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The Irrawaddy - Burmese Edition5,516,574 likes

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BURMESE VERSION

စ ီးပ ီးေရီး

ဂ်ပန္ေတ ြ နန္န မာကြု ္ေန ပ

ဧရ ၀တ | July 14, 2016

http://burma.irrawaddy.com/business/2016/07/14/118414.html

ENGLISH VERSION

http://www.ft.com/cms/s/0/90c08c6a-3f72-11e6-8716-a4a71e8140b0.html#axzz4ENn68x5v

July 10, 2016 4:05 pm

Japan turns on the charm in Myanmar in effort to counter China Michael Peel and Leo Lewis

©Bloomberg

Japan has intensified its charm and investment offensive in Myanmar in a bid to

become Southeast Asia’s most powerful counterbalance to China.

In the five-year transition to Myanmar’s landmark new government, the number of

Japanese businesses in the country has grown sixfold, language courses have boomed

and billions of dollars have been pumped from Tokyo into industrial and social projects.

The investment spree is part of a wider Japanese push to win new markets and reduce

dependence on China by building closer ties in emerging countries to the south, such as

Vietnam.

“There are so many ‘déjà vus’ here,” says Hirokazu Yamaoka, Myanmar head of Jetro,

the Japanese trade promotion agency, referring to his previous posting in Vietnam

during its foreign investment boom. “And the real business has not yet started.”

Japan is one of several big powers jockeying for position in fast-growing Myanmar,

where political change has yielded the first civilian-led government for more than half a

century.

While Japan is competing hard in other Southeast Asian emerging markets, such as

Vietnam, it has enjoyed particular competitive advantages in Myanmar thanks to the

chemistry of the political transition.

Since Myanmar’s junta formally stepped down in 2011, the US and some other western

countries have been cautious because of lingering sanctions imposed during the most

repressive days of dictatorship.

At the same time, Myanmar signalled it wanted to reduce its dependence on China, most

notably by suspending the giant Beijing-backed Myitsone dam project in 2011.

Japan was well-placed because it had always kept a business and cultural foothold in

Myanmar, never imposing sanctions even as the western measures squeezed the junta

during the 1990s and 2000s.

Now Japanese government and corporate finance from the likes

of Mitsubishi,Marubeni and Sumitomo have powered the development of the giant

Thilawa industrial zone south-east of Yangon, where dozens of factories are complete or

under construction. Japanese development money has gone into plans ranging from an

overhaul of Yangon’s British colonial-era sewage system to the building of three radar

installations to warn of dangerous weather events.

“Japan has grown so much here in the past two years or so,” says Kyaw Naing, a 34-

year-old engineer, speaking beside the blue and white Yangon weather tower he is

helping construct. “And more is coming.”

Official loans from Tokyo to Naypyidaw almost doubled to ¥98.3bn in 2014 from the

year before, the latest figures available, while debt relief amounted to ¥300bn in 2013

alone. Membership of the Japanese Chamber of Commerce in Myanmar climbed from

53 at the end of military rule to 310 by May this year, a number that could rise higher if

big companies resolve concerns ranging from lack of power supply to restrictions on

foreign ownership. Some Myanmar state businesses have joint ventures with Japanese

companies including brewer Kirin and telecommunications company KDDI.

Daiwa Securities, the giant Japanese brokerage that was central to the creation of

theYangon Stock Exchange, envisages businesses emerging from the evolution in

Myanmar’s domestic business scene. “We want to try to get more companies to consider

listing on the Yangon exchange and that is going to mean more education. We want to

get more people involved in trading too,” said Atsuo Tachikawa, Daiwa’s head of

international business planning.

Japanese language courses have also flourished as young Myanmar nationals aim to

land jobs with the companies now coming in. The number of institutions in Myanmar

teaching Japanese has climbed to 200 from 44 five years ago, according to Japanese

official estimates.

Myanmar nationals have also embraced study and work in Japan as travel restrictions

have eased. One Myanmar student moonlighting illegally at a convenience store in

central Tokyo says she decided to learn Japanese not Chinese because the quality of

work offered by Japanese companies seemed “a lot better”.

“We want to make money, I want to have a family one day and the Japanese companies

seem to have real jobs,” she says.

We want to make money, I want to have a family one day and the Japanese companies

seem to have real jobs

- Myanmar student

Meanwhile, an increasing number of Japanese are learning Myanmar language. A

course for mature students was so popular when it debuted in 2015 that the Tokyo

University of Foreign Studies increased the numbers of classes by 75 per cent this year.

But the bilateral relationship also faces uncertainties under the new government led by

Aung San Suu Kyi’s National League for Democracy.

Gen Aung San, the assassinated Myanmar nationalist leader and Ms Aung San Suu Kyi’s

father, did a pragmatic second world war deal with occupying Japanese forces to fight

the British colonialists. But the relationship unravelled when Japanese forces

committed atrocities and it became clear Tokyo was not going to allow independence.

Some analysts question whether Japan’s standing might be damaged by perceptions it

was close to the previous government, with which Ms Aung San Suu Kyi had a tense

relationship.

Japan has also faced criticism for allegedly drawing up development plans in Myanmar

without sufficient consultation in the affected communities.

Jetro’s Mr Yamaoka insists Japan has handled local people’s concerns sensitively,

including in a dispute with villagers displaced by the Thilawa industrial area that

remains unresolved.

“We want to help Myanmar be an industrial society,” he says. “We want a win-win

relationship with our neighbours.”