By Aye Aye Win, AP – May 26, 2013

http://abcnews.go.com/International/wireStory/japan-myanmar-504m-loan-forgives-debt

Japan’s government on Sunday extended its first loan to Myanmar in 26 years and canceled the remainder of the Southeast Asian country’s debt, as Tokyo looks to re-establish strong economic ties with the former pariah nation.

The 51 billion yen ($504 million) loan agreement was signed in Myanmar’s capital, Naypyitaw, after Japanese Prime Minister Shinzo Abe met with Myanmar President Thein Sein.

Abe arrived in Myanmar on Friday on the first visit to the country by a Japanese leader in 36 years, a major part of Tokyo’s effort to reassert its position as a top economic partner after decades of frosty relations with the previous military regime.

Abe had met with Myanmar democracy icon and lawmaker Aung San Suu Kyi in the main city of Yangon on Saturday.

The low-interest loan was signed between Japan’s ambassador to Myanmar, Mikio Numata, and Myanmar’s deputy minister for finance and revenue, Dr. Lin Aung, Japan’s Foreign Ministry said in a statement. Japan also canceled the remaining 176.1 billion yen ($1.74 billion) owed by Myanmar, after forgiving 326.3 billion Yen ($3.58 billion) in debt in January.

The loan is Japan’s first to Myanmar since 1987.

“The government of Japan considers it important to continue to back up the progress of Myanmar’s reforms and will continue its support to Myanmar,” the Foreign Ministry’s statement said.

According to the notes exchanged Sunday, 17 billion yen ($168 million) is to be used for infrastructure improvement in Myanmar, 14 billion yen ($138 million) for electricity generation, and 20 billion yen ($198 million) for power generation and transmission and distribution of energy at a special economic zone.

The development of the 2,400-hectare (5,900-acre) Thilawa Special Economic Zone, located near Yangon, is Japan’s biggest investment project in Myanmar, led by trading companies Mitsubishi Corp., Marubeni Corp. and Sumitomo Corp.

Japan, Myanmar’s largest aid donor, helped clear part of its unpaid debt in an effort to boost Myanmar’s democratic reforms and open ways to resume fresh loans for infrastructure building and major development assistance that will support Japanese business interests in the Southeast Asian nation.

Japan had close ties with Myanmar before the junta took power in 1988, prompting Tokyo to suspend grants for major projects. 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 military regime put Suu Kyi under house arrest, Japan did not impose sanctions on Myanmar.

But with no major development grants or Japanese loans, major Japanese corporations maintained branch offices in Myanmar with minimal business operations during the previous regime, while neighboring China gradually became Myanmar’s major trade partner and investor after Thailand and Singapore.

Japan’s investments and involvement lag far behind those of China and India, but that is fast changing. A high-powered delegation of business leaders, including top executives from Toyota Motor Corp., Hitachi Ltd. and Sumitomo Chemical, toured Myanmar, also known as Burma, in February and pledged to cooperate in encouraging more investment.

SanJAsKa and the Pleiadian High Council: Pure Love Creates and Sustains Your Realities

Israel's president calls for return to peace talks

SOUTHERN SHUNEH, Jordan (AP) — Israel's president on Sunday urged Israeli and Palestinian leaders to overcome differences and resume peace negotiations, saying the sides could not afford "to lose this opportunity."

President Shimon Peres issued his call ahead of a gathering of Mideast leaders on the sidelines of a conference hosted by the Geneva-based World Economic Forum on the shores of the Dead Sea in Jordan.

Sunday's conference included a rare face-to-face meeting between Israeli and Palestinian leaders, with the participation of U.S. Secretary of State John Kerry, who has devoted much of the past two months to restarting long-stalled peace talks.

"We shouldn't lose the opportunity because it will be replaced by a great disappointment," Peres told reporters in Jordan. "For my experience, I believe it's possible to overcome it. It doesn't require too much time."

Palestinian President Mahmoud Abbas agreed.

"Enough is enough. A lot of our young people have started to lose confidence in the two-state solution," he said to a loud applause from an audience of more than 1,000 business and government leaders from 23 countries worldwide.

He blamed the growing mistrust on Israeli moves, essentially construction in West Bank settlements and detention of hundreds of Palestinians.

Abbas reiterated his rejection of partial solutions. "We will neither accept interim solutions, nor a state with temporary borders or a peace based on economic perks without progress on the political track," he said.

At one point in the closing session, Kerry joked with Abbas and Peres — who exchanged hugs, kisses, handshakes and emotional speeches — telling both from the podium that he had an "agreement you can come up and sign."

