Wed, 04 Oct 2023

TOKYO, Japan - The Japanese government has suspended official development aid for the Yangon-Mandalay Railway Development Project, a long-standing symbol of Japan-Myanmar cooperation.

According to the Asahi Shimbun, a Japanese newspaper, the cessation of aid was partly intended as a Japanese government condemnation of Myanmar's 2021 military coup.

The Japanese government has assisted in the project since 2013. Still, it announced in 2022 that following the coup, it had decided not to provide additional construction loans, a decision the Myanmar military described as "understandable."

According to Myanmar Railway Department records, the project to upgrade the Yangon-Mandalay railway, which spans 385 miles, was funded by a loan of more than US$2 billion from Japan and a budget allocation of $468 million.

The project's planning and surveying began in 2013, with construction beginning in 2018. During the civilian administration of the National League for Democracy (NLD), which was later forcibly ousted by the military in February 2021, the Japanese government agreed to lend $1 billion to the project.

The railway modernization project is currently less than 25% complete.

The Japanese government had planned to finance the project until it was completed, but in November 2022, the military council was notified to "cancel certain parts of the project," according to diplomatic communications obtained by The Asahi Shimbun.

"It was with great difficulty that we decided to stop providing loans," one message from the Japanese government to the military council stated.

Japanese officials cited falling yen exchange rates, Myanmar's deteriorating security situation, and various risks and difficulties associated with the global pandemic in explaining their decision. Their communications also stressed that the Japanese government would not continue to fund projects that had begun before the coup.

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