Japan seeks to tap Myanmar’s potential

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Shinzo AbeJapan’s premier Shinzo Abe arrived in Myanmar on May 24 on a first visit by a Japanese leader since 36 years, closely following Myanmar president Thein Sein’s visit to US president Barack Obama on May 20. The purpose of Abe’s visit is to enhance economic ties with the newly opened nation and open avenues for Japanese companies to tap into the huge resources of the country.

Japan has been a key aid donor to Myanmar over the past decades, and maintained trade relations with the country during its years of rule by the military junta, untouched by Western sanctions.

Currently, at least 35 Japanese investment projects are under way in Myanmar, with the biggest being the development of the 2,400 hectare Thilawa Special Economic Zone near Yangon led by Mitsubishi Corp., Marubeni Corp. and Sumitomo Corp.

In 2012, Japan’s previous government agreed to write off more than $3.7 billion  of debt owed by Myanmar, an agreement honoured by the existing government.

Abe said that “Japan will cooperate in Myanmar’s reforms with both public and private sector assistance,”  according to Kyodo News International. The Japanese premier is expected to announce $980 million in development aid during his visit.

Currently, Japan is the 11th largest investor in Myanmar, with $270 million in overall investments as of February 2013, far behind the $14.2 billion committed by China and $9.6 billion by Thailand, the top two sources with 33 per cent and 23 per cent respectively of total foreign direct investment, followed by Singapore.

Foreign companies feel particularly attracted by the low labour wages in Myanmar.

The former pariah state  has the cheapest wages in Asia, according to survey published by the Japan External Trade Organisation (Jetro) in December 2012. The reports stated that the annual total pay burden for a manufacturing worker in Myanmar totals $1,100,  compared with $1,478 in Bangladesh, $2,602 in Vietnam and $6,704 in neighbouring Thailand.

Investment into Myanmar have increased fivefold between the fiscal years 2011/12 and 2012/13, ending in March. Over $1.42 billion foreign direct investment was made for 94 enterprises while local investors made $1.3 billion for 65 enterprises, creating a total of 82,792 job opportunities, according to official data.

However, there are still companies and individuals in Myanmar that have close ties to the nomenklatura and are engaged in opaque businesses. Another problem is the country’s unstable currency.

 

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Reading Time: 2 minutes

Japan’s premier Shinzo Abe arrived in Myanmar on May 24 on a first visit by a Japanese leader since 36 years, closely following Myanmar president Thein Sein’s visit to US president Barack Obama on May 20. The purpose of Abe’s visit is to enhance economic ties with the newly opened nation and open avenues for Japanese companies to tap into the huge resources of the country.

Reading Time: 2 minutes

Shinzo AbeJapan’s premier Shinzo Abe arrived in Myanmar on May 24 on a first visit by a Japanese leader since 36 years, closely following Myanmar president Thein Sein’s visit to US president Barack Obama on May 20. The purpose of Abe’s visit is to enhance economic ties with the newly opened nation and open avenues for Japanese companies to tap into the huge resources of the country.

Japan has been a key aid donor to Myanmar over the past decades, and maintained trade relations with the country during its years of rule by the military junta, untouched by Western sanctions.

Currently, at least 35 Japanese investment projects are under way in Myanmar, with the biggest being the development of the 2,400 hectare Thilawa Special Economic Zone near Yangon led by Mitsubishi Corp., Marubeni Corp. and Sumitomo Corp.

In 2012, Japan’s previous government agreed to write off more than $3.7 billion  of debt owed by Myanmar, an agreement honoured by the existing government.

Abe said that “Japan will cooperate in Myanmar’s reforms with both public and private sector assistance,”  according to Kyodo News International. The Japanese premier is expected to announce $980 million in development aid during his visit.

Currently, Japan is the 11th largest investor in Myanmar, with $270 million in overall investments as of February 2013, far behind the $14.2 billion committed by China and $9.6 billion by Thailand, the top two sources with 33 per cent and 23 per cent respectively of total foreign direct investment, followed by Singapore.

Foreign companies feel particularly attracted by the low labour wages in Myanmar.

The former pariah state  has the cheapest wages in Asia, according to survey published by the Japan External Trade Organisation (Jetro) in December 2012. The reports stated that the annual total pay burden for a manufacturing worker in Myanmar totals $1,100,  compared with $1,478 in Bangladesh, $2,602 in Vietnam and $6,704 in neighbouring Thailand.

Investment into Myanmar have increased fivefold between the fiscal years 2011/12 and 2012/13, ending in March. Over $1.42 billion foreign direct investment was made for 94 enterprises while local investors made $1.3 billion for 65 enterprises, creating a total of 82,792 job opportunities, according to official data.

However, there are still companies and individuals in Myanmar that have close ties to the nomenklatura and are engaged in opaque businesses. Another problem is the country’s unstable currency.

 

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