Japan halts plans to finance Yangon-Mandalay Railway Development Project
The Japanese government has cut official development aid for the Yangon-Mandalay Railway Development Project, a longstanding representation of cooperation between Japan and Myanmar.
The Asahi Shimbun, a Japanese newspaper, reported on May 31 that the cessation of aid was intended in part as a condemnation by the Japanese government of Myanmar’s 2021 military coup.
The Japanese government had lent assistance to the project since 2013 but announced in 2022 that after the coup it had decided not to provide more loans needed for construction, a decision the Myanmar military called “understandable.”
According to the records of Myanmar Railway Department, the project for upgrading the Yangon-Mandalay railway, which stretches a total of 385 miles, was financed with a loan of over US$2 billion from Japan and a budget allocation of $468 million.
Plans and surveying for the project began in 2013, with construction beginning in 2018. The Japanese government agreed to lend $1 billion to the project during the civilian administration of the National League for Democracy (NLD), later forcibly ousted by the military in February 2021.
The railway upgrade project is currently less than 25 percent complete. During Myanmar and Japan’s period of cooperation on the project, Myanmar nationals’ duties included securing supplies of paving materials, pouring concrete, and other construction-related matters while Japanese companies were entrusted with all other necessary tasks.
The Japanese government had initially planned to finance the project until it was finished, but notified the military council to “cancel certain parts of the project” in November 2022, The Asahi Shimbun reported, citing diplomatic communications.
“It is with great difficulty that we came to the decision to stop providing loans,” said one message from the Japanese government to the military council.
In explaining the decision, Japanese officials cited falling exchange rates for the yen, the deteriorating security situation in Myanmar, and various risks and difficulties resulting from the global pandemic. Their communications also emphasised that the Japanese government would not continue to provide financing for projects that had begun before the coup.
Despite these developments, the coup regime leader Min Aung Hlaing has continued to tout upgrades to Myanmar’s existing railway systems, as well as future plans to run electric and subterranean train systems.
On a visit to the Thazi-Myingyan railway upgrade project earlier this week, he told the working staff to “push hard until all the trains in the country are moving at 100 kilometres an hour.”
State-owned newspapers also released enthusiastic reports on a “circular railway system” built near Htithein Station in southern Shan State, which is modelled on the “circle of life” railway built during the colonial era.
During a visit to the railway system on Monday, Min Aung Hlaing exhorted the onsite personnel to “plant more trees” around the track so passengers would enjoy a “pleasant sightseeing experience.”