Eager to make headway into Myanmar as it democratizes and
opens its economy to foreign participation, this country has made a commitment
of almost $20 billion for Myanmar in the form of debt write-offs, aid and
investment over the last year. This whopping sum includes investment into a
special economic zone in Thilawa, cheap loans for the building of
infrastructure around this area, and lending for a deep sea port and a special
economic zone in Dawei, which expected to be the largest industrial project in
all of Southeast Asia.
The country pouring all of this money into Myanmar is Japan.
In all its years of isolation, investing in Myanmar was almost the sole
preserve of China. Through the sanctions imposed on the country, only China
(and to some extent, India) engaged directly and openly with the military
junta. But that is fast beginning to change and Japan is at the forefront of
economic initiatives being taken in Naypyidaw.
Japan’s near impeccable reputation as an honest, genuine
stakeholder and donor and one with historically warm ties with Myanmar have
meant it is one of the countries looked upon most favourably. The Japanese have
maintained relations with the junta through Myanmar’s decades of isolation and
Japan was never party to economic and financial sanctions imposed on Myanmar as
several other Western powers were.
China has had a first mover advantage and has, by far, been
the largest foreign investor in Myanmar over the last two decades. It also
exercises significant influence in the country, and it is believed Myanmar’s
rulers are wary of relying too much on Chinese assistance and investment for
development and fear becoming a satellite state.
As such, over the last year and a half, Myanmar has begun
making steady overtures towards Japan, which in turn has obliged in kind. At a
time of rapidly increasing Chinese clout globally, it is not surprising Japan
wants to enhance its own presence in what is a key region. Myanmar is of
strategic importance as it is sandwiched between China, India and Thailand, key
Asian economies. Moreover, it has a long coastline, giving it direct naval
access to trade routes. Most importantly, Japan wants to limit China’s sphere
of influence.
Seeking participation in Myanmar’s economy, too, is logical for
Japan. The country is well-endowed in metals, gemstone, natural gas and other
natural resources. It also has a sizeable population of 48 million, making it a
large market for goods as well as a source of cheap labour, important for Japanese
companies especially as wages in the rest of the traditional production bases
in developing Asia are rising. Hence, the Japanese private sector too is an
active stakeholder in the special economic zone in Thilawa.
Ever since most economic sanctions were lifted following the
release of Aung San Suu Kyi in November 2010, countries have flocked to Myanmar
to grab a slice of the pie. And as pretty much the last remaining frontier in
Asia, the country is seeing oodles of interest from Western and Asian powers
alike – something Myanmar’s government is not oblivious to.
Notwithstanding the ethnic violence against the Muslim
Rohingya minority, Myanmar has taken rapid strides towards democratisation and
indulged in a gradual dismantling of the massive powers placed in the hands of
the military.
This is a window of opportunity that Myanmar cannot afford
to let go of, and the current administration has gone into a PR overdrive to
convince potential investors and donors of democratic progress. In the week
gone by, President Thein Sein embarked on his first Europe tour for this very
purpose.
However, it is likely that any development aid from Western
powers will still come with strings attached (and will likely be quite trivial
in value), while Asian powers such as China and now Japan do not seem to have
such strong moral concerns (and significantly larger cheque books). It isn’t hard to second guess which way the
wind will blow in Myanmar.
(This was a column printed in the Himalayan Times on 3 March 2013)
No comments:
Post a Comment