Staff writer Nearly half of the approximately 270 billion yen in Japan's outstanding official yen loans to Myanmar have gone sour.As of March 31 last year, the final day of fiscal 1998, Japan's outstanding yen loans to developing countries totaled 9.8 trillion yen, of which 272.5 billion yen was being held by Myanmar, according to the Japan Bank for International Cooperation. Of the total outstanding yen loans to developing countries at that time, 377.8 billion yen had been in arrears for six months or longer, according to the JBIC, a government-affiliated aid organ created in October through a merger of the Overseas Economic Cooperation Fund and the Export-Import Bank of Japan. According to government sources and people familiar with the matter, the amount of arrears on Myanmar's huge official debts to Japan is continuing to rise sharply and has already exceeded the 130 billion yen level, compared with the 94 billion yen level four years ago. This means that Myanmar is responsible for about one-third of the total amount of arrears on official debts owed to Japan by developing countries and that nearly half of the 272.5 billion yen in Japan's outstanding loans to Myanmar have gone bad. For its part, the JBIC refuses to give the names of developing countries with overdue official loans, let alone a country-to-country breakdown. "We have a long-held policy of not making public which country owes Japan overdue official debts and how much," a JBIC spokesman said. "That's partly because doing that might hurt the credit of countries with such debts and partly out of foreign-policy consideration." Until fiscal 1998, Myanmar had continued to repay several billion yen or more in arrears to Japan each year. But no such repayment has been made during fiscal 1999, which ends on March 31, further adding to the Southeast Asian country's ballooning overdue official debts to Japan. In accordance with a 1978 resolution by the United Nations Conference on Trade and Development, Japan has automatically provided the same amount of money Myanmar repays, in the form of grant-in-aid, after an interval of only one or two months. The UNCTAD resolution urges aid-donor countries to forgive official debts owed them by the poorest of Third World countries. The fact that Myanmar has stopped making repayments despite this arrangement indicates just how tight its financial bind is. Minoru Kiryu, a professor of economics at Osaka Sangyo University and a leading expert on Myanmar affairs, said Myanmar's foreign currency reserves are extremely scant. "The Myanmar government's fiscal condition is so severe that it has to run just to keep from going bankrupt." Myanmar has been shunned by many sectors of the international community since 1988, when the military took power in a coup. The country's military junta, which now refers to itself as the State Peace and Development Council, continues to refuse to accept the results of 1990 national elections in which Nobel Peace laureate Aung San Suu Kyi's National League for Democracy won a landslide victory. The United States and other industrialized countries in Europe have toughened economic and other sanctions against Myanmar in recent years in protest at the military regime's violations of human rights and democratic principles, including the continued crackdown on the prodemocracy movement led by Suu Kyi. Since the 1988 coup in Myanmar, or Burma as the country was once called, Japan has also frozen fresh yen loans and grant-in-aid, except those for humanitarian purposes and debt-relief under the UNCTAD resolution. In addition to the economic sanctions, the Asian economic crisis that erupted in Thailand in the summer of 1997 and spread through much of the region dealt a serious blow to Myanmar's economy, which saw a sharp decline in foreign investment, especially from its fellow ASEAN members. The Association of Southeast Asian Nations admitted Myanmar immediately before the Asian economic crisis occurred.
