The Land of the Rising Sun Also Rises
Japan Helps Burma Tilt Away From China

As Aung San Suu Kyi tries to keep Burma on the bumpy road to democracy, we’ve long pointed out that there’s more than human rights at stake. In particular, the U.S. wants Suu Kyi to succeed because she doesn’t have as cozy relationship with Beijing as her military predecessors did. The problem is that China had been Burma’s primary source of funding: between 1988 and 2013, 60 percent of the country’s arms imports came from Beijing, and Chinese firms were behind 42 percent of Burma’s total foreign direct investment. Who will replace the $13 billion in infrastructure investments China promised between 2008 and 2011?

Japan is stepping up to the plate, the FT reports:

Official loans from Tokyo to Naypyidaw [Burma’s capital city] 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 the Yangon 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.

Japan’s clout in Southeast Asia has been growing, with Tokyo looking both to reduce its exposure to China and to weaken Beijing’s regional influence. With the United States giving mere pennies on the dollar in security assistance to Southeast Asia and American companies largely staying on the sidelines, Japan sees an opening.

American firms still have trouble entering Burma because a strict sanctions regime remains in place. Japan’s willingness and ability to go where the U.S. will not is thus tremendously useful, as is Tokyo’s deep network of economic relationships in the region. Washington will need the support of allies like Japan as the United States looks to maintain a balance of power in China’s neighborhood.

Amidst hand-wringing about the possibility of a resurgent post-pacifist Japan, it’s important not to neglect the critical role the Land of the Rising Sun can and does play in maintaining stability in Asia.

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