TOKYO – Japan and Myanmar have signed a total of 42.78 billion yen ($414 million) in low-interest loans to allow the Southeast Asian country to build road infrastructure and facilitate financing for small and midsize companies.
Of the total, 27.78 billion yen will be earmarked for a project to build a bridge on a road in the East-West Economic Corridor, a route that crosses Myanmar, Thailand, Laos and Vietnam, according to the Japanese Foreign Ministry.
The deal was signed Wednesday between Ichiro Maruyama, Japan’s ambassador to Myanmar, and Maung Maung Win, Myanmar’s deputy minister for planning, finance and industry.
The project involves a bridge on the road linking Bago and Kyaikhto, northeast of Yangon, a measure that will boost the logistics sector’s efficiency, the Japanese ministry said.
“Since the volume of trade with Thailand, the largest trading partner with Myanmar, is expected to continue to increase, it is essential to develop the East-West Economic Corridor to enhance the logistics sector’s efficiency,” the ministry said.
The remainder of the loans will be set aside to allow Myanmar small and midsize companies to obtain funds for stabilizing their businesses and expanding operations.
The coronavirus pandemic has dealt yet another blow to such companies with insufficient cash on hand.
The loans will help mitigate the economic impact of the virus on sound development of Myanmar’s industrial and business sectors, and create and retain employment, according to the ministry.
They will facilitate financial intermediaries’ function related to small and midsize companies, as well as maintain and expand such businesses’ production and investment in Myanmar.