Japan pledges $8.2b to 'Mekong Five'

(From left) Cambodia's Prime Minister Hun Sen, Laos' Prime Minister Thongsing Thammavong, Japan's Prime Minister Shinzo Abe, Myanmar's President Thein Sein, Thailand's Prime Minister Prayut Chan-o-cha, and Vietnam's Prime Minister Nguyen Tan Dung pri
(From left) Cambodia's Prime Minister Hun Sen, Laos' Prime Minister Thongsing Thammavong, Japan's Prime Minister Shinzo Abe, Myanmar's President Thein Sein, Thailand's Prime Minister Prayut Chan-o-cha, and Vietnam's Prime Minister Nguyen Tan Dung prior to the seventh annual Japan-Mekong summit in Tokyo last Saturday.PHOTO: EUROPEAN PRESSPHOTO AGENCY

Funds will support infrastructure projects, boost influence in the region against China

TOKYO • Japan has pledged US$6.1 billion (S$8.2 billion) in financial aid to the "Mekong Five" countries as it pushes infrastructure exports and courts influence in a region where China has an increasing presence.

Last Saturday, Japanese 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 750 billion yen (S$8.2 billion) in official development assistance for the next three years," Mr 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," he said.

He went on to add that "Japan will contribute to infrastructure development of the region in both quality and quantity".

It was not immediately clear if the pledge includes previously earmarked Japanese financial assistance, or whether it is made up entirely of newly allocated funds.

"The Mekong region is the most dynamic economic centre, but there still is room for huge growth," said Thai Prime Minister Prayut Chan-o-cha at the news conference.

The meeting came as the leading Nikkei business daily said last Friday that three Japanese companies had secured an order worth over 32 billion baht (S$1.3 billion) to equip a railway linking 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 such big-ticket projects.

Mr Abe has stepped up efforts to sell highways, train systems and power plants around the world 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, has prompted Japan 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 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 US$500 billion this year and US$1 trillion 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, Mr Abe in May announced a US$110-billion 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.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on July 06, 2015, with the headline 'Japan pledges $8.2b to 'Mekong Five''. Print Edition | Subscribe