Japanese consortium in hotel deal that benefits Myanmar defence dept

TOKYO • A consortium of private Japanese firms and a Japanese state entity paid rent on a multimillion-dollar hotel and office development that ultimately went to Myanmar's Defence Ministry, six company and government officials told Reuters.

It is the first time Japan has acknowledged that the project benefits Myanmar's Defence Ministry, which is controlled by the military under the country's Constitution.

The payments, starting in 2017, are not illegal but are potentially embarrassing for Japan, given that United Nations investigators have alleged human rights abuses by Myanmar's military.

Reuters could not determine how much rent was actually paid to the ministry.

Known officially as the Tatmadaw, Myanmar's military is under investigation for genocide by the International Court of Justice over its offensive against Rohingya Muslims in 2017.

Myanmar's army has said its action against the Rohingya were "clearance operations" targeting militants and the government has rejected accusations of human rights abuses and genocide as false.

The military seized control of the country in a Feb 1 coup and has since detained the country's elected leader and killed some 275 protesters. The junta has blamed the killings since the coup on protesters themselves, accusing them of arson and violence.

The Y Complex, the hotel and office project in question, built on army-owned land near the Shwedagon Pagoda in Yangon, is just one of many assets and projects linked to Myanmar's military, which has ruled the country for the majority of the last 60 years. The military controls two conglomerates with interests ranging from mining to banking.

Some foreign investors have struck partnerships with the conglomerates over the past decade as Myanmar's democratic government attempted to open the country's economy.

Each party to the Y Complex deal told Reuters that they thought the rent, which was paid by an intermediary, ultimately was going to Myanmar's government, not the military.

Mr Ryota Nagao, an official at the international policy division of Japan's Land Ministry, which approved the state agency's investment, said the ministry had judged that the project was not dealing with the military "directly or indirectly" as the defence department was a government ministry.

He declined to comment on the fact that Myanmar's defence department is controlled by the military, under the country's 2008 Constitution, drafted during previous army rule.

Japanese construction company Fujita Corp said in a press release in 2017 that the Yangon project, converting a former military museum into a complex of swanky offices, shops and a five-star hotel, would cost US$330 million (S$444 million).

Fujita, property manager Tokyo Tatemono and Japan's state investment firm Join, which is overseen by Japan's Land Ministry, told Reuters that they formed a consortium that paid rent on the land that the complex is built on.

REUTERS