Japan and Myanmar signed an investment treaty to nurture closer business ties. As Myanmar opens its fast-growing economy to more foreign commerce.
Prime Minister Shinzo Abe and Myanmar President Thein Sein signed the deal following a gathering of leaders from the Association of Southeast Asian Nations in Tokyo.
Japanese businesses are eager to invest in Myanmar and have stepped up their activities after Thein Sein's reformist government came to power in 2011. Japan's trade ministry said that the agreement wants to provide protections and a stable legal environment for investors.
Attracting foreign investment is crucial for aiding the expansion of Myanmar's resource-rich economy. The country has significant growth potential but is burdened with an inefficient farm sector. It also lacks a manufacturing base after decades of foreign sanctions and restrictive laws under military rule.
The treaty calls for Japanese investors to receive the same protections as other foreign investors under international rules and prohibits the imposition of export. It is also intended to improve transparency.
Japan is Myanmar's largest aid donor. Tokyo agreed to forgive $5.32 billion in debt owed by Myanmar to bridge loans to help clear the rest.
Abe promised to support Myanmar's economic and political reforms, including fresh loans for infrastructure building and major development assistance.
Japan's investments still lags behind those of China and India. Trading companies Mitsubishi Corp., Marubeni Corp. and Sumitomo Corp. are leading a project to develop a 2,400-hectare (5,900-acre) Thilawa Special Economic Zone, located near Yangon, Japan's biggest investment in Myanmar so far.
Prime Minister Shinzo Abe and Myanmar President Thein Sein signed the deal following a gathering of leaders from the Association of Southeast Asian Nations in Tokyo.
Japanese businesses are eager to invest in Myanmar and have stepped up their activities after Thein Sein's reformist government came to power in 2011. Japan's trade ministry said that the agreement wants to provide protections and a stable legal environment for investors.
Attracting foreign investment is crucial for aiding the expansion of Myanmar's resource-rich economy. The country has significant growth potential but is burdened with an inefficient farm sector. It also lacks a manufacturing base after decades of foreign sanctions and restrictive laws under military rule.
The treaty calls for Japanese investors to receive the same protections as other foreign investors under international rules and prohibits the imposition of export. It is also intended to improve transparency.
Japan is Myanmar's largest aid donor. Tokyo agreed to forgive $5.32 billion in debt owed by Myanmar to bridge loans to help clear the rest.
Abe promised to support Myanmar's economic and political reforms, including fresh loans for infrastructure building and major development assistance.
Japan's investments still lags behind those of China and India. Trading companies Mitsubishi Corp., Marubeni Corp. and Sumitomo Corp. are leading a project to develop a 2,400-hectare (5,900-acre) Thilawa Special Economic Zone, located near Yangon, Japan's biggest investment in Myanmar so far.