By Daniel Ten Kate Bloomberg News
Apr 20, 2012
Myanmar President Thein Sein (pictured) today begins his first visit to Japan as head of state seeking a debt- forgiveness deal that opens the way for his nation’s biggest creditor to resume financing roads, bridges and ports.
Thein Sein and Japanese Prime Minister Yoshihiko Noda will discuss a “comprehensive solution” to resolving Myanmar’s debt when they meet in Tokyo tomorrow, said Masaru Sato, assistant press secretary at Japan’s foreign ministry. Japan pledged 403 billion yen ($4.9 billion) in loans to Myanmar between 1967 and 1987, according to foreign ministry data.
The nation of 64 million between India and China wants a share of the investment that Japanese exporters have poured into neighbor Thailand, with Honda Motor Co. among companies expressing interest. Thein Sein has overseen a shift toward democracy over the past year that’s boosting the odds of re- engagement with developed nations that limited trade with Myanmar during five decades of military dictatorship.
“This is a first step” for strengthening business ties, said Yoshito Asano, director of the government-affiliated Japan External Trade Organization in Bangkok, referring to Thein Sein’s trip and the debt talks. “Many companies have an interest in Myanmar but so far there are not many concrete plans to establish factories.”
Japan will aim to finance infrastructure projects in Myanmar if the debt issue is cleared, Kimihiro Ishikane, a deputy director of Asian affairs at the foreign ministry, said on Nov. 16. Sato declined to comment on an Asahi newspaper report that Japan will forgive 300 billion yen ($3.7 billion) in yen-denominated loans.
Regional Summit
Thein Sein plans to meet Noda after a regional summit involving leaders from Cambodia, Vietnam, Thailand and Laos. On April 22, Thein Sein will visit power plants run by Tokyo Electric Power Co. (9501) and Electric Power Development Co., known as J-Power, according to Japan’s foreign ministry.
Yangon, Myanmar’s largest city, had the cheapest wages among 31 cities in Asia, according to a Jetro survey last year. Workers in the former capital earned less than $2 per day on average, compared with $4 in Cambodia, $5 in Vietnam and $14 in Thailand, it said.
Italian-Thai Development Pcl (ITD), Thailand’s biggest construction company, is pushing Japan to provide financing for an $8.6 billion deep sea port and industrial estate in Dawei, a Myanmar coastal town less than 300 kilometers (186 miles) from Bangkok. The company has named Mitsubishi Corp. and Mitsui & Co. as potential investors.
Top Investors
Japan, which occupied Myanmar during World War II, has invested $10 million in the country since 2008, compared with more than $13 billion in Chinese outlays, according to the Naypyidaw-based Central Statistical Organization. China, Hong Kong, Thailand and South Korea account for nearly all the $26 billion in foreign investment in Myanmar in that time, the data show.
Honda is interested in building a motorcycle plant in Myanmar, Hiroshi Kobayashi, president and chief executive officer of Asian Honda Motor Co. (7267), told reporters in Thailand on March 31. NTT Data Corp., the Tokyo-based provider of network- system services, said yesterday it plans to form a subsidiary in September that will have as many as 500 employees by 2017.
Japan initiated regular meetings with leaders of nations along the Mekong River in 2009. The Mekong River runs through Laos, Myanmar, Thailand, Cambodia and Vietnam from its source in China’s Tibetan plateau, providing food, water and transportation to more than 60 million people.
China has overtaken both the U.S. and Japan in trade with the Mekong River nations over the past decade. Commerce between China and the Mekong countries increased to $90 billion in 2010, compared with $73 billion for Japan and $55 billion for the U.S., according to United Nations statistics.
To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net
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