The article analyzes the evolution of mechanisms for financing social infrastructure in Japan in the context of slowing economic growth and increasing public debt, and provides a comparative analysis of infrastructure policy in Japan and in other countries. The main focus is on updating the models of public-private partnership and private Finance Initiative (Private Finance Initiative) and the use of technologies of "transformative" investments (Social Impact Investment), aimed at redirecting non-state capital flows to social infrastructure, provided that an acceptable level of income is provided for entrepreneurs. The article also discusses the directions and problems of social entrepreneurship development in Japan.

Keywords: Japan, public-private partnership, private financial initiative, "transformative" investments, social entrepreneurship, non-profit organizations.

STATE AND PRIVATE PARTNERSHIP AND SOCIAL IMPACT INVESTMENTS IN SOCIAL INFRASTRUCTURE OF JAPAN

Irina TIMONINA

The article analyzes the evolution of mechanisms in the financing of social infrastructure in Japan in the face of slowing economic growth and increasing public debt. The author presents a comparative analysis of infrastructure policy in Japan and other countries. The focus is on the update models of public-private partnerships, Private Finance Initiative and technology, Social Impact Investment aim to redirect private capital towards social infrastructure and at the same time to provide an acceptable level of income for business. The article also discusses trends and problems of development of social entrepreneurship in Japan.

Keywords: Japan, public-private partnership, Private Finance Initiative, Impact Investments, social entrepreneurship, non-profit organization.

Irina L. TIMONINA-Doctor of Economics, Professor, Institute of Asian and African Studies, Moscow State University, MGIMO(U) Ministry of Foreign Affairs of the Russian Federation, Russian Presidential Academy of National Economy and Public Administration. timonina2000@yahoo.com.

Irina TIMONINA - Doctor of Sciences (in Economy), Professor, Institute of Asian and African Studies of Moscow State University, MGIMO University, The Russian Presidential Academy of National Economy and Public Administration (RANEPA): timonina2000@yahoo.com.

One of the fundamental shifts in the modern global economic system is the transformation of infrastructure ¹ from a service, auxiliary, "providing" sphere of activity to one of the drivers of economic growth. Infrastructure development is considered by many countries and international organizations as a necessary basis and means for solving socio-economic problems that have worsened in recent years, including in connection with the financial and economic crisis of 2008-2010, which has become a kind of indicator of the systemic crisis of the world economy.

Infrastructure projects and infrastructure investments may be able to break the chain of negative circumstances that prevent the global and national economies from achieving a sustainable growth trajectory. The main links in this chain are: stagnation of demand in the main markets of manufacturing products-reduction of production capacity-reduction of effective demand-withdrawal of production from developed countries to developing countries - export of products from countries hosting foreign companies to developed countries where demand is declining. The" replacement " of material production by tertiary sectors in the economic structure of developed and many developing countries, as it turned out, does not provide an acceptable rate of economic growth that would ensure an increase in employment and income.

Under these conditions, infrastructure - both industrial and social - is becoming a dynamic and quite attractive market segment for investors in many countries. At the same time, the multiplier effect increases as the sphere of creating infrastructure projects and managing them becomes more high-tech.

In the context of globalization, there is a growing need to improve transnational and international infrastructure (primarily logistics), a kind of "infrastructure interdependence" between countries is increasing, and accordingly new opportunities for implementing international projects are emerging. A dynamic segment of infrastructure project financing has emerged in the structure of the global financial market. In particular, the establishment of the Asian Infrastructure Investment Bank (AIIB)in 2015 can serve as a confirmation that this market is developing (57 founding countries).

National infrastructure, as well as the provision of social services provided on its basis, has traditionally been the area of government responsibility, including financial responsibility. Construction and operation of infrastructure facilities and complexes were considered more as "expensive" activities. This view has an objective basis, since infrastructure is usually capital-intensive objects with a long payback period and a relatively low rate of return, investments in which were not always interesting for business.

In today's economic reality, in the context of slowing economic growth in developed countries (and Japan is by no means an exception in this regard), infrastructure modernization is considered by governments as one of the driving forces of economic growth.

Investment in infrastructure in the short term contributes to the creation of new jobs in the construction sector and related industries. In the long run, infrastructure upgrades have a positive effect in terms of increasing labor productivity and reducing production costs in many industries. All this together leads to a revival of economic activity in the country and an increase in the competitiveness of national economies and individual regions.

