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Friday, Oct. 12, 2012

Slate to be wiped clean in January

Myanmar yen loans to start in early 2013

Staff writer

Japan will resume yen loans to Myanmar early next year and support the former military state's democratic and economic transition, Finance Minister Koriki Jojima revealed Thursday.

Speaking at a meeting on Myanmar's development on the sidelines of the IMF and World Bank's annual meetings in Tokyo, Jojima added that the Asian Development Bank and the World Bank, Myanmar's second- and third-largest creditors, are "in a position to clear" the country's outstanding debt in January.

Japan, Myanmar's largest creditor, is also stepping up to aid the fledgling democracy's sustainable development, he said.

"It is high time the international community combined its efforts to underpin Myanmar's reform process and to reintegrate it as a full member" of global society, Jojima stressed.

He said Japan will write off a large amount of Myanmar's outstanding debt in January, before resuming full-fledged assistance through new yen loans. The two countries agreed in April to cancel about 60 percent of the ¥500 billion Myanmar owes Japan.

"Clearing Myanmar's arrears paves the way for Japan to resume new commitments through concessional loans," Jojima said, adding Japan is willing to assist with electricity and other infrastructure projects, as well as rural development.

Myanmar's prohibitive level of indebtedness to other countries and international bodies, dating as far back as the 1980s, has hampered its transition to democracy and a free-market economy.

In light of this, the government announced that it will provide bridge loans to Myanmar through the Japan Bank of International Cooperation to enable the country to clear its arrears with the ADB and the World Bank.

Myanmar's finance minister, Win Shein, thanked Japan and the international community for their assistance at a time when his country is "in the midst of an unprecedented and multifaceted reform drive."

"We are committed to building a new Myanmar — a democratic, inclusive, peaceful (country) with sustainable economic growth — that will actively and responsibly participate in our shared mission to build a thriving and harmonious Asia," he said.

Win Shein also explained that Myanmar's government is in the process of making significant steps, such as reforming its budgetary and taxation systems, and added that it is targeting gross domestic product growth of 6.7 percent in fiscal 2012.

Earlier in the day, World Bank President Jim Yong Kim pronounced himself "encouraged by the reforms taking place" in Myanmar.

"There is still more progress that needs to be made" though, he added, pointing out that Myanmar needs to improve its health care and education systems, enhance its infrastructure and expand its private sector to ensure steady economy growth.

Thursday's meeting was attended by 26 countries, including all Group of Seven member states, as well as five international organizations, including the International Monetary Fund and the World Bank. China, however, which has snubbed the IMF and World Bank events by sending low-ranking officials to Tokyo in apparent protest over the Senkaku Islands row, was absent.

"China has strong ties with Myanmar and we were hoping (its representatives) would attend the meeting," a Finance Ministry official said. "Unfortunately, they informed us they can't attend the event" a few days ago.

Myanmar's rapid democratization following the establishment of a nominally civilian government in March 2011 has drawn attention around the world, especially due to its potential for rapid economic growth on the back of plentiful natural resources and raw materials.

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The Japan Times

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