Japan yesterday announced a development aid and loan package for Myanmar worth hundreds of millions of US dollars as it boosts trade ties with the fast-changing nation seen as a key emerging market.
Japanese Prime Minister Shinzo Abe, who has pledged “all possible assistance” to kick-start Myanmar’s long-neglected economy, agreed the plans in talks with Burmese President Thein Sein in Myanmar’s capital, Naypyidaw, according to a joint statement released by the Japanese Ministry of Foreign Affairs.
“In laying a new foundation for taking the relationship between Japan and Myanmar to a higher level and establishing a lasting, friendly and cooperative relationship, Japan and Myanmar will work together,” it said, before outlining areas of cooperation.
Abe’s visit, the first visit by a Japanese prime minister since 1977, heralds a further improvement in already warm relations between Japan and Myanmar, as political reforms and the removal of most Western sanctions spur investment in the former pariah state.
As part of the new deals, Abe pledged up to ￥51 billion (US$498.5 million) in new loans.
This covers countrywide infrastructure development, including road, electricity and water supplies; power station maintenance; and development of the Thilawa special economic zone, a bilateral project agreed on in December last year.
Japan also confirmed it would forgive ￥176.1 billion of Myanmar’s debts — the final portion of the ￥300 billion that Tokyo pledged to cancel in April last year. The move was contingent on further reforms.
Japan also announced an aid package worth up to ￥2.4 billion for water management in Yangon and a scholarship program for young administrators overseeing Myanmar’s social and economic development.
On Saturday, Abe visited the Thilawa project — a 2,400 hectare site that will include a port and industrial park — as part of efforts to promote Japanese firms and infrastructure-building expertise.
A memorandum of understanding was also signed for the project between nine Burmese companies and three from Japan, state-backed newspaper the New Light of Myanmar reported.
Abe is accompanied by a 40-strong delegation of bosses from some of Japan’s top companies.
Myanmar economics expert Sean Turnell said Japan’s investment push into Myanmar was both economic and geopolitical, the “rivalry with China” also driving policy.
Turnell said Japan had become the “dominant player” in Myanmar, with China facing flak from communities concerned over the environmental and social impact of several major infrastructure projects.
“China has been blindsided, I think, and has a great hole of unpopularity to climb out of. The West is interested, but much of their money remains hovering nervously above the table as yet,” he said.
Unlike its Western allies, Japan maintained trade ties and dialogue with Myanmar during junta rule, which ended in 2011, saying a hard line could push it closer to Beijing.