¹ INFRASTRUCTURE [lat. infra]. below + structura structure, order]. Components of the general structure of economic or political life that are subordinate, auxiliary in nature and ensure the normal operation of the economic (political) system as a whole [Explanatory Dictionary of Foreign Words, 2008].; Branches of the economy, scientific and technical knowledge, social life that directly provide production processes and living conditions of society [Explanatory Dictionary of Ozhegov].

manufacturers. The World Bank estimates that a 10% increase in infrastructure spending leads to a long-term 1% acceleration in GDP growth [Antonets, 2015].

However, in order to effectively redirect capital flows towards investment in industrial and social infrastructure, mechanisms are needed to ensure an acceptable level of income for businesses. Public - private partnerships and technologies of social ("transformative") investment (Social Impact Investment)² are among such mechanisms that are already in use and are constantly being improved.

Public-private partnership (PPP) is a combination of various forms of interaction between the state and business to solve socially significant tasks, including the creation of infrastructure facilities, ensuring their functioning and providing a range of social services based on them. This form of cooperation between the state and business and its use cases have been known for a long time, but it became widespread in developed countries in the 1980s and 1990s, when many countries began to review the entire system of relations between the private sector and the state on the basis of recognizing their joint responsibility for solving national problems. The growing popularity of this form of implementation of various projects is associated both with the spread of ideas and concepts of social responsibility of business, and with the aggravation of public finance problems in many countries. In the face of growing budget deficits and public debt, Governments are unable to fully bear the burden of responsibility for infrastructure development. In addition, the infrastructure sector itself and the requirements imposed on it by the economy and society are changing significantly, which requires new approaches to its creation and functioning.

Social "transformative" investments (Impact Investing) are understood as investments aimed at creating a mass flow of projects that solve socially significant problems, while providing investors with acceptable returns [Chernyshov]. Experts at Harvard University point out that" transformative "investors avoid investing in potentially" harmful "companies, and focus on" socially responsible investments " that can help solve large-scale problems [Impact Investing, 2011]. In other words," transformative " investments primarily involve socially responsible companies that work together with state and public organizations, foundations, and non-profit organizations.

According to experts of the Russian working group on transformative investments, such investments are collectively referred to as a new wave of economic (value) technologies that can ensure the resumption of sustainable growth on a global scale. The ideological and organizational design of the community of its participants took place in 2007-2009. The Global Impact Investing Network is actively supported by such financial organizations as J. P. Morgan, Goldman Sachs, Credit Suisse, Deutsche Bank, Morgan Stanley, Prudential, UBS, etc. Impact Investing technologies and standards, which in the next five years can form a new channel of the global investment flow, are actively discussed at the meetings of the World Economic Forum in Davos and at the G8 meetings and other international forums [http://impact-invest.ru/7page_id=89].

Among the main areas of application of such investments, which are outlined in the Harvard study mentioned above , are agriculture (environmentally and socially sustainable agriculture and food systems), housing and utilities (access to quality housing, sustainable and publicly accessible utilities), financial services, including servicing small and micro-sized enterprises-

² In this article, these mechanisms are analyzed in relation to the construction of social infrastructure facilities, as well as their operation in an expanded sense, meaning not only the maintenance of technical condition, but also the provision of social services based on them, for which they are intended.

education for all segments of the population, health care, including the promotion of affordable preventive medicine and treatment for the poor and rural populations, environment (reducing pollution, conserving natural resources), energy (promoting clean technologies, reducing carbon emissions, countering climate change), water supply (access to safe drinking water) [Impact Investing].

INFRASTRUCTURE IN JAPAN

With an increasing proportion of global infrastructure spending concentrated in developing countries, Japan remains the largest infrastructure investor among developed countries. In terms of the scale of infrastructure investments made in 1992-2011, it is ahead of the EU and the United States in terms of both absolute volume and share in the country's GDP, which was 5% for Japan, 2.6% for the United States (8.5% for China, 4.7% for India).

