TOKYO -- Japan's government-backed Cool Japan Fund, an investment vehicle aimed at promoting the country's cultural exports and boosting inbound tourism, is attracting criticism for failing to achieve its objectives.

The Ministry of Finance on Monday posted a proposal to restructure the fund if it fails to improve its performance by the fall.

It was hoped that the Cool Japan Fund, a public-private fund set up in 2013, would play a central role in the government's "Cool Japan strategy," which was aimed at increasing exports of cultural goods and contents such as anime and food, and creating new commercial opportunities by stimulating overseas demand for Japan's cultural exports.

But the fund has been in the red since it was set up. As of the end of March, the fund had posted a cumulative loss of 30.9 billion yen ($228 million). At the same time last year, the deficit was 23.1 billion yen. Some members of the Finance Ministry's subcommittee on Fiscal System Council commented that, "By pursuing numerical targets too strongly, the original policy of providing risk money may not be achieved."

The fund plans to come up with a plan to improve financial returns by the autumn, including strengthening oversight of the companies in which the fund has invested. However, if the effort fails, "We will organize a path forward with a view to consolidation," the subcommittee pointed out in a report.

The Cool Japan Fund has focused on making overseas and domestic investments that contribute to creating inbound tourism, but the effort has been hampered by the COVID-19 pandemic.

Traffic has been lighter than expected at this Japan-focused store run by Isetan Mitsukoshi Holdings in Kuala Lumpur.

In 2018, even before the pandemic, the Finance Ministry had listed ways to improve the fund's operations. It recommended the fund focus on large-scale projects and strengthen governance by having the person in charge report weekly to the fund's managers on projects.

The fund has concentrated on several themes, including media and content, food and services, and fashion and lifestyle. Indonesian superapp developer Gojek and Taiwan-based online travel startup KKday are two of the companies listed in the fund's portfolio.

But many of its investments have not turned a profit. Isetan The Japan Store, which the Cool Japan Fund opened in Kuala Lumpur in October 2016 together with Japanese department store operator Isetan Mitsukoshi Holdings, is an example.

It had been hoped the store would help promote Japanese culture. But the concept behind the store was unclear: In the food section, for example, makgeolli, a Korean rice wine , was sold alongside Japanese sake, while Western books were stocked in the book shop. The store has had lackluster sales since its opening, and there was no way to revamp it, which prompted the Cool Japan Fund to pull out in June 2018 through a stock sale.

"Policy objectives tend to be prioritized and investment criteria and profitability are inevitably not well assessed" with government-led investment vehicles, said Sayuri Kawamura, chief economist at the Japan Research Institute. With the government providing around 90% of the cash for the Cool Japan Fund, "There is also a belief that too much government involvement can distort the market, and that it is necessary to devise ways to prevent excessive government involvement, as is the case in Europe," Kawamura said.