Japan’s Abe pledges more aid for Myanmar

Shinzo Abe, accompanied by a large business delegation, is visiting Myanmar – the first by a Japanese prime minister in more than three decades.

The visit is being seen by security analysts as part of Japan’s attempt to reassert its position as a top economic partner of Myanmar after decades of poor relations with the previous military regime.

Abe toured Myanmar’s mausoleum, which commemorates the national hero, General Aung San, and was due to meet Aung San’s daughter Aung San Suu Kyi, Myanmar’s democracy icon, and the current leader, Thein Sein, in the capital Naypyitaw.

On Saturday, Abe promised to provide “all possible assistance” to help boost Myanmar’s economy, lauding a major industrial zone near Yangon as a symbol of development for the impoverished nation.

“Japan is happy to support nation-building in Myanmar,” he said after visiting the Thilawa Special Economic Zone – a 2,400-hectare project which will include a port and industrial park – led by trading companies Mitsubishi Corp, Marubeni Corp and Sumitomo Corp.

Japanese companies are eager to invest in Myanmar after it started to open up when Thein Sein took office in 2011.

With the US and the EU relaxing sanctions, Japan has moved quickly to capitalise on Myanmar’s resources and its new economic environment without sanctions.

Investment projects

At least 35 Japanese investment projects are under way in Myanmar, the biggest being plans to develop the Thilawa project.

Abe was scheduled to sign agreements to provide Japanese grant money for human resources development and to extend the first Japanese government loan to Myanmar since it cancelled $3.58bn in debt in January.

The last Japanese premier to visit Myanmar was Takeo Fukuda in 1977 during the Socialist regime of the late ruler, General Ne Win

Japan, Myanmar’s largest aid donor, helped clear part of its unpaid debt in an effort to boost Myanmar’s democratic reforms and open ways to resume fresh loans for infrastructure building and major development assistance that will support Japanese business interests.

Al Jazeera’s Veronica Pedrosa, reporting from Bangkok on Saturday, said Japan has made no secret of the fact that it wants to be the champion of Myanmar development, so there have been some reports that the remaining debt that Myanmar owes to Japan is also going to be forgiven.

“They’re talking about a development aid package worth $1bn and the introduction of a basic plan for a comprehensive electricity infrastructure for the country,” she said.

She said such an aid package would be significant not only for the people but also for investors “who complain that lack of infrastructure is a huge part of the hindrance to further investment”.

“It is all part of a strategy on the part of Japan – which the US would be supportive of – to  edge out China’s influence in the region,” our correspondent said.

Chequered past

Japan had close ties with Myanmar before the junta took power in 1988, prompting the country to suspend grants for major projects.

Although it scaled back most business activity and cut government aid when the US and other Western nations imposed sanctions in 2003 after the military regime put Aung San Suu Kyi under house arrest, Japan did not impose sanctions on Myanmar.

But with no major development grants or Japanese loans, major Japanese corporations maintained branch offices in Myanmar with minimal business operations during the previous regime, while neighbouring China gradually became Myanmar’s major trade partner and investor after Thailand and Singapore.

Japan’s investments and involvement lag far behind those of China and India, but that is fast changing after the country forgave about half of Myanmar’s more than $6bn in debt.

A high-powered delegation of business leaders, including top executives from Toyota Motor Corp, Hitachi Ltd and Sumitomo Chemical, toured Myanmar in February and pledged to cooperate in encouraging more investment.

As of late February, Japan was the 11th largest investor in Myanmar, with $270m in overall investments, way behind the $14.2bn committed by China and $9.6bn by Thailand, the top two sources with 33 percent and 23 percent respectively of total foreign direct investment.