The country occupies a leading position in terms of the ratio of the cost of infrastructure facilities and the economic scale of the country, measured in GDP: at the beginning of this decade, this figure was 179% in Japan, while, for example, in Switzerland-85%, China-76%, Germany-71%, and the United States-64%. According to the McKinsey consulting company, a normal level of infrastructure development can be achieved with the total cost of infrastructure facilities equal to 70% of the country's GDP. Based on this premise, Japan (as well as China) is among the "overinvested" countries and, according to the consulting agency, in the period up to 2030, it may well reduce the share of infrastructure investment to 2.6% of GDP [McKinsey, 2013, p.12-13].

However, the position and intentions of the Japanese government do not fully coincide with the assessment (recommendation?) a consulting agency. In Japan, as in other countries, the infrastructure sector is seen as one of the most promising in terms of getting the economy on a sustainable growth trajectory (see figure 1).

Scheme 1

Impact of infrastructure investment (estimated by the Ministry of Land, Infrastructure, Transport and Tourism of Japan)

Составлено по: [White paper on Land, Infrastructure, Transport and Tourism in Japan, 2013, p. 11].

In the strategic developments presented by the Abe government in February - June 2013 (shortly after he came to power), a "hybrid economy" model focused on both foreign trade and domestic investment was proposed as a target [Fiscal 20/3 Economic Outlook, 2013], including in the infrastructure sector. In the Strategy for the Revival of Japan, which is one of the three " arrows "(directions) of "abenomics", a plan was proposed to create a strategic market, almost all positions of which are somehow connected with infrastructure:

1. health care (in the wording of the document "Increasing healthy life expectancy");

2. clean and cost-effective energy;

3. create and improve a secure, convenient and cost-effective next-generation infrastructure;

4. Forming regional communities that develop on the basis of unique local resources and presenting them to the world [Basic Policies..., 2013, p. 11-13; New Growth Strategy..., 2013].

The development of infrastructure as such, as well as systems, solutions and technologies in this area, is of great importance for improving Japan's national competitiveness in foreign markets. In 2013, the Japanese government adopted a Strategy for Exporting Infrastructure Systems, which set targets for such exports - 30 trillion yen by 2020, compared to 10 trillion in 2013. To finance infrastructure projects of Japanese companies abroad, a special corporation "Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development" (JOIN) was established in 2014 with the involvement of both public and private capital and government guarantees (under the investment and loan program) [White paper on Land..., 2013, p. 297].

PUBLIC-PRIVATE PARTNERSHIP IN INFRASTRUCTURE

One of the trends of modern infrastructure policy in Japan is the expansion of the practice of using market mechanisms in the construction and management of infrastructure facilities. This is not to say that this practice is completely new. Entrepreneurship in Japan has long been involved in socially useful works. For example, the MLIT yearbook cites the construction of canals by wealthy merchants during the Edo period (Tokugawa Clan rule, 1603-1868) as a historical example of a private financial initiative.

The novelty of the current situation consists in a significant activation of business initiatives in this area, which requires both the development and implementation of new partnership mechanisms. The public-private partnership (PPP) system in Japan became institutionalized in the late 1990s. Initially, this partnership took the form of the so-called private financial initiative (PFI) [Ivanova, 2010], the meaning of which was to use financial, technological, and organizational resources of the private sector for the construction and management of infrastructure facilities (see fig. table 1).

The total number of projects launched under the BFI schemes between 1999, when the law was adopted, and September 2013 is 428 (totaling 2.3 trillion yen), of which 120 were implemented under the auspices of the Ministry. These are mainly state-owned construction projects.! institutions and public buildings. At the same time, according to the Ministry's experts, it is quite rare to use the BFI mechanism in the construction of roads and urban communications. The most common scheme of PFI is the "sale of services", in which a state organization pays a private operator the cost of building public facilities in the form of payment for services. In particular, this scheme is used to build and operate-

Table 1

Development of public-private partnership in the field of infrastructure

Compiled from: [White paper on Land..., 2013, p. 72].

state institutions, airports, water and sewer networks, parks, and the operation of weather satellites are destroyed.

Another type of BFI projects is financially independent projects, where the investor himself reimburses the cost of construction of the object at the expense of tax-free income. When using the concession method (provided for in the amendments to the BFI Law of 2011), the rights to a public object remain with the state, and the private operator receives the right to operate this object and charge fees for use, which allows it to develop its business, improve the quality of services and be largely financially independent. In Japan, this method is considered the most cost-effective and in the period from 2013 to 2022, it is planned to increase the cost of such projects, primarily in the field of reconstruction and maintenance of airports, urban economy, roads, to 12 trillion yen [White paper on Land..., 2013, p. 2-73].

