Japan’s investment in the domestic construction industry has fallen to less than half its peak in 1992. Given the country’s declining population, Japanese construction companies must go global to remain profitable. To what extent the Japanese government and Japanese companies can contribute to meeting the growing infrastructure needs in the region is unclear as Japanese companies have long been operating primarily in Japan. The Japanese government has in recent years passed a series of new laws that encourage private sector participation in financing, building and operating public infrastructure. Through involvement in such public projects, Japanese companies have developed the skills and technologies to build a variety of infrastructures that are resilient to natural disasters and adaptable to various geographical conditions and social and economic development. But the major challenge for Japanese companies is to transform their business model drastically from one that relies on the domestic market to one that contributes to the social and economic development of third countries.

This paper considers the problems surrounding the implementation of road infrastructure plans in a policy perspective. As the main pillar of regional connectivity, road networks provide the link across national markets, foster strong and sustainable economic growth, help meeting people’s basic needs, and promote trade and competiveness. It is argued that planning, implementing, and managing good transportation infrastructures poses a series of challenges that require competence, good governance, and the availability of funds. Such problems become more complex when road projects encompass different states and become transnational. The regional dimension of connectivity involves both opportunities and risks; a cooperative attitude by all parties is viewed as the best ingredient to achieve a positive balance. Since most countries cannot still rely on domestic resources, the paper stresses the role of virtuous policies in directing capital flows from abroad towards the infrastructural projects of Southeast Asia.