Japan Pledges Billions for Myanmar’s Development

Money includes expected investment by private companies, government grants and loans by government-affiliated institutions

Shinzo Abe and Aung San Suu Kyi in Tokyo on Wednesday. ENLARGE
Shinzo Abe and Aung San Suu Kyi in Tokyo on Wednesday. Photo: Eugene Hoshiko/Press Pool

TOKYO—Japanese Prime Minister Shinzo Abe on Wednesday pledged ¥800 billion yen ($7.7 billion) in public and private support for Myanmar’s development in a meeting with de facto leader Aung San Suu Kyi, hoping to lift the democratically elected government there.

The figure includes expected investment by private companies as well as government grants and loans by government-affiliated institutions. It also includes ¥40 billion to help ethnic minorities lift their living standards and facilitate reconciliation after decades of conflict.

“Peace-building and national development are inseparable,” said Ms. Suu Kyi, a 71-year-old Nobel peace laureate, in a joint news appearance with Mr. Abe.

Her visit to Tokyo, the first since her National League for Democracy came to power in March, followed visits to China, India, the U.K. and the U.S.—major players in regional geopolitics. All are hoping that the opening of Myanmar, which has a population of 54.3 million according to the United Nations, in recent years could give their companies opportunities.

Mr. Abe said Japan would accelerate the development of the Thilawa special economic zone, a Japanese-led 2,400-hectare (5,900-acre) industrial park on the outskirts of Yangon, Myanmar’s largest city. The 400-hectare first stage has attracted 78 companies from 15 countries so far.

Among them are machinery maker Kubota Corp., which hopes to sell tractors and combine harvesters to rice farmers in Myanmar, and Wacoal Corp., which began producing bras for export to Japan and Thailand in September.

Myanmar wants more Japanese companies to come, but lack of power supply remains an obstacle. Myanmar is a producer of natural gas, but it is mostly exported to China and Thailand, while its coal is of a low-grade variety not suited for power generation.

Myanmar business leaders will be joining Ms. Suu Kyi in the latter leg of her five-day visit, which concludes Saturday. “The dispatch of the mission is a strong message from Myanmar that it wants to partner with Japanese companies,” said Toshihiro Mizutani, an expert on Myanmar at the state-backed Japan External Trade Organization.

Japanese businesses have been watching whether the government led by Ms. Suu Kyi would continue the economic opening begun by former President Thein Sein and his military-led government.

Tokyo’s closeness with Mr. Thein Sein reportedly irked Ms. Suu Kyi, and a falloff in approvals for foreign investment this year further stirred concern in Japan.

But Ms. Suu Kyi’s visit to Washington in September and the lifting of U.S. economic sanctions in the following month have generated renewed optimism. Last month, Myanmar enacted a long-awaited investment law, which is expected to simplify the approval process for foreign investment greatly.

Mr. Abe said the two countries share basic values such as democracy and fundamental human rights and pledged that “Japan will fully support” Ms. Suu Kyi’s goals.

Write to Mitsuru Obe at mitsuru.obe@wsj.com


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