One of the urgent problems associated with the wider use of BFI in Japan is considered to be the diversification of the set of project financing tools, primarily through the use of financial market opportunities. According to Japanese experts, PPP and BFI currently have a large market potential, as evidenced by the growing number and size of capitalization of funds that finance infrastructure projects outside of Japan. Infrastructure funds accumulate investors ' funds and then invest them in projects for the construction of roads, ports, and airports, the profit from which is subsequently distributed among investors. Some of these funds place shares on the stock market (there are about 50 of them outside Japan with a total capitalization of 10.4 trillion yen.

moreover, their number has increased more than 6 times since 2000). Other funds attract funds from institutional investors, including pension funds (about 40% of the total) and banks (10%). There are about 40 newly created funds of this type outside of Japan, and they have approximately $ 30 billion in funds.

The structure of the formation of infrastructure financing funds in Japan has significant features. A significant part of the funds ' capital is generated from domestic sources. In addition, since most of the BFI projects are implemented in the "purchase of services" format, funds are mainly attracted from financial institutions. However, according to MLIT experts, as the number of independent projects grows, there are opportunities to attract resources in the market, including outside of Japan.

In order to stimulate the Japanese infrastructure project financing market, in 2013 the country established a public-private fund, the Private Finance Initiative Promotion Corporation of Japan, which is designed to provide financial assistance to concession projects of the BFI, mainly of an independent type. The corporation's financial resources are formed both at the expense of state funds (a special account for industrial investments), and at the expense of private investment and loans (the latter under state guarantees). The corporation then allocates these funds by financing so-called independent-type BFI projects in the form of investments and loans. At the same time, such projects attract financial resources from the market - from banks and investors, and thus provide multi-channel financing [White paper on Land..., 2013, p. 72-73].

The listing of infrastructure funds is intended to help diversify the sources of financing for infrastructure projects, which, in fact, means the formation of a new segment of the Japanese stock market. Preparations for the listing date back to 2012, when the Japan Stock Market Group (Japan Exchange Group, Inc., JPX), which includes the Tokyo and Osaka Stock Exchanges and the Japan Exchange Regulation, as part of its Medium-term plan to create a platform for new products, put forward the creation of an infrastructure financing market as a key strategy and conducting a listing on it. In September 2012, a special research group was created on this issue, which developed relevant rules and recommendations on such key issues of market organization as the conditions and rules for listing infrastructure funds and trusts, including foreign ones [Report by the Study Group]. The first issue of shares in infrastructure projects is planned for the end of 2015 and, according to experts of the Ministry of Lands, if successful, this will make it possible to attract funds from individual investors in this area. In the process of preparing for the creation of an infrastructure finance market, the Financial Services Agency is reviewing some institutional norms. For example, utility facilities, as well as generating capacities powered by renewable energy sources, can be listed as assets where trusts and investment corporations can invest as the main investor, which was previously impossible.

As for the willingness of the population to participate in the financing of infrastructure projects, according to the results of a public opinion survey conducted by the Ministry of Lands, those of the respondents who are really or potentially ready to invest in infrastructure projects (19.1% of the total number) believe that these are reliable and sufficiently profitable investments with a clear target by orientation. According to the Ministry's experts, such a position of potential investors inspires some optimism about the future development of the infrastructure finance market [White paper on Land..., 2013, p. 75].

Another possible source of financing for infrastructure projects that is being discussed in Japan is pension funds. State

The Japanese Pension Fund (GPIF), which combines state pensions and employee pensions, is the largest in the world. Currently, it places funds mainly in government bonds (55%). However, the possibility of changing the structure of allocation of funds managed by the fund is being considered, in the direction of increasing the share of investments in infrastructure projects.

The use of the private financial initiative mechanism in Japan is considered effective both in terms of opportunities to revive the economy, and in the interests of reducing the financial burden on the state and improving the quality of services. New investment opportunities are being created for companies. If we assess the situation in terms of financial flows and funds in individual institutional sectors, then there is a deficit in the public sector, and in the private sector - both companies and households - there is a surplus of financial resources. In order to cover the deficit, including infrastructure financing, the state borrows capital from "financially surplus" sectors by issuing bonds. Through the PFI mechanism, companies (and households) have the opportunity to invest directly in projects, bringing their know-how in addition to financial resources, and thereby improve project efficiency, reduce costs, and contribute to reducing the financial burden on public finances. According to MLIT experts, the cost reduction can be up to 40-60%, while the savings are directly proportional to the scale and duration of the project. At the same time, service standards can also be improved, since a private company, acting as the main operator of the project, has a sufficient degree of freedom to fully use its potential and thereby expand the circle of customers and increase the profitability of the project.

