TOKYO (AP) -- Japan is moving ahead with financial and economic backing for Myanmar while working to clear its mountain of unpaid debt, part of a growing effort to shore up the impoverished country's economic and democratic reforms.
Japan's finance minister Koriki Jojima told finance chiefs and central bank governors of the Group of Seven industrialized nations on Thursday that Japan will extend new Japanese yen loans and as earlier agreed with Myanmar will move ahead next year with clearing its sizable outstanding debt to Tokyo.
G-7 finance leaders gathered in Tokyo for annual International Monetary Fund and World Bank meetings endorsed moves to shore up Myanmar's finances and support development projects, the Japanese Finance Ministry said in a statement.
The U.S. on Wednesday lifted restrictions on lending by international financial institutions such as the World Bank to Myanmar, eliminating almost all sanctions imposed during decades of oppressive military rule.
Myanmar owes about $950 million to the World Bank and the Asian Development Bank. They last extended loans in the late 1980s.
Tokyo has extended $6 billion in credit to Myanmar and has announced it will forgive about 60 percent, or $3.7 billion, of that debt. It plans to use bridge loans by Japanese banks to help clear the remaining arrears.
Japan's support for Myanmar will focus on infrastructure such as power generation, roads, ports and rural development.
Myanmar's finance minister and central bank governor attended the meeting Thursday and outlined the country's plans for "sound macro-economic management."
That includes setting up a modern banking system, foreign exchange market and other basic financial institutions, and reforming the nation's budget.
The country will consider resuming repayment of its debt to the World Bank and ADB while negotiating on the issue, said Myanmar's finance minister, U Win Shein.
The leaders attending the meeting in Tokyo emphasized the importance of including private businesses in investment plans and of monitoring reforms.
The Paris Club — an informal group of major economies that discuss debt restructuring issues — plans a meeting with Myanmar in January in Paris to negotiate an agreement with creditor countries to be implemented once its debts are cleared, the ministry said.
Myanmar President Thein Sein launched economic and political reforms when he took office last year after almost a half-century of military rule, during which time the economy languished under foreign sanctions and restrictive laws.
Attracting foreign investment and lending is crucial for aiding expansion of the resource-rich country's economy, which has an inefficient farm sector and little manufacturing but significant growth potential.