With the easing of international sanctions on Burma’s military junta, the Japanese business elite has wasted little time in jumping on this new opportunity. As the Financial Times reports, Japanese businesses are now looking to get involved in the growing Burmese market any way they can:
Three months after Japan agreed to waive much of the money owed to it by Myanmar, clearing the way for normalised economic relations after a 25-year lending freeze, Japanese companies are beginning to make up for lost time. On Tuesday Marubeni, Japan’s fifth largest trading house, said it had been awarded a contract to overhaul a gas-fired power plant it built seven years ago, before tighter Western sanctions took hold.
At first glance, this is relatively unremarkable. International trade is hardly a new phenomenon, especially when the companies are neighbors with complementary economic interests. This decision, however, is notable for its geopolitical, not economic, significance, and for its potential to re-balance the East Asian power structure. As the FT reports, the foreign ministry is already beginning to get involved:
Foreign minister Koichiro Gemba is doing his bit: last week the Nikkei newspaper reported that Gemba met his counterpart in Myanmar to propose the setting up of a Japan-Myanmar Joint Initiative, with the aim of clearing barriers to direct investment. The hope is to do for Myanmar what a similar body did for Vietnam—now one of the biggest recipients of Japanese investment—from the early 1990s.
Clearly, this is an important step for Japan and Burma, but there is a third party here as well: China. China has been Burma’s closest regional partner since 1949, when the Southeast Asian nation was the first non-Communist government to recognize the People’s Republic. But over the past year, this seems to be changing. Burma’s relationship with the West has thawed dramatically in recent months due to the resurgence of opposition leader Aung San Suu Kyi. It has also pushed for stronger ties with its ASEAN neighbors. The lucrative deals with Japanese corporations may turn out to be the lubricant for closer political ties between Tokyo and Naypyidaw.These are the kinds of moves that makes Beijing feel increasingly encircled.