Japan: Myanmar: Thein Sein in Tokyo for debt relief and investments

Tokyo - Burmese President Thein Sein is in Japan on a five-day visit expected to focus on financial aid and debt relief. His visit, the first to Japan by a Burmese leader in 28 years, comes as EU nations prepare to ease sanctions.

During his visit, Thein Sein will hold talks with Japanese Prime Minister Yoshihiko Noda. Officials say they will discuss a solution to Burma's debt to Japan, its biggest creditor. Japan pledged 403 billion yen (US$ 4.9 billion) in loans to Myanmar between 1967 and 1987.

Now Myanmar wants a share of the investment that Japanese exporters have poured into neighbouring Thailand. The nation of 64 million is strategically located and rich in natural resources.

Choosing democracy can only strengthen the country, a Japanese source said. Other Japanese government sources declined to comment press reports saying Japan will forgive 300 billion yen ($3.7 billion) in yen-denominated loans.

Japan occupied Myanmar during World War II. Since 2008, it has invested about US$ 10 million in the country, very little compared with more than $13 billion in Chinese outlays.

China, Hong Kong, Thailand and South Korea account for nearly all the US$ 26 billion in foreign investment in Myanmar in that time.

Tokyo is aware of the situation and initiated regular meetings with leaders of nations along the Mekong River in 2009 in order to limit Chinese influence.

At present, trade between China and the Mekong countries reached US$ 90 billion in 2010, compared with US$ 73 billion for Japan and US$ 55 billion for the United States.

Meanwhile, to reward Myanmar for its democratisation, the European Union reached an "agreement in principle" to suspend all sanctions, except the arms embargo.

Now the decision must be approved by EU foreign ministers when they meet on Monday in Luxemburg.