Staff writer

Japan will provide between 500 million yen and 700 million yen in grant-in-aid to help Myanmar increase production of alternative crops to opium along its northeastern border with Thailand and Laos, Foreign Ministry sources said April 8.

The decision to provide the official development assistance -- the first full-scale grant-in-aid given to Myanmar in nearly 2 1/2 years -- will be formally approved at a Cabinet meeting early next month, the sources said.

The sources said the funds will be used to purchase tractors and fertilizers for farmers in an opium-producing area in northeastern Myanmar. The so-called Golden Triangle region, comprising parts of Myanmar, Thailand and Laos, is notorious for cultivating huge amounts of the crop.

The sources said that although Japan also provided 1 billion yen in grant-in-aid in March 1995 to help Myanmar increase agricultural production in areas inhabited by ethnic minorities, the use of that aid was not limited to the country's northeastern opium-producing area.

The sources indicated that the 1995 aid was not properly used by the government and said that Japan -- in cooperation with the United Nations Drug Control Program -- will strictly monitor the use of new aid money to ensure that it is not diverted to other purposes.

The aid will be the largest grant-in-aid given to Myanmar since October 1995, when Tokyo provided 1.6 billion yen to the country's capital, Yangon, for repairs to a nurse training school.

Mutsu Ogawara seeks debt delay

The semigovernmental Mutsu Ogawara Development Inc. plans to ask more than 30 banks to postpone annual interest payments of 8 billion yen on its loans for two years because of serious and ongoing financial problems, sources close to the company said April 8.

Mutsu Ogawara is a firm jointly established by the Aomori Prefectural Government, the central government and the Japan Federation of Economic Organizations (Keidanren). The firm was established in 1971 to develop a petrochemical complex in Aomori Prefecture, but the project never got under way due to a series of oil crises that began in the early 1970s. The firm has since been trying to utilize its 2,800-hectare plot of land, but more than half of the property remains unsold.

Mutsu Ogawara's interest burden has been mushrooming and it has now accumulated debts of 230 billion yen. Lacking a feasible large-scale project for the property, the company faces the danger of bankruptcy. Although Keidanren officials say that nothing concrete has been decided, they have hinted that they will try to draft a detailed request for ways to reduce the firm's burden by June by postponing repayment.

Keidanren Chairman Shoichiro Toyoda, who also serves as the chairman of Mutsu Ogawara Development, is reportedly trying to work out a solution before he completes his term in May. Keidanren has already assigned a group of its executives, including Toyoda and some of the vice chairmen, to seek ways to support the ailing firm.