Almost a year after it ended half a century of military rule, Myanmar is slowly taking its place back in the world. Japan is one of the first countries to extend its lending hand by providing its first low-interest, long-term government loans to Myanmar in over three decades, amounting to $615 million.
The announcement of the loan will be made by Japanese Prime Minister Yoshihiko Noda when he meets with Myanmar’s President Thein Sein at the ASEAN Summit in Cambodia. The money will be used for three projects which includes infrastructure for a special economic zone outside former capital Yangon, which will be led by a consortium of Japanese companies including Mitsubishi Corp., Sumitomo Corp. and Marubeni Corp. Repair work on a thermal power plant near Yangong and infrastructure development in 14 other provinces are the two other projects to be covered by the loan.
These projects paves the way for Japanese companies to move into the country, even as China is trying to exert influence and other projects with Myanmar. Japan is especially interested in the Mekong region, reportedly a resource-rich region, which is perfect for its export-reliant economy.
Despite the previous Western ban on Myanmar, Japan continued trade ties and dialogue with them in the past years, citing that closing the doors totally to the military junta could push it closer to China. Earlier this year, Japan waived 300 billion yen of the 500 billion yen Myanmar debt.
The United States recently ended its import and trade ban on Myanmar, signalled by a historical landmark trip by newly re-elected President Barack Obama. The European Union, Canada and Australia have also suspended their sanctions. World Bank, the Asian Development Bank and major creditor nations are set to announce next year that they are waving debts by Myanmar.[ via AFP ]