Abbas peeked at Peres, pointing to the podium. Then both laughed.

Palestinian-Israeli peace talks broke down nearly five years ago, in large part due to disagreements over Israeli settlement construction on occupied territories claimed by the Palestinians. The Palestinians say there is no point in negotiating while Israel continues to build Jewish settlements in the West Bank and east Jerusalem, which they say undermines their quest to set up an independent state. The Palestinians want both areas, captured by Israel in 1967, as parts of their state.

On his fourth visit to the Middle East since taking office in February, Kerry held talks with Abbas andIsraeli Prime Minister Benjamin Netanyahu last week. He said during his latest regional swing that both sides must make hard decisions to move toward direct negotiations.

Peres, who won the 1994 Nobel Peace Prize for helping forge an interim deal with the Palestinians, sounded upbeat and determined to help in peacemaking with Palestinians.

"It is time for peace," he said. "I believe this is an important opportunity to (engage), not to waste time, return to negotiations and complete the negotiations with the Palestinians."

He said a peace agreement must be "based on a two state solution: an Israeli state, a Palestinian state living as good neighbors cooperating economically and bringing a message to the young generation."

For decades an ardent supporter of peace with the Palestinians, Peres holds a ceremonial role inIsrael, and his views are highly respected in Israeli society. Netanyahu, who has most decision-making powers, holds more hawkish positions than Peres and has given few signs of how he sees a final peace deal with the Palestinians.

While Netanyahu has endorsed the concept of a two-state solution, the Palestinians accuse him of undermining that goal through his actions. In particular, they object to continued settlement construction and Netanyahu's refusal to endorse Israel's pre-1967 lines as the basis for a future border.

Netanyahu has called for resumption of peace talks without preconditions, saying all those issues would be on the table.

Israeli media reported that Peres discussed with Netanyahu some key issues he is expected to raise at Sunday's forum.

Earlier Sunday, a group of Israeli and Palestinian businessmen at the conference unveiled a plan to push their leaders to begin serious peace negotiations.

"We're using our collective business experience and influence to convince leaders on both sides that peace is a must," said Palestinian business tycoon Munib Masri.

Masri said he was leading the initiative, called "breaking the impasse," along with Israeli high-tech guru Yossi Vardi. He said they would lobby both sides to make peace.

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US, China set the stage for Obama-Xi summit

BEIJING (AP) — An upcoming summit with President Barack Obama comes at a "critical juncture" in relations between China and the U.S., Chinese President Xi Jinping said Monday, underscoring the challenge they face in confronting divisive security issues and overcoming growing distrust.

Xi told U.S. National Security Adviser Tom Donilon — who was inBeijing to prepare for the June 7-8 meeting — that he expected positive results from the talks, which will be their first face-to-face meeting since Obama's re-election and Xi's promotion to head of the Communist Party last November.

"The current China-U.S. relationship is at a critical juncture," Xi said. The sides must now "build on past successes and open up new dimensions for the future."

In a sign that both sides want to stem a drift in ties, the summit is taking place months earlier than the two presidents were supposed to meet. The setting — at the private Sunnylands estate of the late publishing tycoon Walter Annenberg in southern California — is supposed to be informal, giving Xi and Obama a chance to build a rapport.

Donilon flew to Beijing this week to prepare an agenda and straighten out other technical issues. He told Xi that Obama is "firmly committed to building a relationship defined by higher levels of practical cooperation and greater levels of trust, while managing whatever differences and disagreements might arise between us."

Meeting earlier with State Councilor Yang Jiechi, China's senior foreign policy official, Donilon said the summit is a chance for the two presidents to work through problems. Though they did not identify those challenges in their public remarks, ties are strained across the board, from longstanding differences over the Iranian and North Korean nuclear programs to new disputes over cyberattacks and China's more assertive pursuit of territorial claims against U.S. allies Japan and the Philippines.

"The meeting will be an important opportunity for our presidents to have in-depth discussions about U.S.-China relations, and a wide range of global and regional challenges facing both our countries," Donilon said.

That Xi agreed to an informal summit has been seen by Chinese and U.S. experts as positive. His predecessors always preferred formal state visits, splashing images of White House ceremonies and banquets in the Chinese media to bolster their standing as world statesmen.

Good will aside, distrust has deepened in relations in recent years as the U.S. feels its world leadership challenged and China, its power growing, demands greater deference to its interests and a larger say over global rule setting. Chinese officials and state media regularly say Washington is thwarting China's rise, strengthening alliances in Asia to hem in Beijing and discouraging Chinese investment in the U.S. on grounds of national security.

