding subcommittee of the Council for Rationalization of shipping and shipbuilding Industries, the Ministry of Transport undertook projections on an overall long term basis for shipbuilding and concluded that @ improvement of the underlying financial strength of the shipbuilding industry through increases in productivity and improvement in reorganization within the industry, A improvement in the financial strength of the ship machinery industries, and B promotion of technology development, were necessary to re-establish an attractive and competitive industrial organization, and made a report accordingly to the subcommittee.
(3) International Air Transport
    Today our country with its own air transport enterprises (2) and foreign air transport enterprises (37) forms a network with 40 countries, I area and 80 cities. The number of passengers arriving and leaving by scheduled airliners has been steadily increasing, and in fiscal 1983, looking at the share of passenger traffic per area, it was equivalent to 90% of the total traffic between Asia and the US (Fig. 10). On the other hand, freight transport has also shown phenomenal growth.
   With respect to the development of an international air transport policy, de-regulation is progressing in the US, the U.K. _and Holland. It can be expected that pressures from those nations, which support a number of different internationally competitive airline enterprises of various sizes, will gradually succeed in the decontrolling of international air transport. In order to enable Japanese international airline enterprises to commercially compete against these foreign interests, it is extremely important to have them strive for a much higher degree of efficiency and improve their services 'for the benefit of their customers.
   In the negotiations between Japan and the US on air services, to achieve an eventual fair balance between Japanese and US interests, discussions are continuing right now to endeavour to reach an agreement by September 1985. Within a provisional framework established in 1982, charter flights were arranged for All Nippon Airways to Hawaii in September 1984. In reconstructing the airlines relationship between Japan and the US with sufficient attention being paid to the changes taking place around the world in international airway relations, it is necessary to achieve an overall balance in air rights. At such a time, the size of the US airline market, with numerous unrestricted airports throughout the country, (conditions which do not exist in Japan but which are advantages which only the US possesses,) must be given due recognition.


4. 3 Promotion and Expansion of International Cooperation


(1) Economic cooperation with developing countries
   Economic cooperation in transport-related activities such as the improvement of transport infrastructure is exceedingly important for the development of the economies and societies of developing countries and many such requests are received. Therefore, a great portion of overseas aid from Japan is devoted to transport-related areas.
   @ Financial cooperation
   20% of the total direct loans of Japanese government (total cumulative record from fiscal year 1966 to 1983) is allocated to transport, so that in 1983, loans totalling ¥130 billion were allocated to transport projects. (Official "Exchange of Notes" basis.)
   A Technological cooperation
   The Ministry of Transport extends assistance to developing countries on an intergovernmental basis, cooperating through JICA (Japan International Cooperation Agency) in the reception of trainees, dispatch of experts, development research projects, etc. In addition, for projects on an international scale, studies are continuing on the concept of a second Panama Canal construction project and the concept of an Asis Master Port.
(2) International cooperation with developed countries
   With the advancement of the position of Japan in international society, and with the closer relationships of mutual interdependence on an international basis, Japan is expected to make its contribution to the international economy and society so that the necessity of promoting international cooperation on a wide range of economic and engineering projets is being emphasized. Under such circumstances, pivoting around the US, Japan and the EC within the world economy, in order to solve the problems faced by the international community in resources, energy, environment, food supplies, etc. scientific technological aid in transport expertise between two countries and in multi-faceted assistance has been promoted and shall continue in closer and more concentrated ways with already well developed nations in particular.


4. 4 Promotion of Mutual Understanding on an International Basis


   20 years have elapsed since restrictions on travelling abroad were abolished, and the number of visting foreigners from abroad has grown' phenomenally. The 310,000 persons who visited in 1963 reached 1,970,000 by 1983 (6.4 times) which was an average 10% increase per year.
   On the other hand the number of travellers abroad from Japan with the rise in the standard of living and the increase of leisure time, grew from 100,000 persons in 1963 to 4,230, 000 (42.3times) in 1983, increasing proportionately far more than the pace of visitors to Japan.
   Under such circumstances, in order to cope with the increase of visitors to Japan, the provision of tourist information network (i system), travel phone services, goodwill translating movements, etc. are being implemented but in order to properly increase international understanding, a continued, detailed and sincere effort must be expended towards foreign visitors as well as arranging for better security for the Japanese visiting abroad as a part of an overall promotion of international tourism, is becoming more and more necessary.


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