Although it scaled back most business activity and cut government aid when the U.S. and other Western nations imposed sanctions in 2003 after the previous, military regime put Suu Kyi under house arrest, Japan did not impose sanctions on Myanmar.

Suu Kyi and the current Japanese government thus are still developing relations, said Eitaro Kojima of the Japan External Trade Organization, who lived in Myanmar for years.

"We need to understand each other," he said.

Over the past decade, Japan continued small-scale humanitarian assistance to Myanmar as part of its policy of engagement with the regime. Many Japanese businesses also kept their offices and business registrations. The maintenance of commercial and government relations is proving vital now that Myanmar is embarking on its economic reforms

Japan's biggest contribution so far to Myanmar's economic reform effort has been the debt forgiveness arrangement, involving billions of dollars in bridge loans by Japanese banks, that enabled the Asian Development Bank and World Bank to resume lending for crucial humanitarian and infrastructure projects.

Underscoring the government's keenness for closer cooperation, Finance Minister Taro Aso made Myanmar his first overseas destination after taking office late last year. Although the visit had been planned much earlier, it also reflected Tokyo's determination to drum up business in fast-growing Southeast Asian markets to help counterbalance Japan's vulnerability to problems with China over territorial and other disputes.

Of the 35 Japanese projects under way in Myanmar, the biggest is one to develop the 2,400 hectare (5,900 acre) Thilawa special economic zone south of the capital, Yangon, which is being led by a Japanese consortium of major trading houses, including Mitsubishi ( MTU), Marubeni and Sumitomo ( SMFG).

To support that project, Japan has promised 20 billion yen ($200 million) in long-term loans for related infrastructure such as power plants, roads and bridges at an interest rate of 0.01%.

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