Another form of attracting the private sector to the infrastructure sector in Japan is Comprehensive Work Assignment, which provides for the transfer of an order to a company or, more often, a group of companies to carry out a number of interrelated works on a single object. For example, in the Futyu district (Greater Tokyo), a three-year contract was given to road maintenance, including patrolling (together with police officers), cleaning and repairing the road, caring for green spaces, registering accidents, confirming cases of illegal seizure of property and illegal waste disposal. Judging by the results of a survey conducted by MLIT, entrepreneurs have a positive attitude to this form of contracts, noting such attractive moments as the ability to plan their activities in a longer time perspective and optimize profits due to the scale of operations. At the same time, the companies also have doubts, for example, the need to create a joint venture to fulfill a complex order is of concern.

In addition to those mentioned above, some regions of Japan have also found their own methods of attracting resources for the construction and operation of infrastructure facilities. One of them is "Naming Rights", the essence of which is to transfer on a paid basis the name of a company's brand or product to some public object that is visited by large masses of potential consumers. For example, in g. And vata (pref. Two municipal roads (Sakura Kotsu Road and LaLaport Road) were named after the city of Shizuoka. The municipality's revenue totaled 3.6 million yen over 5 years, and these funds were used to improve and maintain roads. In Osaka, where this innovation was first applied in Japan, 10 bridges were named, and the revenue was 300 thousand yen per year.

In the regions, a method of mobilizing resources for the construction, repair and maintenance of social infrastructure facilities is used, such as issuing local loans on a partially market basis (mini-bonds). They are distributed to local residents (individuals) and local companies, and the proceeds from

Table 2

Rating of countries (territories) by the level of readiness to use public-private partnership

Note: The 2011 Asia Infrascope country ratings are based on a weighted sum of scores across six categories on a scale from 0 to 100, where 100 represents the ideal environment for PPP projects. The surveyed countries were divided into 4 groups: countries that are in the stage of developing conditions for PPP, the overall rating is up to 30," rising economies " - 30-60, developed - 60-80, mature - 80-100.

Source: [Evaluating the environment..., p. 12].

sales of bonds are directed to the implementation of a specific project. A special feature of these loans is the provision of special privileges to the subscriber in addition to the usual percentage, for example, receiving a prize in the form of a basket of rice or free tickets to the zoo [White paper on Land..., 2013, p. 82-83].

Thus, we can conclude that both the institutional environment and the practice of using PPP mechanisms for creating and operating social and industrial infrastructure are at a high level and are considered as promising and developing in the future. This is confirmed by the assessments of international experts. So, in the rating compiled by The Economist Intelligence Unit Ltd. and the Asian Development Bank on the level of readiness of countries to use PPP (based on an assessment of the legal and institutional environment, operational and financial readiness, investment climate)³, Japan is classified as a group of countries with a developed public-private partnership system (see Table 2).

³ Rating components: 1) the country's legal and regulatory framework for concession projects; 2) the structure and responsibilities of institutions that prepare, promote, and oversee projects; 3) the government's ability to comply with concession laws and regulations, as well as the number and success of past projects (operational maturity); 4) the business, political, and social environment for developing projects. investment climate); 5) financial institutions for infrastructure financing. An additional (sixth) indicator is activity at the regional level (sub-national correction factor), which was introduced in 2010. Some indicators of the index are based on quantitative data that were taken from international statistical sources, while others are of a qualitative nature [Evaluating the environment.... 2011, p. 6, 9].

Table 3

Japan's performance by components of the Public-Private Partnership Readiness Index

Source: [Evaluating the environment..., p. 11-18].

Financing, according to experts, is the strong point of organizing public-private partnership projects in Japan. Of all the components of the readiness index, the country has the highest financial base, which is not surprising, given the significant efforts of the Government to diversify sources of financing, which were discussed above (see Table 3).

