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Japan will provide aid worth 800 billion yen (US$7.73 billion) to Burma over five years to support its peace-building and development efforts, Prime Minister Shinzo Abe said on Wednesday.
About 40 billion yen of the aid planned by the government and private sector will be directed towards supporting ethnic minorities in the Southeast Asian nation.
“We hope this aid will help spread the fruit of peace building to various regions in Myanmar [Burma], and drive it forward,” Abe told a joint news conference in Tokyo with Burmese leader Aung San Suu Kyi.
The rest of the aid would be spent on areas such as airports and electricity projects, Japanese officials said.
Suu Kyi is visiting Japan to court investment and aid, as an upsurge in violence against a persecuted Muslim minority at home poses a crisis after six months in power and triggers US criticism.
Soldiers have poured into an area of northwestern Arakan State in a crackdown on Rohingya Muslims following attacks launched by an insurgent group the government believes has ties to overseas Islamists.
Burma needs Japanese investment and robust bilateral ties as a counterweight to its largest trading partner, China.
In turn, Japan is eager for opportunities to help Burma meet its extensive infrastructure and development needs.
Nearly 50 years of economic mismanagement by a military dictatorship have left Burma‘s roads, airports and electricity supply in disarray.
There is little homegrown industry and recent annual economic growth of 8 percent has been mostly underpinned by imports.
In September, US President Barack Obama announced he would scrap most economic sanctions. Two weeks ago, Suu Kyi promised foreign investors a clearer legal framework and opportunities in untapped sectors.
Japan, which never imposed trade and financial sanctions on Burma, already has a significant presence, centered on the Japan-led Thilawa Special Economic Zone.