A company headed by a former Japanese minister has been pursuing a project to develop land owned by Myanmar's defense ministry through a joint venture with a military-affiliated firm, according to sources close to the matter.
With the ministry and the Southeast Asian country's ruling military acting as one body, there are concerns such business projects may become sources of income for the junta, which has killed more than 800 people and repeatedly violated human rights since it seized power from Aung San Suu Kyi's civilian government on Feb. 1.
The company, Japan Myanmar Development Institution Inc., headed by Hideo Watanabe, a former minister of posts and telecommunications and the chairman of the Japan Myanmar Association, said it has only been supporting Japanese companies interested in the project, which is currently on hold with its participants still undecided.
The company added that the lease contract for the land was signed and it has not begun paying rent, with the possibility of funds falling into the hands of the Myanmar military "unknown until we reach that stage."
The Japan Myanmar Association, which has more than 100 member firms, is involved in the Japanese government's support for Myanmar and the promotion of investment by private companies.
The association has a number of influential members from Japan's ruling and opposition parties sitting on its board, including Deputy Prime Minister and Finance Minister Taro Aso.
According to Myanmar government documents and other sources, Watanabe's company registered a joint venture with a military-affiliated company in 2016. Executives of the company and the joint venture are comprised of senior members from the Japan Myanmar Association, including Watanabe and his son Yusuke, who serves as the secretary general of the association.
A 2019 United Nations report found that foreign companies and joint ventures that have commercial ties to private firms with "enduring links to the Tatmadaw," as Myanmar's armed forces are known, contribute to funding its violations of human rights against the Rohingya minority.
In spite of the report, the joint venture moved ahead with plans to develop a complex on land owned by the Myanmar's Ministry of Defence in the country's largest city of Yangon, receiving approval from the Myanmar Investment Commission in April last year to invest about $42 million into the project.
The project, which was scheduled to begin commercial operation in May 2023, has since completed the construction confirmation process and a land lease has been signed. According to an estimate based on initial conditions described by a consultant company, the annual ground rent is around 300 million yen ($2.7 million).
Last month, Yusuke Watanabe wrote in an article for an English-language media site that he is in constant contact with Myanmar junta leader Senior Gen. Min Aung Hlaing, and stressed the need for Japan to continue to boost its "special relationship with the Tatmadaw."