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Update on Maung Aye Japan visit



JAPAN-MYANMAR RELATIONSHIP COMES INTO FOCUS
Tokyo visit of Gen. Maung Aye underscores growing importance of bilateral ties

By Hisane Masaki
Staff writer, Japan Times
Friday, October 27, 1995

  Gen. Maung Aye, a top leader of Myanmar's military-led government, comes
to Tokyo next week on a five-day informal visit, apparently courting
increased Japanese economic aid and investment to help his country's switch
to a free market economy from a socialist-style, centrally planned economy.
  Maung Aye, the vice chairman of the State Law and Order Restoration
Council -- as the military junta refers to itself -- is to arrive Monday on
his way back home from a trip to New York to attend the 50th anniversary
celebrations of the United Nations.
  He will be the highest-level SLORC official to visit Japan since the
military took power in Myanmar in a 1988 coup.  There is a speculation that
the 57-year-old military official may replace Than Shwe as SLORC chairman as
early as next spring.
  Certain major Japanese trading firms are so enamored of new business
opportunities in Myanmar -- a potentially lucrative, resource-rich market
with the population of 45 million -- that they are preparing to roll out the
red carpet for him, according to sources familiar with corporate thinking on
the matter.
  Marubeni Corp. and Mitsubishi Corp., according to the sources, both of
which signed comprehensive cooperation agreements with Myanmar earlier this
year, and Mitsui & Co. Ltd. have already appointed a full day each during
Maung Aye's Japan stay for business discussions and consultations.
  After Myanmar -- formerly Burma -- became internationally isolated,
especially from the West, in the late 1980s, its economy demonstrated slack
economic growth, at best, until a recovery began in 1992.
  Even after posting a robust growth of 9.3 percent in fiscal 1992, the
country's economy has continued to grow strongly amid accelerated
free-market reforms, although at a slightly slower pace.
  Japan made direct investment of only $101 million in Myanmar between
September 1988 and March 1995, as compared with $632 million by Britain,
$465 million by France, $398 million by Thailand, $293 million by Singapore
and $226 million by the United States, according to Myanmarese government
statistics.
  In a sharp contrast to the sentiment within the private business sector,
the Japanese government apparently wants to keep Maung Aye's Tokyo trip as
low-profile as possible for fears of sending the wrong signal to both SLORC
and the rest of the world, especially the West, about its policy toward Rangoon.
  Prim Minister Tomiichi Murayama will probably not meet Maung Aye, although
Foreign Minister Yohei Kono may do so, a Foreign Ministry official said, on
the condition of anonymity.
  The official also said that even if Kono or other government officials
were to meet with Maung Aye, they would convey to him a strong message that
SLORC must make more democratic reforms and improve protection of human
rights despite the release in July of opposition leader Aung San Suu Kyi.
  "The Japanese side will not start talking with Maung Aye about official
economic aid for Myanmar, even though he may raise the subject, "the
official said.
  SLORC put Suu Kyi under house arrest in 1989 and annulled the results of a
democratic election in 1990, in which her National League for Democracy, or
NLD, won a landslide victory.
  The United States and other Western industrialized countries have harshly
condemned SLORC for blatant violations of human rights and democracy and
frozen official economic aid for the impoverished Southeast Asian country.
  Although Japan also suspended official development assistance to Rangoon
following the 1988 military coup, it has advocated a policy of
"constructive engagement" with Rangoon, rather than seeking to isolate
Myanmar,  so as to encourage changes there.  Myanmar's Asian neighbors have
chosen to pursue a policy of constructive engagement with Myanmar.
  Maung Aye's visit comes at a time when Tokyo is gearing up -- albeit
cautiously -- to make a full-scale resumption of offical development
assistance, or ODA, to Myanmar following Suu Kyi's release.
  The trip also comes less than one month before Myanmar's National
Convention, which has been involved in the drafting of a new constitution
since 1993, is to resume Nov. 28 after a hiatus of about seven months.
  The National Convention was originally to have reopened at the end of
October.  Although nearly 10 percent of 700 delegates are from the NLD,
SLORC opponents dismiss the convention as a sham designed to perpetuate the
military's grip on power.
  The one-month delay in resuming the convention is seen by some foreign
diplomats in Rangoon as a deliberate and considered tactic by SLORC to draw
Suu Kyi and  her NLD into discussions at the resumed convention by giveing
her extra time to determine her position on a dialogue with SLORC.
  The worst case scenario for Japan is that confrontation between the Suu
Kyi-led NLD and SLORC would develop into another bout of political
repression, including the possible use of force, by the military.
  That scenario, if it were to actually take place, would be a severe
embarassment for Japan, which claims that the policy of constructive
engagement has, so far, reaped tangible results, as exemplified by Suu Kyi's
freedom.
  Another flareup of political and social upheaval in Myanmar would also put
the brakes on -- and could even reverse -- Japan's policy of gradually
increasing ODA, including resumption  of suspended low-interest yen loans,
to Myanmar.
  Since the military grabbed power in the 1988 coup, Japan has put on hold
the disbursement of yen loans it pledged earlier to Myanmar for six
infrastructure projects, including 27 billion yen for the repair and
expansion of an international airport in Rangoon.
  The U.S. and Europe insist that Suu Kyi's freedom alone is far from
sufficient and oppose any economic aid for the military-led government in
Myanmar, whose legitimacy they do not recognize.
  This stance by other governments and Suu Kyi's critical views on Japanese
aid, especially for nonhumanitarian purposes, voiced repeatedly in
interviews with the foreign media after her July release, have made Tokyo
cuaitious about freely turning on the aid tap to Myanmar.
  Aside from such political reasons, it is likely to take about one year --
or even longer -- before Japan can resume the provision of the yen loans to
which it has already committed itself for all six projects because of
technical reasons, such as the need to re-evaluate the projects.
  Among the projects, the international airport poses the most complicated
problem, because the question of how to cover some 6 billion yen in losses
incurred by a Japanese corporate group, led by Marubeni and Taisei Corp. is
difficult to resolve, government sources said.
  The sources said that the corporate group continued work on the airport
project for some time even after the flow of yen loans stopped in the wake
of the 1992 military coup, in anticipation of an early resumption of such aid.
  The group paid some 6 billion yen from its own coffers to make up for
suspended yen loans before it was eventually forced to withdraw from the
project, the sources said.  "Once the Marubeni-Taisei group determines to
swallow the loss, then fresh yen loans for the airport project will be
disbursed,"one source said.
  Among the six Japanese-financed projects that have been on hold since the
late 1980s, resumption of yen loans for a 4.8 billion yen project to improve
the power supply network in Rangoon is expected to come first, possibly
early next year, the sources said.
  Although Japan is preparing to resume the yen loans it already committed
to Myanmar, it will not make any additional pledge of loans in the
foreseeable future, partly for political reasons and partly because of the
unresolved question of some 80 billion yen in official debts that Myanmar
owes Tokyo.
  "Japan's position is the same with that of the U.S. and Europe in that
transfer of power from the military to civilians must be made as soon as
possible, " a senior Foreign Ministry official said, on condition of anonymity.
  "But Japan wants to see a soft landing for such a transfer of power in
Myanmar, without any serious turmoil there and damages to the country's
smoothly developing economy," the official added.