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

India PM Modi's party distances itself from religious conversions

BJP under fire for being slow to rein in hardline affiliate groups allegedly trying to promote a Hindu-dominant agenda by luring Muslims and Christians to convert to Hinduism More

Anti-Whaling Group Found in Contempt of Court

Radical environmentalists who threw acid and smoke bombs at Japanese whalers in the waters off Antarctica continue their campaign to disrupt Japan's annual whale hunt More

UN's Ban Urges End to Discrimination Against Ebola Workers

Ban was speaking in Guinea on the second day of a whistle-stop tour aimed at thanking healthcare workers of the countries at the heart of the epidemic 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.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid