Tuesday, 28 May 2013

Japan searches for business possibilities in Myanmar

Japan is approaching Myanmar, the last frontier of Southeast Asia, in search of business opportunities.

Japanese Prime Minister Shinzo Abe visited the country from Friday to Sunday to ensure Japan's share of Myanmar's development, which is starting from scratch with untouched markets. Myanmar has inexpensive labor, is rich in resources and is strategically important.


Abe, the first Japanese prime minister in 36 years to visit Myanmar, went there with his country's checkbook open. He was accompanied by a 40-strong entourage of Japanese business people - bosses of some of Japan's top companies, including trading houses Mitsubishi Corp and Mitsui Group - in the hope of securing development-project contracts.

Then-prime minister Takeo Fukuda was the last Japanese leader to visit Myanmar, in 1977.

Abe said on Sunday that Japan is committed to offering Myanmar 91 billion yen (US$900 million) in fresh aid. Some of it will go to poverty reduction, power rehabilitation and infrastructure development, according to Japan's Ministry of Foreign Affairs. Japan also will write off about 190 billion yen in debts.

Abe needs to explore overseas areas for investment, which is one of the keys to the success of his growth strategy. On May 17, he said the latest installment of Japan's growth strategy will aim to triple infrastructure exports and double farm exports by 2020, as well as increase private investment.

Measures to promote growth constitute what Abe calls the third arrow in his policy quiver as Japan battles to end 15 years of deflation and generate sustainable economic growth. The first two arrows of his program, called "Abenomics", are large-scale bond-buying and a burst of government spending.

Abe said the growth strategy will focus on increasing domestic private investment over the next three years, tripling infrastructure exports by 2020 and doubling farm, fisheries and marine exports to 1 trillion yen by then.

Abe is trying to expand investment in Myanmar, while Japanese companies have held back from investing in recent years. They did not want to upset Japan's relations with the United States and the European Union, which had imposed sanctions on the country.

Abe's Myanmar trip follows the recent visit to Japan by Aung San Suu Kyi, the leader of Myanmar's largest opposition party, the National League for Democracy.

Since Abe's cabinet was sworn in in December, its members have been cozying up to Southeast Asia.

Taro Aso, Japan's finance minister and deputy prime minister, chose Myanmar for his first official visit abroad just a week after assuming the job. He confirmed fresh financial aid for the country and agreed to waive part of Myanmar's 500 billion yen debt.

Aso's visit set the stage for Japanese firms to gain privileged access to Myanmar as Western competitors move in slowly after years of economic sanctions on the country. At least 35 Japanese investment projects are underway in Myanmar, the biggest being plans to develop the 2,400-hectare Thilawa Special Economic Zone near Yangon, led by trading companies Mitsubishi, Marubeni Corp and Sumitomo Corp.

"One of the purposes of Japan's move is to counter China's growing influence in the country," a Japan Times editorial commented.

Japan is also investing in an economic zone in Dawei in southern Myanmar, where the largest industrial complex in Southeast Asia is on the drawing board.

source: China Daily

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