Many ongoing infrastructure projects have been suspended in the Southeast Asian country since the military ousted an elected government in a coup in February.
Japanese public-private fund has invested 17.7 billion yen ($163.3 million) in infrastructure projects in Myanmar without protecting itself against losses that could result from political risks, sources knowledgeable about the projects said Tuesday.
Many ongoing infrastructure projects have been suspended in the Southeast Asian country since the military ousted an elected government in a coup in February.
The investments of Japan Overseas Infrastructure Investment Corp. for Transport & Urban Development in the country equal slightly less than 20 percent of its total assets.
The entity has not taken out the kind of insurance for project delays or withdrawal from projects.
The investment fund is saddled with losses that had accumulated from previous investment projects. If the political chaos sparked by the coup drags on, as it looks increasingly likely to, its losses could mount further.
Private companies doing business in high-risk countries often protect themselves against an upheaval and other types of risks by taking out specialized insurance policies that would cover related losses to a certain degree.
A representative of the investment fund said it will "consult with others involved" on what it would do about its exposure in Myanmar.
The entity has invested in three redevelopment projects in the country's largest city Yangon and two port development projects in the Thilawa Special Economic Zone near Yangon.
But since the coup, people opposed to military rule have engaged in walkouts and civil disobedience movements, severely disrupting the local economy.
A senior official of a US consulting firm said the situation in the country would not allow those projects to go on.
The investment fund, known also as JOIN, was established in 2014 under the government of then Prime Minister Shinzo Abe to help push Japanese companies' infrastructure exports. It is 90 percent-owned by the Japanese government.
JOIN has racked up losses like other public-private investment funds, with 7.3 billion yen in accumulated losses at the end of March 2020. Some members of an advisory body to Finance Minister Taro Aso have floated the possibility of folding the fund if it is unable to improve its earnings.
Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.
Thank you for sharing your thoughts. We appreciate your feedback.