Yen-loan tap for Myanmar may go dry

[carol@xxxxxxx]

Japan Times: Friday, December 15, 1995

YEN-LOAN TAP FOR MYANMAR MAY GO DRY
Hardline Moves Straing Constructive Engagement

By Hisane Masaki
Staff Writer

     Renewed political tensions in Myanmar are forcing Japn to consider putting the brakes on its recently declared policy of gradually turning on the aid tap for the impoverished Southeast Asian country.
     When the military regime -- which styles itself as the State Law and Order Restoration Council -- released dissident leader Aung San Suu Kyi in July after nearly six years of house arrest, many Japanese government officials couldn't hide their elation, trumpeting what to them was the success of their policy of "constructive engagement."
     Following Suu Kyi's freedom, Tokyo began to move, albeit cautiously, toward complete resumption of official economic aid for Rangoon, which was frozen after the military took power in a 1988 coup.
     As a first step, Tokyo provided 1.6 billion yen in grant-in-aid in October for the repair of a nurse training school in the capital.
     Until recently, Tokyo had planned to take a second step by extending 4.8 billion yen in official loans for the improvement of Rangoon's power supply network before the current fiscal year ends next March.
     But now Japanese officials say that the provision of those yen loans is likely to be delayed until next fiscal year because of the tense confrontation between the SLORC and Suu Kyi's National League for Democracy.
     The power supply network is among the six infrastructure projects that have been put on hold since the late 1980s because the yen loans Japan had committed earlier for them stopped flowing into Myanmar.
     The officials also say that Japan will postpone a planned "aid-policy dialogue" mission to Rangoon again, until sometime next year.  The mission, originally planned for October to hear requests from Rangoon about Japanese aid, had been rescheduled for this month.
     The planned mission is designed to soothe the SLORC, which has been disappointed with what it sees as Japan's slow move toward a full-scale resumption of economic aid despite Suu Kyi's freedom, apparently expecting Japan to show more enthusiasm about future aid.
     "The mission would simply provide a chance to exchange views with SLORC officials on Japanese aid but would not pledge any fresh aid," a Japanese government source said.  "But sending the mission now would send a wrong signal to the international community that Japan is clearly siding with the SLORC in its showdown with the NLD."
     Japan is widely believed to have played a key role behind the scenes in persuading the SLORC to release Suu Kyi.  The fact that the Japanese Embassy in Rangoon was first informed of the SLORC decision reinforced that view.
     Japan has had long and especially amicable relationship with Myanmar, formerly Burma.  Aung San, Suu Kyi's father and the country's revolutionary hero, received training in Japan during World War II.
     "Japan may have misled the SLORC by giving an impression that its aid tap would be turned on freely once Suu Kyi is released," a senior Japanese Foreign Ministry official said on condition that he not be named.
     Before the latest confrontation emerged between the SLORC and the NLD, Japan had also been considering an additional extension of grant aid as early as next spring, aimed at boosting food production in rural areas populated by ethnic minorities and improving medical equipment at a Mandalay hospital.
     But even the tentative date for this fresh humanitarian aid will probably be delayed because of the political impasse in Myanmar, another senior Foreign Ministry official said, requesting anonymity.
     "Japan may have been too optimistic about Myanmar's political situation," the official acknowledged.  "Japan now is in no mood and in no hurry to provide fresh aid to Myanmar.  Any such move would not only spark international criticism but also encounter opposition from within the ruling coalition," the official said.
     Suu Kyi's NLD, which won a landslide victory in 1990 elections that were annulled by the SLORC, decided at the end of last month to boycott the National Convention only a day after it reconvened, claiming the convention was undemocratic.
     The convention, which has met intermittently since early 1993 to draft a new constitution, is regarded by SLORC critics both at home and abroad as a sham designed to perpetuate the military's grip on power.
     Constructive engagement, rather than international ostracism, is a strategy also strongly favored by Myanmar's neighbors, especially the Association of Southeast Asian Nations.  ASEAN groups Thailand, the Philippines, Indonesia, Malaysia, Singapore, Brunei and Vietnam.
     ASEAN has invited Than Shwe, SLORC chairman, to an unprecedented summit in Bangkok on Friday of the seven ASEAN members plus Cambodia, Laos and Myanmar, which are all expected to join ASEAN within the next several years and expand the grouping to an "ASEAN 10."
     But Western industrialized nations remain highly critical of the SLORC for its blatant violations of human rights and democracy despite Suu Kyi's release.  They continue to withhold aid from Myanmar.
     International human rights groups have also issued reports lambasting the SLORC.  The London-based Amnesty International said in a report released last month that thousands of political prisoners were still in jail.
     The New York-based Human Rights Watch/Asia also said in a recent report that the SLORC "paradoxically ... took a hardline stance" after setting Suu Kyi free and that "there was no overall improvement in the human rights situation" in Myanmar this year.
     What Japan fears most is another bout of military repression of prodemocracy forces.  In that worst-case scenario -- indeed, there is a possibility of that happening -- Japan will lose its face and will be forced to reverse moves toward full resumption of aid.
     Many analysts say the SLORC will try to avoid quashing the prodemocracy movement by force, as it did in 1988, for fear of further damaging its international position and frightening away foreign investors, who in recent months have been trekking to Myanmar in droves to tap a potentially lucrative, resource-rich market of some 45 million people.
     But at the same time, the analysts do not rule out the possibility that an accidental clash between the military and prodemocracy forces would escalate into a repeat of the 1988 nightmare.
     "The current deadlock in Myanmar's politics is likely to continue for the time being," a senior Japanese government offical said on condition that he not be named.
     "We are closely watching to see if something that breaks the impasse will happen.  The dates which we are paying extra attention to for the time being are:  December 15, when Than Shwe will be in Bangkok, and January 4, the 48th anniversary of Burma's independence from Britain," the official said.