In general, according to the experts of the ADB and The Economist Intelligence Unit, Japan has a solid foundation for the development of the PPP project market. In particular, the importance of the adoption of the Law on the Promotion of Private Financial Initiative in 1999, which defined the institutional framework for PPP projects at the national level, as well as amendments to it adopted in 2011 and providing for the expansion of the range of projects open to PPP, is noted.

Experts consider the lack of a common project management system in Japan to be a negative point, as a result of which various ministries, as well as prefectures, are responsible for day-to-day control of projects, where most of the projects are implemented (73% of the total number of PPP projects in 2007-2008). In this point, experts ' assessments raise some doubts. In my opinion, the close attention that local authorities pay to social infrastructure is rather a strong point of the Japanese system. It is at the local level that initiatives are being implemented that best meet the interests of citizens, and it is at the local level that new approaches to the formation of infrastructure development funds, including those discussed above, are emerging.

At the same time, local residents themselves, including those united in non-governmental organizations and cooperatives, are actively involved in transforming infrastructure and improving the quality of social services. Among such civic initiatives, which, by the way, do not require significant financial expenditures , are the arrangement of public transport stops, strengthening coastal structures and many other small but necessary tasks. Thus, the range of actors involved in implementing infrastructure and social policy is expanding, which in turn makes it necessary to find new forms of government partnership not only with business, but also with citizens and their organizations.

Experts highly assess the legal framework of PPP in Japan. In particular, most of the projects are implemented through competitive bidding regulated by the Civil Code, antimonopoly legislation and the Law on PFI. However, if collusion does occur during the bidding process, it is rarely penalized accordingly. Dispute resolution is possible through the International Center for Settlement of Investment Disputes or in court, but this mechanism is not used very often due to burdensome procedures and lack of resources. Judges are more likely to favor the government in disputes, and the Japanese BFI Committee recommended the creation of a "neutral dispute resolution body" back in 2007 [Evaluating the environment..., 2011, p. 7, 23-24].

TRANSFORMATIVE INVESTMENT IN JAPAN

Along with public-private partnerships, transformative (or socially significant) investments are another mechanism for implementing infrastructure policies and providing social services in Japan.⁴

"Transformative" investments are a relatively new segment of the Japanese investment market and are in the nascent stage, or, as defined by the Japanese National Advisory Council on Transformative Investments, which was formed in accordance with the recommendations of the G8 Social Investment Working Group, in the "uncoordinated innovation" phase, which should be followed by the following phases: market creation, market position strengthening, and maturity. Various financial institutions (including corporate funds) are currently involved in financing socially significant investments in Japan, which accumulate about $ 247 million. Social investment has been particularly active since the 2011 Fukushima disaster, when the private sector began to allocate significant financial resources for the rehabilitation of affected areas.

However, it was not only the tragic events of 2011 that stimulated the development and dissemination of social investment mechanisms. Given the growing budget deficit and public debt (more than 250% of GDP) and the demographic challenge caused by the aging population, the government and society of the country are aware of the need to move away from the system of social services provided mainly by public funds.

An active movement in this direction began during the reform of special administrative organizations (Designated Administrator System) in 2003, when some of the public facilities: community centers, libraries, sports facilities, parks - were transferred to non-governmental organizations. The essence of the changes was that special administrative organizations provided public services on behalf of the government, and organizations that were outsourced to provide these services operate independently, under a contract with the government. In total, within 10 years after the start of the reform, 73 thousand structures were outsourced, including 48% of contracts were signed with non-profit and public organizations, and the total cost of services provided amounted to more than $ 70 billion. According to the Cabinet of Ministers of Japan, in 2012, 16.7% of non-profit organizations ' revenues came from the implementation of government orders [2014 The Social Impact..., 2014, p. 7].

Non-profit organizations are relatively new to Japan, having emerged in 1998, and since then their number has increased from 23 to more than 48,000 (in 2013). This was helped by the development of corporate social responsibility ideas, when companies began to allocate large sums to solve social problems that are beyond the direct responsibility of corporations. Currently, there are various types of such organizations in Japan: actually non-profit organizations (the 1998 Law), cooperatives (17 different laws, the number of registered cooperatives is more than 36 thousand), social welfare organizations (19 thousand), educational organizations (8 thousand), associations and foundations (41 thousand) [2014 The Social Impact..., 2014, p. 10]. Such organizations are financed by contributions from their members, donations, and grants, including government ones. More than half of the Company's revenue (55.3%) is generated from its own activities. At first glance, this is a good indicator, but, according to government experts, it is not enough to talk about the possibility of functioning of such systems.

