TOKYO — Japan announced a plan Thursday to restart yen loans to rapidly
reforming Myanmar, as Tokyo steps up efforts to help bring the once-pariah
Southeast Asian nation into the fold of the global economy and benefit from its
high economic growth potential.
"Japan is planning to resume
its full program in Myanmar with yen loans to help support Myanmar's
sustainable economic development...at the earliest possible timing next
year," Japanese Finance Minister Koriki Jojima said in his opening remarks
at a meeting of international officials on Myanmar's overdue debt.
Mr. Jojima offered no hints on
the size of potential loans, but said Japan wants to help Myanmar in areas such
as electricity and road rehabilitation, rural development and improvement of
port facilities.
The gathering represents a
stepped-up effort by host country Japan to bring major nations a step closer to
a deal to address the issue of Myanmar's international arrears. Those overdue
debts have long hindered inflows of new funds needed to reinforce the Southeast
Asian state's growth prospects and embryonic democratization.
"It is high time the
international community join efforts to underpin reform by Myanmar, and
reintegrate Myanmar as one of its members," Mr. Jojima said.
While no comprehensive deal was
expected at the meeting, the event is drawing attention. Many international
investors see Myanmar—a country of 60 million people—as a potential source of
raw materials and a possible large consumer market after a series of reforms
implemented in the past year, following the nation's long isolation under a
military dictatorship.
But economic sanctions by the
U.S. and others since the late 1990s have hindered Myanmar's growth. It still
lacks some of the most basic infrastructure needed to rival other manufacturing
nations in Southeast Asia, such as Cambodia, hence its needs for funding from
outside.
Japan will lead the world by
carrying out its planned debt relief for Myanmar in January through a bridge
loan and a write-off, Mr. Jojima said.
Myanmar's arrears with Japan
amount to about ¥500 billion ($6.4 billion), the biggest chunk of the overdue
debt Myanmar owes to the rest of the world, according to estimates by Japan's
finance ministry.
Mr. Jojima also said Japan
intends to offer a $900 million bridge loan through a government-linked bank to
settle Myanmar's arrears with the World Bank and the Asian Development Bank.
The step, combined with Japan's planned debt-relief for Myanmar, would
eliminate most of the Southeast Asian nation's overdue debt and empower the
international and regional lenders to resume loans to the country.
Mr. Jojima added that the World
Bank and the ADB "will be in a position to clear Myanmar's arrears in
January 2013."
Japan's export-reliant,
resource-poor economy could benefit hugely from Myanmar, which is rich with
natural resources, traditionally sympathetic to Japan, and seen as having
potential to become a high-growth economy and a low-cost manufacturing hub.
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