The American Interest
Analysis by Walter Russell Mead & Staff
Japan Seeks New Ally in the Game of Thrones

Japan today took steps to strengthen its relationship with Myanmar, a potential new ally as it continues to jockey for resources and influence:

Japan’s new government confirmed its support for the emerging democracy in Myanmar on Thursday when Finance Minister Taro Aso visited the country to reaffirm Japan’s intention to cancel debt and help develop a big industrial zone.

Myanmar has implemented rapid economic and political reforms since President Thein Sein’s quasi-civilian government took over from a long-ruling military junta in March 2011 and Japan has moved quickly to cement business ties.

Japan will wave 300 billion of Myanmar’s 500-billion yen debt (about US $3.4 billion of $5.7 billion), and it is offering a $900 million bridge loan to help repay Myanmar’s debt with the World Bank and the Asian Development Bank. Japan is also giving Myanmar an additional loan of 50 billion yen to help it build a new industrial center in Thilawa. Several large Japanese companies are part of the joint venture to create the giant manufacturing zone, which will also be built by Japanese construction companies.

Japan’s deepening ties with Myanmar are hugely important. The loans and investment will help Myanmar resist the pressure of Chinese influence and help Japanese companies eager to reduce their dependence on factories located in China. Japan’s policy toward Myanmar signals that it is serious about reshaping Asia in ways that challenge Chinese ambitions. China, of course, won’t take these moves lying down.

Published on January 3, 2013 2:09 pm