⁴ Further abbreviated PI. The terms "transformative investment"," socially significant investment", and" social investment " are used interchangeably.

organizations as social enterprises with a viable and efficient business model.

Since the second half of the 2000s, the Japanese Government has taken vigorous measures to include non-profit organizations in the provision of social services and the social investment system. For example, in 2007, the law on corporations was amended, which reduced the minimum capital requirements and "entry" barriers for non-profit organizations with a business model focused on generating independent income. In 2009, at the initiative of the Government, a series of discussions was held, called "New Public Commons", in which the problems of such organizations were discussed. Through the Social Innovation Fund, $ 210 million was allocated to finance 800 social entrepreneurship initiatives.

Thus, in Japan, there are business units (non-profit organizations in all their diversity) that, under certain conditions, can take over the provision of social services that have traditionally been provided by state organizations. However, so far in Japan, social entrepreneurship does not have a special legal status, which can create certain problems for attracting investment. In addition, the social investment sector needs support in managing such businesses (which have their own specifics), including through the dissemination of best business practices available at home and abroad.

An important problem is changing the structure of financing non-profit organizations, ensuring the flow of investment in them so that they can function exactly as a business, although of a special kind - social. According to experts of the Japanese National Advisory Council on IP, such investments are an exceptional opportunity for Japan to attract non-state funds to the sphere of socially significant investment, provided that an appropriate legal and institutional framework is created [2014 The Social Impact..., 2014, p. 3-4]. In fact, we are talking about creating conditions for attracting non - state finance to the sphere of public infrastructure and social services on a favorable basis for all parties - consumers of services, the state and investors.

CHANNELS FOR FINANCING TRANSFORMATIVE INVESTMENTS

The potential for non-State financing of social investment in Japan is great both in the household sector (with an estimated total household savings of $ 16 trillion in Japan) and in the business sector, where there are many large companies with strong social responsibility policies.

The main participants in the social investment market in Japan, as in other countries, are public financial institutions that provide loans to non-profit organizations, corporations engaged in charity and social investments, and social enterprises that help venture capital. The Japan International Cooperation Agency initiates cross-border investments of this kind.

Before considering the structure and channels of financing social investment, one clarification should be made regarding the distinction between charity and social investment. These forms of financial participation in socially significant activities of companies and individuals differ from each other. Charity, as you know, involves the allocation of any funds by the donor on an irrevocable (at least in financial form) basis for socially significant purposes.

purposes. Social investment is precisely an investment in a business, although it has a special property that has a social orientation.

However, in Japan, these forms are closely related to each other. Let's explain this with the example of the Mitsubishi Corporation Disaster Relief Foundation. This fund was established in 2012, a year after the Fukushima disaster, to help restore the affected regions. The Foundation's activities are fully funded by the Mitsubishi Trading Corporation (in the form of a grant, as part of the social responsibility program). And the fund itself invests in non-profit organizations, provides them with loans and provides organizational assistance. The foundation's areas of activity include education, helping companies maintain employment, and providing grants to local community organizations for various purposes (in affected areas) [2014 The Social Impact..., 2014, p. 23]. That is why, when studying the problems of social financing in Japan, it is impossible to leave charity aside.

In general, the financial resources that can potentially be attracted to social investment through charity are quite limited in Japan compared to other developed countries, although they show a dynamic growth (from $ 7 billion in 2007 to $ 12 billion in 2012) due to various factors, including the increased activity of the Japanese government. civil initiatives after the natural and man-made disaster of 2011 A special feature of Japan is the high share of companies in the total volume of charity (58% of the total "charity market" against 5% in the UK and 6% in the US). The contribution of Japanese companies to charity increased from $ 5 billion in 2009-2011. up to $ 7.2 billion a year, and 20% of companies spent about 2% of their total profit.

Currently, Japanese companies are engaged not only in purely charitable activities, but also are involved in social investment, mainly through corporate social responsibility programs, acting as both donors and investors. For example, corporations such as the aforementioned Mitsubishi Corp., as well as Benesse Corp., Toyota Tsusho have established special funds for investing in social enterprises to obtain both financial returns and social impact.

