Japan’s Development Ambitions for Myanmar: The Problem of “Economics before Politics”

Myanmar and Japan have had an important shared history since the Pacific War, when Japan occupied the British colony of Burma and established the country’s first postcolonial state and army. The period from 1941 to 1945 also witnessed the “militarization” of Myanmar as the country was turned into a battlefield by the Japanese, the Allies and indigenous insurgents. After independence from Britain in 1948, the Union of Burma continued to suffer insurgency and became a deeply conflicted society, especially under the isolationist socialist regime of General Ne Win (1962–1988). However, Japan played a major role in Myanmar’s economic development through its allocation of war reparations and official development assistance (ODA), especially yen loans. During the period of martial law from 1988 to 2011, Tokyo exercised some self-restraint in giving aid due to pressure from its major ally, the United States, with its human rights agenda. However, with the transition from junta rule to constitutional government in 2011 came a dramatic increase in Japanese ODA, as Tokyo forgave large amounts of debt and invested in ambitious new special economic zones (SEZ). Japan will no doubt benefit from Myanmar as close ties are expanded: Not only will Japanese companies profit, but Japan will have access to Myanmar’s raw materials and gain ability to compete more effectively with an economically expansive China. On Myanmar’s side, though, it is unlikely that anyone other than the military and crony capitalist elites will benefit from the flood of new yen loans and infrastructure projects. This paper argues that without a political resolution of Myanmar’s many conflicts, including the establishment of genuinely open political institutions, the aid of Japan (and other countries) is likely to make these deep-rooted social and ethnic conflicts even worse.