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Abe puts best foot forward in Myanmar to tap ‘last frontier’

by Maya Kaneko

Kyodo

Shinzo Abe spoke of his personal bond with Myanmar during his official visit, the first by a Japanese prime minister in 36 years, as he sought to boost Japan’s presence and tap its significant growth potential.

Pledging fresh aid worth ¥91 billion and canceling roughly ¥190 billion in debt owed by Myanmar during his talks with Myanmar President Thein Sein in the capital, Naypyitaw, Abe expressed pride in the fact that Japan has led the international community in implementing debt relief measures for the swiftly emerging country.

The trip is designed to showcase Abe’s commitment to supporting Myanmar, which has been drawing much interest from across the globe following its shift to a democratic government in March 2011. The prime minister is being accompanied by representatives from some 40 Japanese companies, including major trading houses, manufacturers, financial institutions and construction firms.

Abe emphasized that aiding the country’s nascent democratic and economic steps would benefit both sides, as Myanmar, which was cut off from the global economy during its junta decades, now requires foreign investment, technology and knowhow — all of which Japan can provide — to improve its infrastructure and accelerate the nation-building process.

Abe sees Myanmar’s needs as a perfect match with his recently unveiled policy of tripling Japan’s infrastructure-related exports to ¥30 trillion by 2020, and he vowed to serve as a “top salesman” for Japanese technologies and products during his visit to the commercial capital of Yangon on Saturday.

With an abundance of natural resources, a comparatively cheap and ample labor force and a population of around 60 million, Myanmar has been dubbed Asia’s “last frontier” and foreign businesses are dashing to grab a slice of the pie.

World leaders such as U.S. President Barack Obama, British Prime Minister David Cameron and European Union foreign affairs chief Catherine Ashton have all visited Myanmar since 2011 and lifted economic sanctions imposed when the country was under military rule.

Japan, which froze its yen loans to Myanmar 26 years ago due to its political instability and mountainous outstanding debt, also said it would resume loans to assist its continued development.

Abe is now trying to jump on the bandwagon and profit from the startling emergence of Myanmar, which was economically dependent on China, which borders it, and Southeast Asian nations while the generals were running the show.

In an apparent bid to avoid giving the impression Japan is only interested in snatching up business opportunities, Abe stressed that his administration aims to bolster bilateral ties by promoting political and security cooperation, as well as cultural and interpersonal exchanges.

Cementing a relationship with Myanmar is vital to Japan in countering China’s growing clout in the region, at a time when Sino-Japanese ties remain badly strained over the Senkakus sovereignty dispute, experts said.

Abe originally had been scheduled to attend a trilateral summit with China and South Korea in Seoul, but after it was postponed amid the Senkaku Islands imbroglio he decided to visit Myanmar instead.

The prime minister expressed his personal attachment to Myanmar, noting that both his father and grandfather — former Foreign Minister Shintaro Abe and former Prime Minister Nobusuke Kishi — had traveled to the country. Abe and his wife, Akie, who is accompanying him on the trip, are also engaged in activities to support children’s education in the country.

Toshihiro Kudo, a senior research fellow and expert on Myanmar issues at the Institute of Developing Economies, said that although Abe has lagged behind leaders of other countries in visiting Myanmar, his trip is nevertheless significant because it demonstrates how committed Japan is to supporting the country’s reform and development.

Kudo said the still limited size of Myanmar’s untapped market means investing in it hasn’t had a major impact on the Japanese economy, but that Japanese businesses dealing in infrastructure development or farm sector modernization could still cash in.

He said Japan, whose companies are increasingly seeking alternative investment destinations to China, and Myanmar, which is trying to diversify its economic partners, can establish a win-win relationship.

“When Myanmar was under military rule, countries such as China and Thailand invested in its natural resources development projects. But such investments did not spur job creation locally,” Kudo said.

Myanmar needs to boost its manufacturing sector with Japan’s help to achieve “inclusive growth” that creates employment opportunities for local workers, he said.

But Kudo added that since Myanmar is trying to gain increased access to the global economy and community, he believes its government attaches more importance to the U.S. than Japan.

“Myanmar sees Japan as a generous country with much money, but regards it only as a ‘pass point.’ It believes the United States holds the ticket to the international community,” Kudo said, describing the relationship as a “one-sided love” affair in which Japan’s affections will not necessarily be reciprocated.

Thein Sein held talks with Obama in Washington last week, becoming Myanmar’s first leader to pay a state visit to the U.S. capital in nearly 50 years. During their talks, the two leaders reaffirmed the need to further drive Myanmar’s democratization and economic reforms.