Loans from public financial organizations (in particular, the Japan Finance Corporation), the National Association of Labor Banks, as well as regional credit unions and small local banks are a significant source of funds in the Japanese social investment market. The Government provides grants and contracts to social enterprises, including through the Japan International Cooperation Agency, for projects implemented in other countries under official development assistance programs [2014 The Social Impact..., 2014, p. 12-15]. In addition to the above-mentioned direct methods of financing social investment, Japan uses financing channels involving financial intermediaries (see Table 4).

Thus, Japan has developed a certain system of social investment, which is in the initial stage of development. The system's transition to the next stage of development is hindered by the lack of a comprehensive policy and developed legislation in this area, insufficient development of the sector of non-profit organizations and social entrepreneurship, limited long-term, results-oriented financial and organizational support, the lack of a system for assessing the social impact of financial institutions and operators, and an insufficiently rapid transition from the traditional grant system to strategic transformative investments low activity of wealthy individuals or family firms in social investments, low level of awareness of citizens about social investments.

Table 4

Japan's Social Investment Financing system (USD million)

* Hereafter, in parentheses, the amount of financing for transformative investments for 2013, in millions of US dollars.

Source: [2014 The Social Impact.... 2014, p. 20].

To address these limitations, the Japanese National Advisory Council has developed a number of recommendations that take into account the proven experience of other countries in this area. These recommendations include:

* Establishment of an official body or certification system for social enterprises modeled on other G8 countries, such as the community interest company (CIC), low-profit limited liability Corp. (L3C), or benefit corporation;

* adoption of dormant account legislation similar to Big Society Capital⁵ in the UK, to use the funds of such accounts as part of the assets for social investments;

* develop and adopt standards and guidelines for evaluating and reporting transformative investments; create incentives, including financial ones, for funds that allocate a portion of their funds to transformative investments;

* initiate the creation of public-private non-profit partnerships, including major business associations that would encourage private sector investment and use public funding;

* Disseminate the experience of corporations involved in VoR ⁶ projects on using the social investment model to implement their business strategy, including with the support of the Japan International Cooperation Agency (JICA).

In practical terms, it is proposed to create various financial instruments aimed at generating income in the medium term; to develop the bond market to finance transformative investments; to use the experience of social investment accumulated during the reconstruction work in north-eastern Japan; to provide a set of financial and organizational support measures for non-profit social enterprises; to provide tax incentives for social investments, implemented on the basis of legally recognized social enterprises [2014 The Social Impact ..., 2014, p. 3-4, 24].

* * *

Thus, the results of the study of modern mechanisms of public-private partnership and transformative investment in Japan show that Japan is creating a new institutional environment for implementing investment projects and providing social goods and services on a more market-based basis. The creation of such an environment is conditioned by the needs of developing social entrepreneurship, the spread of which, in turn, becomes the result of institutional transformations. The considered mechanisms for attracting non-state financial, technological, and organizational resources to the creation and operation of social infrastructure provide for benefits for all parties. In fact, this is the use of the well-known win-win business strategy, in which the number of participants in the process

⁵ Big Society Capital (BSC) is an independent British group of companies, funds and trusts under a single management, carrying out "wholesale" social investments. Big Society Capital was formed in 2012 with funds received by the decision of the UK government from the inactive accounts of British depositors for 15 years in the amount of 400 million pounds, as well as 200 million pounds from the four largest British banks Barclays, HSBC, Lloyds Banking Group and RBS. [https://ru.wikipedia.org/wiki/Big_Society_Capital/; http://www.bigsocietycapital.com].

⁶ The Base of the Pyramid (BoP) [http://wdi.umich.edu/research/bop]. (See also: [10 lessons for doing business]).

increases to three. The state shares the financial burden associated with the development and functioning of social infrastructure with businesses and partly with citizens, which is very important for the Government of Japan with a chronic budget deficit. Businesses with the indirect support of the state get the opportunity to invest capital in the social sphere and develop in the face of declining economic growth and stagnation of traditional markets. Citizens receive better social services and through civic initiatives and non-profit organizations can directly influence the formation of social infrastructure in accordance with their needs and needs.

Japan is not yet among the leading countries in terms of using modern market mechanisms in the infrastructure sector, but the government and companies are moving dynamically and consistently in this direction, using both their own historical experience of public-private partnership and the experience of other countries.

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