Myanmar gets big development backing from Japan

Japanese Prime Minister Shinzo Abe. Japan offers its assistance to further Myanmar's social and economic progress in the form of loans, grants and debt relief. Photo by: 多摩に暇人 / CC BY-SA

Millions of dollars in development assistance was the main highlight of Japanese prime minister Shinzo Abe’s three-day visit to Myanmar, as the country continues on its path to recovery after decades of military rule.

Abe announced 51 billion Yen ($504 million) in new development loans for Myanmar after a meeting with President Thein Sein on Sunday. The focus of assistance is infrastructure development (road, electricity and water supplies), power station maintenance and the construction of the 6,000-acre Thilawa special economic zone in the south of the country. The loans will be repayable for a period of 40 years at 0.01 percent interest.

The first Japanese prime minister to visit Myanmar in 36 years also revealed a new aid package of about 2.4 billion Yen to boost water management in Yangon, Myanmar’s largest city, and a scholarship program for young administrators supervising the nation’s social and economic progress.

During his trip, Abe vowed on behalf of Japan to extend “all possible assistance” to help speed up Myanmar’s social and economic recovery.

To further this pledge, the Japanese leader confirmed the pardon of up to 176.1 billion Yen of Myanmar’s debt, paving the way for Japan to grant more concessional ODA loans and thus scale up its bilateral cooperation.

While Japan’s heightened presence in Myanmar has been widely-criticized as a move to edge out China as the most dominant figure in Myanmar’s economy, a Japan International Cooperation Agency official noted that while “all bilateral aid programs are influenced by domestic political considerations,” it is not the main driver of Japan’s program in Myanmar.

Masahiko Tanaka, JICA head in Myanmar, said in a statement that “Myanmar is starting from a position of huge infrastructure and human resource gaps, deficiencies in social and other public services, and weaknesses in public institutions.”

“This is where a big infusion of aid can be part of the solution. It can boost infrastructure investment significantly, and help with a more rapid build-up of capacity in both the public and private sectors,” he added.

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About the author

  • Johanna Morden

    Johanna Morden is a community development worker by training and a global development journalist by profession. As a former Devex staff writer based in Manila, she covered the Asian Development Bank as well as Asia-Pacific's aid community at large. Johanna has written for a variety of international publications, covering social issues, disasters, government, ICT, business, and the law.