On August 16, 2010, the author recalls how a bold mixed-use project in Osaka collapsed after a misguided PFI manager dismissed it as “unviable.” He argues that Japan’s Lost 20 Years were created not by market forces but by second-rate elites trapped in ego and bureaucracy. True first-rate actors—global enterprises and innovators—prove that only selfless decisions for the nation can revive Japan. PFI schemes and bureaucratic advice will never restore growth; admitting past failures and embracing real reform is the only path forward.

The author recounts a failed real estate deal in Osaka from over a decade ago, exposing how a superficial method like “PFI” caused a significant loss of opportunity. He blames this failure on the arrogance of “second-rate” bureaucrats and experts who refuse to learn from the first-rate managers and companies capable of making “correct and bold decisions.” He argues that the true role of an elite is to be selfless, and that only by acting for the good of their country and others can they reach the top tier and save Japan.

The Reality of PFI
August 16, 2010

Some ten-plus years ago, when Japan was at rock bottom and every major corporation had its head down, an office building on a 350-tsubo lot in Osaka’s Midosuji area went up for auction. Once valued at 80 million yen per tsubo, the land price had dropped to just 3.8 million yen per tsubo.
No one had imagined it: a postwar-first mixed-use plan in this district—offices up to the eighth floor (the local height limit), and condominiums above. For people choosing condominium life, the best place is always the very heart of the city. But since land values there exceeded 100 million yen per tsubo, no condominiums were built, pushing residences ever farther outward.
The bubble collapse and heavy taxation had left properties unsold even at drastically reduced prices. That is why this property fell so low.
The first to immediately approve the plan was a debt-free listed company with outstanding financial health. Through university classmates who had left major financial institutions to start a venture, I was introduced to this firm. After a single glance they understood, and a month later the president’s approval made the project official.
At the second meeting, attended by upright managers of the Kansai-based firm, there appeared a strange man with a topknot hairstyle. He introduced himself as “PFI manager” and declared: “From the PFI perspective, average rents of 12,000 yen per tsubo on the office floors are far too high to be viable.”
With that single absurd statement, a 4.5-billion-yen project collapsed—even though the condominium units were to be priced at just 1.8 million yen per tsubo, an unheard-of bargain in central Yodoyabashi, and the office rent was already set at a low level for a brand-new building.
Years later, a manager from the same company called me: “Kisara-san, towers have gone up everywhere since. If that fool hadn’t said such nonsense, both our firm and yours, and even the landowner, would all have profited greatly.”
And yet, even twenty years on, the media and the so-called elites do not understand. How many times will you keep repeating the same mistake? But this time, failure means the end. If fundamental solutions are not implemented, Japan will truly collapse. Worsening recession, murders across the country, rampant welfare fraud—are you really intent on making Japan that kind of nation?
At all times, there are companies capable of correct and bold decisions. Learn from them—not from bureaucrats and academics who created the “Lost 20 Years.”
If you still do not understand after all this, I will tell you plainly: you are all second-rate players, trapped in selfish egotism. True first-rate people are those in enterprises competing globally or making Nobel-worthy discoveries. Second-rate people can reach first-rate only by holding true selflessness, by thinking of the nation and others. Only then can you save this country.
Otherwise, as long as you cling to the centralized state you built, Japan will sink. The only truth in what you say is this: “The people can rely on the state for only ten more years.” But in reality, it is you who will squander the remaining 500 trillion yen, just as you squandered 900 trillion over the past two decades.
The only path back is to admit that you created Japan’s Lost 20 Years, recognize your folly, and take my proposals seriously. Nothing else will save this nation.