JAPAN SHIFTS FOCUS FOR ASSISTANCE TO BURMA

C O N F I D E N T I A L RANGOON 000905 SIPDIS SIPDIS STATE FOR EAP/MLS; PACOM FOR FPA; TREASURY FOR OASIA:AJEWELL E.O. 12958: DECL: 12/08/2015 TAGS: ECON PGOV EAID BM SUBJECT: JAPAN SHIFTS FOCUS FOR ASSISTANCE TO BURMA Classified By: Acting P/E Chief:TLManlowe for Reason 1.4 (b,d). ¶1. (SBU) Summary: After giving assurances that it will channel official foreign aid in Burma through NGOs, the Japanese government continues to provide some targeted financial and technical assistance directly to the GOB. However, the bulk of its support goes through the UN. Japan thus remains Burma's largest bilateral donor, while reducing its support to GOB budget and infrastructure. End Summary. ¶2. (C) Japan, Burma's largest bilateral donor, provided approximately $70 million in grant aid in 2001-2005 in projects including debt relief, upgrading power supplies, medical equipment, road construction, and crop substitution. The GOJ has reduced assistance to less than $10 million annually in recent years and, following the May 2003 attack against Aung San Suu Kyi, claimed that it would seek to channel most of its aid to "grassroots" projects outside of GOB control. Since 2005, the GOJ has funneled most of its aid through UN agencies, including the recent commitment of $1.6 million to UNICEF for communication programs on avian influenza. The GOJ also supports smaller projects through local organizations that have minimal government ties. Some bilateral assistance to the GOB, however, continues. We obtained documents signed in May and June 2006 that outline GOJ support of official Burmese environmental, education, and health projects. ¶3. (C) In June 2005, Ambassador Nobutake and Planning Minister Soe Tha signed Memoranda of Understanding (MOUs), including two on Human Resource Development and one supporting a forestry project in central Burma. The GOB and GOJ exchanged notes in May 2006 outlining Japan's 330 million yen (approximately $2.9 million) grant aid for reforesting efforts in Burma's dry zone. ¶4. (C) The University of Tsukuba in Japan and the University of Pathein in Burma drafted an Agreement on Academic Exchanges and Cooperation. The two universities would cooperate through exchange of professors, collaborative research, joint academic meetings, and information exchange. Also, the Ministry of Health sent a draft MOU between the Department of Traditional Medicine of Burma and the Department of Medical Science in Japan for approval. According to the MOU, both parties will implement programs to promote traditional medicine from 2006 to 2009. Japanese specialists will teach courses at Burmese universities, and will lead research and development of healing methods. ¶6. (C) Japanese diplomats in Rangoon told us that the GOJ wants to continue to help the Burmese people while reducing direct support for the government. They described difficulties they experienced in working outside government channels. For example, former Japanese Political Counselor Ichiro Maruyama told us the GOJ abandoned some educational projects in villages because their intended partners could not obtain the necessary GOB permits. Nevertheless, he said, they will continue to seek community-based organizations to support. ¶7. (C) Comment: Japan has acted on its commitment to move most funding from the direct support for GOB projects and budget that it financed in the past. The GOJ now provides most funding to the UN and to "softer" projects that focus more on capacity building. End comment. VILLAROSA