News / Asia

Japan Becoming Major Economic Force in Burma

Japanese Prime Minister Shinzo Abe and Burma's President Thein Sein, take a salute of the honor guard at Presidential Palace in Naypyitaw, Burma, May 26, 2013.
Japanese Prime Minister Shinzo Abe and Burma's President Thein Sein, take a salute of the honor guard at Presidential Palace in Naypyitaw, Burma, May 26, 2013.
Daniel Schearf
— Japanese Prime Minister Shinzo Abe has forgiven billions of dollars of Burmese debt and promised new aid.  Analysts said despite China being its largest investor, Burma is increasingly looking to Japan as the dominant economic force.

During the first visit by a Japanese prime minister in 36 years, Shinzo Abe not only forgave Burma's debt, but also pledged a new development loan.

Japan cancelled $1.74 billion in debt and on Sunday agreed to lend Burma over half a billion dollars more for infrastructure and power projects.

Japan had earlier written off debts of more than $3.5 billion owed by Burma.

Speaking via Skype, economics professor Sean Turnell of Macquarie University in Sydney said Japan's serves its own self-interest by forgiving Burma's debt.

"There is a huge amount of money that the government of Japan is willing to advance," he said.  "And many Japanese firms, particularly in the areas of infrastructure and so on, who are only too glad to win contracts to do development work in Burma.  So, I think that is number one.  Secondly, though, of course, there's the geo-political aspect.  Japan, like many countries have been worried the extent to which Burma has moved increasingly under China's shadow.  And, of course, we know that there is a broader story of China and Japan in the region.  So, I think we would have to fit it as part of that."

Part of the new loan will go toward electricity development at the Thilawa Special Economic Zone at a port near Rangoon. 

The SEZ is Japan's largest investment project and one that economists say is likely to have a major impact because of its proximity to Burma's largest city.

Despite the development plan, Japan's few-hundred-million dollars in investments ranks far below China's more than $14 billion. 

Like China, Japan did not take part in Western sanctions against Burma's former military government.  But, Tokyo did scale back loans for development and major investments.

Meanwhile, China invested heavily in hydropower dams, mining projects, and an oil and gas pipeline stretching from western Burma to the Chinese border. 

But, unlike Japan, most of China's investments were made in shady deals under the former military government. 

Many of the projects are controversial because of their environmental and social costs and have led to protests and hostility against the Chinese. 

Turnell said because of the way it is investing, Japan's impact is starting to eclipse that of China's. 

"Again, the Chinese investment is mostly resource and energy projects.  It is mostly about taking stuff out of the ground or taking energy out of Burma and into China, with China as the main consumer.  But, if we look at what Japan is about it is essentially projects that will have a deep impact within Burma.  It is not just simply about taking out resources.  It is actually planting infrastructure and institutions in place.  But, similarly, of course, Japan is heavily involved in some the areas of reform," he said.

Thailand Prime Minister Yingluck Shinawatra was in Japan last week and encouraged investment in its Dawei project in Burma.

The $8.5 billion deep sea port and industrial zone is to be built along the Thai border, but the project has struggled to get funding.

If finished, it would be the largest industrial zone in Southeast Asia and would cut transport time for goods and improve shipping security.

But analysts said Japan has approached the mega-project cautiously as there is a lot of money needed and Thailand stands to benefit the most. 

Thin Aung is director general of the Dawei project at Italian-Thai Development, the company in charge.  Speaking via Skype, he said while they have surveyed the land for the project, the only construction work so far is on a road between Thailand and Burma, also known as Myanmar.

"So, once the road is complete then we have a better road link to Thailand and Myanmar and then we start pushing on the port.  Meanwhile, small industries may be set up at the border or along the road," he said.

Thin Aung said although the road will not likely be finished until 2015, they expect some small factories to begin building in the coming months.

Meanwhile, Ital-Thai is exploring the possibility of investments in the Dawei project from countries other than Japan.

Thin Aung said they plan to discuss opening up the project to various companies, including from the United States, China, the European Union, and Russia during a June meeting in Bangkok.

You May Like

China Investigates Former Powerful Security Chief

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, under investigation for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.

AppleAndroid