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Aung San Suu Kyi

Japan competes with China for Myanmar influence with 800 billion yen aid deal

PUBLISHED : Wednesday, 02 November, 2016, 8:53pm
UPDATED : Wednesday, 02 November, 2016, 10:27pm

Japan will provide aid worth 800 billion yen (US$7.73 billion) to Myanmar over five years as it competes for regional influence with the country’s biggest trading partner China.

Prime Minister Shinzo Abe made the announcement at a joint news conference in Tokyo with Myanmar’s de facto leader Aung San Suu Kyi on Wednesday. Myanmar needs Japanese investment and robust bilateral ties as a counterweight to its largest trading partner, China, where Suu Kyi recently paid a state visit.

I want to again express my respect for the nation-building [you] are carrying out under the universal values we share
Prime Minister Shinzo Abe

“As a friend of Myanmar, Japan will give the new government our full support across the public and private sectors,” Abe said at the outset of the talks in Tokyo.

The nation-building efforts are expected to include infrastructure building and cooperation in the energy sector.

“I expect this will contribute to the country’s development,” Suu Kyi said at a joint press conference after the meeting at the Akasaka Palace state guest house. Suu Kyi arrived on Tuesday on a five-day visit to Japan, her first visit to Asia’s second-largest economy since the pro-democracy party she leads took power in March following a landmark election.

“I want to again express my respect for the nation-building [you] are carrying out under the universal values we share – freedom, democracy, human rights and the rule of law,” Abe said, adding that Japan hopes to use Suu Kyi’s visit as an opportunity to “dramatically develop” bilateral ties.

“As we in Myanmar carve out a new page in our history, I believe that Japan will continue to walk side by side with us as a good friend and trustworthy partner,” Suu Kyi replied.

Abe announced that Japan will give around 40 billion yen in aid over five years to support reconciliation between Myanmar’s ethnic minority groups.

Suu Kyi has placed importance on the issue, convening in August the “21st Century Panglong peace conference” for representatives to air their grievances.

Japan will also provide up to 10.8 billion yen in loans for refurbishing two ageing hydroelectric power plants, the Japanese Foreign Ministry said following the talks. Demand for electricity is expected to rise in tandem with the country’s development.

At an event with members of Japan’s Myanmar community earlier in the day, Suu Kyi said Myanmar’s economy “needs to be developed in every sector,” with a slowdown in global growth adding to the country’s economic difficulties. “We need a lot of investment and many economic experts with fresh ideas,” the Nobel Peace Prize laureate said.

Japanese officials have described Myanmar as the “final frontier within the Association of Southeast Asian Nations,” citing its potential given its natural resources. Japan’s offers of assistance to Myanmar also reflect its rivalry with China for economic and political influence among Southeast Asian nations, particularly the less developed countries of the Mekong region.

In August, Suu Kyi visited China on her first overseas trip outside Southeast Asia since her party’s election victory. She discussed Chinese investment in infrastructure development in Myanmar with Chinese President Xi Jinping and Premier Li Keqiang.

Specifically, she discussed the suspended Myitsone dam and other controversial hydropower projects with Chinese officials. The suspension of the Chinese-backed, US$3.6 billion project by her predecessor, Thein Sein, in 2011 over environmental and other concerns has been regarded as a historic turning point in Myanmar’s relationship with China.

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Diplomatic observers also said Beijing felt reassured by Suu Kyi’s decision to go to China ahead of her trip to the United States. Observers also noted that Suu Kyi refrained from criticising China over its human rights violations, and maintained a neutral stance on the South China Sea disputes.

Over the years, China has invested heavily in the oil and gas sector in Myanmar, with bilateral trade reaching more than US$10 billion last year, state media reported.

Suu Kyi, who holds the dual positions of state counsellor and foreign minister, last visited Japan in April 2013 when she was an opposition member of parliament.

Additional reporting by Shi Jiangtao