Japanese Prime Minister Shinzo Abe yesterday announced nearly US$8 billion in aid, loans and investment to promote development and reconciliation in Myanmar after talks with its de facto leader Daw Aung San Suu Kyi.





The 800 billion yen ($7.7 billion) package from both the public and private sectors is to be spread over five years, Mr Abe said.

“This is designed to help Myanmar’s nation-building through its balanced development,” Mr Abe told reporters in a joint appearance with Daw Aung San Suu Kyi after their talks.

A total of 40 billion yen is earmarked to promote amity in areas inhabited by ethnic minorities, which has been emerging from years of military dictatorship and ethnic conflict.

“With this aid, it is our hope that the fruits of reconciliation will be spread across Myanmar and be further promoted,” Mr Abe said.

Daw Aung San Suu Kyi repeatedly thanked Japan for helping her country.

“Such assistance will help Myanmar build peace and develop itself,” said Daw Aung San Suu Kyi, who arrived in Tokyo on November 1 for a five-day visit.





The state counsellor and foreign minister has pursued whirlwind diplomacy since her party took power six months ago, including visits to Southeast Asian neighbours as well as key allies China, the United States and India.

Her travels are aimed at attracting economic development and infrastructure aid to rebuild the resource-rich country after decades of military rule, economic isolation and civil conflict.

Daw Aung San Suu Kyi’s five-day trip to Japan is but the latest move in a relationship that can benefit both countries as their relationship continues to deepen, analysts say.

While in Japan, the state counsellor is expected to discuss development projects and the peace process, including the conflict ravaging northern Rakhine State, which has been subjected to a media blackout within Myanmar.

Daw Aung San Suu Kyi did not touch on the military operations in northern Rakhine State during the press conference, but a Japanese official briefing reporters on her talks with Mr Abe paraphrased her as saying Myanmar would deal with the problem under the law.

Though the state counsellor has already visited China, the United States and India since taking power following elections a year ago, neither Japanese nor Myanmar sources have commented on suggestions that an earlier visit would have better reflected the importance of Japan to Myanmar’s economic development.

Analysts have generally welcomed the visit, citing the differences between Japanese and Chinese investments in Myanmar. Japan is not seen as an exploiter, and tends to invest in large-scale manufacturing and infrastructure rather than extractive industries.

Political and economic analyst U Than Soe said Japan had a good record in investing in Asia, and offered Myanmar significant opportunities that Nay Pyi Taw should be prepared to seize.

“Myanmar has a large workforce and plenty of land. Daw Aung San Suu Kyi should invite investments from Japan during her visit,” he said.

In order to create a more welcoming environment for such investment, Myanmar would be expected to strengthen its national institutions and legislative frameworks, improve its infrastructure, resolve land ownership disputes equitably and, perhaps most important, restore peace to the country as a whole.

The recent decision of US President Barack Obama to lift US sanctions has also highlighted the need for Myanmar to reinforce its banking and financial sector. Long-term international loans should be used to create a more competitive infrastructure, in terms of roads, bridges, water and electricity, says U Than Soe.

The Myanmar Investment Commission has already approved 88 direct investments from Japan worth a total of US$674.227 million. Of these, 77, worth $571.532 million, are already in operation. A further 19 Japanese businesses have invested indirectly via other countries, to the extent of $983.483 million.

Additionally, there are 24 investments in Thilawa special economic zone that do not fall under MIC jurisdiction, worth $251.25 million, and further inputs are expected in the case of Dawei SEZ, in which Japan also has a significant interest.

“Japan operates Dawei port,” said Daw Aye Aye Win, a director general in the Ministry of Industry. “We’ve paid compensation for land and created job opportunities there. We look forward to further improvements across the country.”

Japan has upgraded railway lines, water supply networks and other infrastructure in Myanmar, supported the improvement of laws and policies in industry, improved human resources through training programs and provided loans for small- and medium-sized businesses.

The Japan International Cooperation Agency also drew up the Master Plan for the country’s development in 2011, when it began to offer Official Development Assistance (ODA) to Myanmar. According to the SME development department, Japan will lend K5 billion at 0.01 percent interest, of which Myanmar has already received K3.5 billion, with the rest to come next year. SMEs are at the heart of the Myanmar economy, said Daw Aye Aye Win.

“As our country continues to develop its industrial sector, links with Japan can only strengthen. Now there is a gap, and we must continue to improve our small and medium enterprises,” she said.

Most of the factories in Myanmar are Japanese-owned, and located in Thilawa port.

U Maung Maung Lay, of the Merchants and Industrial Entrepreneurs Association, said Japan had greatly assisted Myanmar with loans.

According to the Ministry of Commerce, Japan-Myanmar trading amounted to $800 million in the 2011-12 fiscal year, rising to a high of $2305 million in 2014-15. Last year, it fell to $1845, spurring fears of a further reduction this year.

Finance Minister U Kyaw Win is set to lead a group of 32 entrepreneurs in banking, construction and other fields to discuss the situation with their Japanese counterparts during the Tokyo visit.

Translation by Win Thaw Tar and Khine Thazin Han