The military coup and the following turmoil in Myanmar are tearing the country apart. Having limited economic relations with Myanmar, sanctions by the Europeans and the United States have had little to no effect on the course of events so far.

As it was during the previous coup there in 1989, which led to two decades of rule by the military junta, Japan has been choosing a middle-of-the-road approach between the human rights advocates of the West and the geostrategic realists in China. Japan’s economic weight and diplomatic trust in Myanmar should be wisely leveraged in order to both dissuade the military from invoking further violence and to check against Beijing’s opportunistic and unilateral interference in Myanmar.

Japan’s foreign minister has announced that the country is suspending new approval of official development assistance (ODA) to Myanmar after the recent coup. The suspension does not apply to disbursements of previously approved ODA project funding. Humanitarian assistance projects through nongovernmental organizations using the Japanese government budget are not affected by the recent decision.

Tokyo’s rationale to stay committed to Myanmar’s development is anchored in the belief that democratization needs a foundation of solid economic development and that the absence of other economic partners will simply consign Myanmar’s future to China as the single willing donor to that nation.

The recent coup was clearly the military’s response to a fear that the ruling party led by Aung San Suu Kyi would force a constitutional reform that would reduce the power of the military in politics. The reform plan also included Myanmar’s transition to a federal system, which would significantly increase the autonomy of local states, possibly at the expense of the nation’s already fragile unity. Myanmar’s military (the Tatmadaw) viewed Suu Kyi’s appeal to ethnic groups through the decentralization plan with suspicion and bitterness.

ASEAN leaders met with Chinese Foreign Minister Wang Yi, inviting China to reign in on the ongoing crisis in Myanmar. This is clearly a loss of a “diplomatic score” for Japan. China is not qualified to be an honest broker in Myanmar, given its history of interference in that country’s ethnic conflicts post-independence.

China has played both sides — the Tatmadaw and the ethnic rebels along its national border with Myanmar — through the supply of arms and economic assistance. Beijing has a stake in maintaining the prolonged, low-level ethnic conflicts inside the country. It hopes to exploit the situation and gain leverage in negotiations with Myanmar over resource procurement and strategic uses of the latter’s territory, such as with gas and oil pipelines.

While ASEAN countries’ consultation with China shows the group’s desperation, Beijing has been blocking any mention of sanctions in even the lowest of the United Nations Security Council statements.

Desperate Myanmar citizens in Japan, together with an international nongovernmental organization, Human Rights Now, released an open letter questioning the Japanese government about its seemingly lukewarm stance and actions on Myanmar. Japan’s joint chief of defense joined his international counterparts in denouncing the Tatmadaw’s use of force against its own citizens, while the Japanese ambassador in Yangon met with the military-appointed “foreign minister” of Myanmar, U Wunna Maung Lwin.

Both the military and the organizers of the spontaneous and grassroots, but poorly organized, Civil Disobedience Movement (CDM) are imposing tests of allegiance on the civil servants and other citizens of Myanmar, tearing apart the country’s fragile social fabric. The announcement by three ethnic rebel groups that they will provide protection for CDM participants from military retribution is causing further concern within the junta that a civil war may break out at some point.

As Hunter Marston, a research fellow with the Honolulu think tank Pacific Forum, argues: “Myanmar is not on the verge of civil war. It has been locked in many cross-cutting civil wars for decades dating back to independence in 1948. What’s new & alarming is that they could all resume at once.”

Japan pledged ¥168.96 billion ($1.54 billion) in ODA loans in 2019 and ¥72.78 billion in 2020 to Myanmar. Tokyo has not yet suspended disbursement of the funds. Some of the ODA infrastructure development projects are slated for rural areas of Myanmar as part of the the country’s peace building efforts. Still, the majority of the aid is earmarked to go to projects in the Yangon metropolitan area.

Smaller grants, technical assistance and the disbursement of other funds through nongovernmental organizations are also geared toward more directly addressing rural development issues and human resource capacity building. While the Japanese government is keen on continuing these smaller projects, the Tatmadaw may disallow their continuation if the bigger disbursements of ODA loans are suspended.

Cabinet Secretary Katsunobu Kato was quoted as saying the Japanese government “has no provision to invoke sanctions in direct and explicit connection to human rights issues.” The comment illustrates what may be an attempt by the government at maintaining a delicate balancing act and may mask an implicit attempt to leverage ODA funding to nudge the Tatmadaw into seeking an honorable exit from the ongoing crisis.

While the disbursements of funds for previously approved ODA projects have not officially been suspended, they could be delayed for reasons other than human rights violations if the situation deteriorates in Myanmar.

The call for solidarity by many in the West for a unified sanction effort against the Tatmadaw and the Japanese government’s attempt to traverse the complex patchwork of inner conflicts in Myanmar and the broader geopolitics of the surrounding region are complementary.

Explicit and water-tight application of universal sanctions against the junta will arbitrarily frame the multifaceted conflict in Myanmar into a binary one in which China ultimately wins. Without Japan’s positive inducements through ODA projects and implicit (not explicit) pressure behind diplomatic face saving, the West’s negative inducements through sanctions and explicit criticism will only push Tatmadaw into China’s embrace.

To be sure, Tokyo’s middle-of-the-road approach will not immediately solve the ongoing crisis. However, it is likely to tame the military junta’s behavior and underpin Myanmar’s integrity.

Time is on the side of the CDM. The prolonged confrontation against peaceful protests will likely impact the morale of lower-ranked soldiers. The sanctions have forced Tatmadaw-owned businesses to raise funds through the selling of stocks to rank-and-file soldiers in what can only be likened to a pyramid scheme. Impatient criticism against Japanese diplomacy, however, will forfeit the greatest leverage Japan can utilize to help put Myanmar back on the democratic path.

Yoichiro Sato is a professor at Ritsumeikan Asia Pacific University.

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