The official Xinhua News Agency reported Monday that ships and submarines from the Chinese navy's three fleets staged drills in the South China Sea late last week. The area is already a flashpoint, with Beijing's aggressive claims to disputed islands having rattled the Philippines, Vietnam, Malaysia and Brunei.

On Sunday, Li Keqiang — on a visit to Germany in his first trip abroad as China's premier — pressed China's claim to a cluster of East China Sea islands held by Japan. Traveling to Potsdam, where allied powers declared the terms for Japan's surrender 68 years ago in the waning days of World War II, Li told reporters that Japan must not "deny or glorify the history of fascist aggression."

The aggrieved sense emanating from Beijing goes beyond recent flare-ups in old territorial disputes. The website of the People's Daily, the Communist Party's flagship newspaper, is running a recurring column that takes a critical look at Americans and their institutions. First called "Immoral, dishonest Americans," the title of the column was changed to "The Americans you don't know about."

One item on Donilon's summit plans is the guest list. Xi will stop in California after formal visits to Trinidad and Tobago and Mexico where he will be accompanied by a large group of senior officials. If that entourage descends in full on the Sunnylands estate, U.S. diplomats said the White House might feel the need to bring similarly large numbers, making the summit less intimate.

AP EXCLUSIVE: NKorea relaxes controls on salaries

AP EXCLUSIVE: NKorea relaxes controls on salaries but says move not signal of opening

Associated Press -

In this Monday, April 9, 2012 photo, North Korean women work in a thread factory in Pyongyang, North Korea. A North Korean economist said that the government introduced new economic management methods in April 2013 that relax state control of workers' salaries. (AP Photo/David Guttenfelder)

PYONGYANG, North Korea (AP) -- North Korea relaxed state control of salaries last month, a government economist said, outlining a change in policy intended to boost production by giving companies latitude to provide workers with financial incentives.

In an interview with The Associated Press, Ri Ki Song, a professor at the Institute of Economics at North Korea's Academy of Social Sciences in Pyongyang, said enterprises are now allowed to use some of their earnings to pay workers more.

Until recently, most salaries were set by the state. The new policy gives managers of factories and other businesses the right to determine workers' salaries if they are able to improve productivity. The change follows a similar move last year to give managers at North Korean farms more power to make management decisions and to allow farmers to keep any surplus harvest to sell or barter instead of turning them over to the state.

"After repaying the state for its investment, enterprises can set salaries themselves, regardless of salaries fixed by the state, and pay workers according to their performance," Ri said last week. Companies must also put aside funds for investment, continued production, development of technology and cultural activities, he said.

But Ri said the new economic management methods enacted April 1 were not signs that North Korea is adopting a capitalist free market system.

"This is nothing to do with reform and opening," Ri said. "As I've said, the socialist ownership of the means of production is firmly established in our country, and we defend this."

Foreign governments have looked for indications that North Korean leader Kim Jong Un might be open to reform since coming to power in December 2011. North Korea has a per capita GDP of $1,800 per year, according to the U.S. State Department, just a fraction of the living standards in its Northeast Asian neighbors, Japan and South Korea.

Kim, the third generation of his family to lead North Korea since 1948, inherited a nation plagued by chronic food, fuel and power shortages. He has said improving the economy is a priority, acknowledging economic hardship in North Korea and pledging to raise the standard of living.

Kim in a speech in January said the country's most important task is the "building of an economic giant" and called for all of the year's economic undertakings to be aimed "a radical increase in production and stabilizing and improving the people's living standards."

"We should hold fast to the socialist economic system of our own style, steadily improve and perfect the methods of economic management on the principle of encouraging the working masses to fulfill their responsibility and role befitting the masters of production," Kim said.

However, Kim also has made the costly building of a nuclear arsenal a priority at a time when the United Nations says two-thirds of the population is coping with chronic food shortages.

The new policy on salaries went into effect after a trial period, Ri said.

"In the past, the state used to fix standard salaries, which meant you couldn't pay more than a certain amount," he said.

Now, factories and enterprises that perform well will be allowed to raise salaries, Ri said.

"And individual workers who work more can earn more," he said.

Last September, AP quoted farmers as saying new directives aimed at boosting productivity at collective farms give managers more control over decisions on how to farm the land and allow farmers to keep any surplus after they fulfill state-mandated quotas.

By giving farmers incentives to grow more food, North Korea could be starting down the same path as China when it first began experimenting with a market-based economy, analysts said.