Is Japan’s aid package for Myanmar part of its plan to take on China?

Tokyo will provide low-interest loans of US$413.4 million to the Southeast Asian nation to build transport infrastructure and finance SMEs

This dovetails with Japan’s aim to shift its firms’ manufacturing out of China and assemble a loose coalition of nations willing to stand up to Beijing, experts say

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Workers at a garment factory in Yangon. Photo: AFP

Published: 5:15pm, 9 Nov 2020Updated: 5:39pm, 9 Nov 2020

Japan has signed an agreement to provide low-interest loans of 42.78 billion yen (US$413.4 million) to Myanmar to build transport infrastructure, as well as financing for small and medium-sized companies, although analysts point out that Tokyo will also expect the assistance to advance its own interests in the region.

Of the total, 27.78 billion yen will be invested on a road bridge on the East-West Economic Corridor – a key economic artery that links Myanmar with Thailand, Laos and Vietnam – according to Japan’s Ministry of Foreign Affairs.

The agreement was signed last week by Ichiro Maruyama, Japan’s ambassador to Myanmar, and Maung Maung Win, the deputy minister for planning, finance and industry.

In a statement, the Japanese government said: “Since the volume of trade with Thailand, Myanmar’s largest trading partner, is expected to continue to increase, it is essential to develop the East-West Economic Corridor to enhance the efficiency of the logistics sector.”

The remainder of the funds will be provided to smaller companies to stabilise businesses that have been badly affected by the Covid-19 pandemic and assist others to expand their operations.

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