Japan’s Prime Minister Shinzo Abe (left) talks to Thailand’s Prime Minister Prayuth Chan-ocha (2nd from right) during the 7th Mekong-Japan Summit at the Akasaka State Guest House in Tokyo yesterday.
Japan yesterday pledged $6.1bn in financial aid to the “Mekong Five” countries as it pushes infrastructure exports and courts influence in a region where rival China has an increasing presence.
Prime Minister Shinzo Abe unveiled the pledge at a summit with his counterparts from Cambodia, Laos, Myanmar, Thailand and Vietnam – fast-growing economies through which the lower section of the Mekong river flows.
“Japan will implement support worth around ¥750bn ($6.1bn) in official development assistance for the next three years,” Abe told a news conference following the seventh annual Japan-Mekong summit.
“The Mekong region, which has vast demand for infrastructure, is one of our most important areas,” Abe said.
“Japan will contribute to infrastructure development of the region in both quality and quantity,” he added. “The Mekong region and Japan are partners that will develop together.”
It was not immediately clear if the pledge included previously-earmarked Japanese financial assistance, or whether it was made up entirely of newly-allocated funds.
“The Mekong region is the most dynamic economic centre, but there still is room for huge growth,” Thai Prime Minister Prayut Chan-O-Cha told the news conference.
The meeting came as the leading Nikkei business daily said on Friday that three Japanese companies had secured an order worth over 32bn baht ($947mn) to equip a railway linking the Thai capital Bangkok with nearby suburbs.
The Japanese government plans to offer loans to cover part of the cost, the newspaper said, a common sweetener that helps clients afford this kind of big-ticket projects.
In a separate deal, Japan, Thailand and Myanmar signed an accord for a Special Economic Zone (SEZ) in Dawei, southeastern Myanmar, local media said. When completed, the zone on the Andaman Sea coast will have a total area of 200 square kilometres (80 square miles), making it one of the largest SEZs in Southeast Asia and a gateway for the Mekong region’s trade with India, the Middle East and Africa, Kyodo News said.
Abe has upped efforts to sell highways, train systems and power plants around the world, a key element in his bid to bolster the economy and Japan’s standing abroad.
Beijing’s growing financial muscle, as well as its increasing willingness to throw its diplomatic weight around, have added urgency to Japan’s efforts to step up engagement in the battle for regional sway. Chinese Premier Li Keqiang said in November at a summit in Myanmar that Beijing’s strategic partnership with the 10-member Association of Southeast Asian Nations (Asean) grouping was entering a “diamond decade leading to broader and deeper cooperation”.
Then in March, Foreign Minister Wang Yi said China hoped to boost trade with Asean countries to $500bn this year and $1tn in 2020.
Beijing’s new Asian Infrastructure Investment Bank has also upped the stakes, rivalling the Tokyo-backed Asian Development Bank and offering the kind of financial firepower rapidly-developing countries are keen to tap.
In a bid to counter the Chinese move, Abe in May announced a $110bn investment plan for infrastructure projects in Asia, including in the “Mekong Five” states.
Japan is keen to be seen as the benevolent giant in the region and has worked hard to burnish a reputation as the nation bold enough to push back against China in territorial and other disputes.
Tokyo has its own spat with Beijing over islands in the East China Sea, but is increasingly vocal over China’s ambitions to control almost the whole of the South China Sea.
Vietnam is one of a number of countries that have territorial disputes with Beijing over this busy shipping area.
Siding with Tokyo and Hanoi, the participants jointly expressed “concerns” over the territorial disputes involving Beijing, saying in a statement that they “will further complicate the situation and erode trust and confidence and may undermine regional peace, security and stability.”
But the meeting avoided touching upon other sensitive issues for the region, including a growing migrant crisis. Some 100 protesters from Myanmar and Japan staged a rally in light rain over Myanmar President Thein Sein’s presence at the summit, demanding that Yangon release all political
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