It seems the problems that struck China’s $3.6 billion dam project in Myanmar opened a small window for Japan. Reuters has the story on the cautious increase in Japanese aid and the promising beginnings of democratic thaw in Myanmar:
Tokyo sees growing investment opportunities in Myanmar as the reclusive state embarks on political and economic reforms, citing its strategic location between India, China and Southeast Asia, a senior Japanese official said on Wednesday.But any investments must be gradual with Japan not ready to resume full-fledged trade and aid, said Kimihiro Ishikane, deputy director-general of Japan’s Foreign Ministry’s Asian and Oceanian Affairs Bureau…Since the army nominally handed power to a civilian parliament in March after the first elections in two decades, President Thein Sein has also defied sceptics by reaching out to Nobel Peace Prize-winner Aung San Suu Kyi.Japanese aid guidelines to Myanmar were relaxed after Suu Kyi was freed from 15 years of house arrest last year, Ishikane added, clearing the way for Japanese involvement in some small infrastructure projects.
It was only a matter of time before the major Asian players reached out to the new government in Myanmar given its large reserves of oil, natural gas and other resources as well as a geographical location that plays an important role in shipping through the narrow Straits of Malacca: “The country [Myanmar], as big as France and Britain combined, sits between booming India and China with ports on the Indian Ocean and Andaman Sea that, if developed with proposed rail and pipeline projects, would allow cargo ships to bypass the Straits of Malacca.”The recent democratic thaw has only further opened this market for Asia’s investors. But governments are also interested in the security implications of political reform in Myanmar. Having been so closed off for so many years, the Myanmar government only had close relations with China. Beijing is far ahead in developing Myanmar’s resources and providing the funding and manpower for infrastructure projects. Now though, Japan and India are cautiously interested, and they are being received with open arms. It appears Myanmar’s governing generals have made a smart move: Cede some power to the democrats and activists, tell the world you’re reforming, then sit back and wait for the money to roll in. China has a head start but Japan and India won’t sit by and let the Chinese have everything Myanmar has to offer.Many smaller Asian countries are going to discover new opportunities: they will be courted both by China and by countries concerned about limiting Beijing’s reach. The Burmese generals will not be the only government using its strategic importance in Asian politics to cut better deals on aid, investment and trade.