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May 25, 2020

Four Japanese loan projects to contribute to socioeconomic life of local residents soon

By Htut Htut (Twantay)

State Counsellor Daw Aung San Suu Kyi’s first visit to Japan early November in 2016 was a historic one for the country during which she met with Mr Shinzo Abe, Prime Minister of Japan, and held discussions about various areas.
Speaking at the meeting, Japanese PM Abe said he expressed respect for Myanmar’s efforts on nation building under the leadership of State Counsellor Aung San Suu Kyi who shares the fundamental values of freedom, democracy, human rights, and rule of law with Japan and explained that Japan intends to give its full support at public and private levels to the new government as a friend of Myanmar. He also conveyed his hope to work with State Counsellor Aung San Suu Kyi, building upon this visit, to dramatically advance the relationship between Japan and Myanmar.
In response, State Counsellor Aung San Suu Kyi expressed her gratitude for the warm hospitality and while noting the historically good ties between Japan and Myanmar, she also voiced a desire to maintain the ties and move forward together with Japan as a trustful partner rooted in a longstanding friendship. She thanked Japan for its assistance, including in areas of peace and stability, up to now and the Japanese people for their warm support.
Prime Minister Abe explained that Japan fully supports Myanmar’s policy of promoting balanced development among states and regions to provide an economic buttress to national reconciliation that targets balanced development of rural and urban areas, and that Japan plans to contribute 800 billion yen over five years, starting 2016, at public and private levels in areas including assistance to areas with ethnic minority peoples, agriculture, Yangon urban development, electric power, airports, and human resource training, and to support renovations to hydropower facilities and expansion of regional hospitals as part of these activities.
On 21 January 2020, Mr MARUYAMA Ichiro, Ambassador of Japan to the Republic of the Union of Myanmar and U Maung Maung Win, Deputy Minister for Planning, Finance and Industry signed the Exchange of Notes with regard to the four projects, which will be implemented with the loan from Japan worth about 120,915 million Yen (approx. 1.1 billion USD), in Nay Pyi Taw.
The following projects are part of the implementation of the commitment of 800 billion Yen private-public assistance, which Prime Minister Shinzo Abe stated during the meeting with State Counsellor Daw Aung San Suu Kyi in November in 2016, within five years.

State Counsellor Daw Aung San Suu Kyi holds talks with Prime Minister Mr Shinzo Abe in Japan in 2016. Photo:Cabinet Public Relations Office
State Counsellor Daw Aung San Suu Kyi holds talks with Prime Minister Mr Shinzo Abe in Japan in 2016. Photo:Cabinet Public Relations Office

Yangon sewerage system development project
Loans of 45,900 million Yen will be provided to Yangon sewerage system development project for extensive renovation work as to the plans to expand waste water treatment, construct sewer pipes and improve the living environment of local residents in the commercial city of Yangon where a 10 % of the total population of the country is residing. Currently, most of human waste, domestic wastewater and wastewater from commercial entities flow into the river with untreated sewage, causing deterioration to water quality. By implementing this loan project, the capacity to treat the wastewater will be increased up to about 7 times by 2030 (two years after project completion), and the amount of wastewater treatment is expected to be about 130 times of the current amount. It is expected that the project will support the improvement of the living environment of the local residents.

Urban development project for reduction of traffic congestion and damages affected by the flood in Yangon
Loans of 24,085 million Yen will be provided to urban development project for the reduction of traffic congestion and the damages affected by the flood in Yangon with the intention of improving drainage and take measures against traffic congestion at level crossings on main roads and Yangon circular railway road in Yangon, the largest city of Myanmar with high economic growth. In the Yangon metropolitan area, there has been a five-fold increase in the number of registered motor vehicles as a result of high economic growth and the traffic congestion has been serious for a long time. In addition, due to the poor and capacity of existing drainage channels, floods occur during the rainy season, and it causes the deterioration in the traffic environment of the region and threatens the safety of citizens’ lives. With this loan mentioned above, about one third of the main drainage channels of the region will be improved and the measures for reducing traffic congestion and ensuring traffic safety on the main roads and Yangon circular railway road will be taken. Therefore, it is expected that the project will contribute to the economic and social development of Yangon City.

Power distribution improvement project in Yangon and Mandalay
Loans of 12,288 million Yen will be provided to power distribution improvement project in Yangon and Mandalay, the major commercial cities in Myanmar. It is aimed at repairing and expanding electricity distribution facilities in order to improve power supply in the major cities. In Myanmar, there has been a rapid increase in power demand due to recent developments and investments. In 2017, the maximum power demand was about 3,075 MW nationwide. In 2020, power demand is expected to increase up to 4,531 MW and the government of Myanmar is planning to boost the amount of power supply. However, measures to renovate and improve power distribution facilities have been delayed. But it is expected that there will be more power distribution facilities exceeding their capacity during 2020. Therefore, there is an urgent need to renovate and expand the power distribution facilities. Spending the loan mentioned above on the project, the distribution loss rate will be decreased only by 1 % in each city and reduce power outages caused by the insufficient capacity of the distribution facilities. Eventually, it is expected that the project will contribute to the economic development of Myanmar and the improvement of socio-economic life of the citizens especially in Yangon and Mandalay.

Regional infrastructure improvement project in Chin, Rakhine, Mon and Kayin States and Taninthayi Region
Loans of 38,642 million Yen will be provided to regional infrastructure improvement project in Chin, Rakhine, Mon and Kayin States and Taninthayi Region with the aim of improve the lives of local residents through new construction, renovation and installation of infrastructures necessary for life such as roads, bridges, electric power and water supply in rural areas of Myanmar. The poverty rate in the country is the highest in Chin State (73.8% poverty rate) and Rakhine State (43.5% rate), and the electrification and water supply rates are very low. The development of infrastructures has been a challenge for the economic development in the States and Regions with higher poverty rates. In addition, the development of those regions is emphasized in the “Ayeyawady, Chao Phraya and Mekong Economic Cooperation Strategy” (ACMECS). It is of importance to promote the stable economic development in the rural areas through progress of infrastructures in Mon and Kayin States and Taninthayi Region situated along the East-West Economic Corridor and the South Economic Corridors and it is expected to be improved in the future. With the loan mentioned above, 70 sub-projects including 35 for roads and bridges, 25 for electricity and 10 for water supply will be implemented to improve socio-economic life of local residents from those regions, thereby contributing to the stable socio-economic development in rural areas.

References: Press Release of Japanese Embassy to Myanmar and joint-statement of Ministry of Foreign Affairs of Japan

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