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Debate on Japanese ODA

Daily Yomiuri, Friday, January 5, 1995


by Yumiko Miyai
Daily Yomiuri Staff Writer

	It is vital for developing countries to secure economic assistance from
affluent nations or supranational aid groups in order to improve
infrastructure, such as airports, that will in turn expedite economic growth
and encourage a self-sustained influx of private-sector investment.
	But some development projects are often grounded unexpectedly for one
reason or another.  For example, a nearly completed 33.4-meter-high control
tower stands weather-beaten at Myanmar's Yangon International Airport,
showing the current state of Japan's official development assistance
vis-a-vis Myanmar.
	Construction of the control tower, part of a Japan-financed project to
expand and modernize the airport at a cost of 27.17 billion yen, has been
suspended since the military junta seized control of Myanmar in September 1988.
	Leading Japanese construction firm Taisei Corp., which won a bid to be the
main contractor on the project, says it has already spent about 4 billion
yen on the control tower and on vehicles and equipment.
	"After the release of Aung San Suu Kyi from house arrest (in July 1995),
the governments of Japan and Myanmar started negotiations aimed at resuming
the project," a Taisei spokesman said in Tokyo.  "But they have not gone to
anywhere yet."
	In 1988, Japan froze all its ODA programs for Myanmar, with the exception
of humanitarian and technological aid.
	After Suu Kyi, Myanmar's top opposition leader and the winner of the 1991
Nobel Peace Prize, was released from six years of house arrest, Japan
resumed grant-in-aid, including a 1.62 billion yen project to expand a
university for nurses in Yangon.  But early loans, totaling 51.24 billion --
for eight projects, including the airport project, remain suspended.
	The Foreign Ministry says the resumption of yen loans will require more
than the release of Suu Kyi.
	"Until we see visible signs for democratization in Myanmar, we will not be
able to resume yen loans," said Shigeru Nakamura, chief of the Aid Policy
Division of the ministry's Economic Cooperation Bureau, citing Japan's ODA
	Japanese ODA policy requires that democratic processes, among other things,
in recipient nations be taken into consideration before aid is dispensed.
	Suu Kyi has repeatedly called on her country's military junta, called the
State Law and Order Restoration Council (SLORC), to hold a dialogue that
will bring about democracy in Myanmar.  So far her efforts have been in vain.
	Furthermore, the SLORC last month expelled members of the National League
for Democracy, led by Suu Kyi, from the National Assembly, which was
convened to draft outlines for a new constitution.
	"I don't know if it can be called a setback, but the development certainly
has poured cold water on a move toward democracy," Nakamura said.

ODA Budget Edges Up
	On Dec. 25, the Japanese Cabinet agreed to hike its ODA budget for fiscal
1996 by a modest 3.5 percent to 1.14 trillion yen.  Japan has been the
largest aid donor in the world for several years running.
	Once the freeze on yen loans to Myanmar is lifted, Japan will likely play a
pivotal role in helping the resource-rich country secure eventual membership
in the Association of Southeast Asian Nations.
	Leaders attending an ASEAN summit in mid-December pledged to work for the
inclusion of three Southeast Asian nations -- Myanmar, Laos and Cambodia --
in ASEAN by the year 2000.
	ASEAN groups Thailand, Indonesia, the Philippines, Singapore, Malaysia,
Brunei and Vietnam.
	"Japan should provide considerable funds to Myanmar because the nation has
potential to grow like Vietnam," said Yasutami Shimomura, a Saitama
University professor who specializes in Japan's ODA policies.
	"It's a matter of time before Japan resumes yen loans to the nation,"
Shimomura added.
	Shimomura said Japanese ODA should be directed at such large-scale projects
that cannot be supported by private-sector capital alone, or at projects
that will make it easier for private-sector capital to flow into Myanmar.
	"It is also important to help boost agricultural production there to enable
Myanmar to become an exporter of agricultural products," he added.