Japan state-funded hotel deal pays rent to Myanmar defence ministry

A consortium of private Japanese firms and a Japanese state entity paid rent on a multi-million dollar hotel and office development that ultimately went to Myanmar’s defence ministry, six company and government officials told Reuters.

It is the first time Japan has acknowledged the project benefits Myanmar’s defence ministry, which is controlled by the military under the country’s constitution. The payments, starting in 2017, are not illegal but are potentially embarrassing for Japan given United Nations investigators have alleged human rights abuses by Myanmar’s military. Reuters could not determine how much rent was actually paid to the defence ministry.

Known officially as the Tatmadaw, Myanmar’s military is under investigation for genocide by the International Court of Justice over its offensive against Rohingya Muslims in 2017. The military seized control of the country in a February 1 coup and has since detained the country’s elected leader and killed more than 261 protesters.

Myanmar’s defence ministry and the military junta could not be reached for comment. Myanmar’s army has said its action against the Rohingya were “clearance operations” targeting militants and the government has rejected accusations of human rights abuses and genocide as false. The junta has blamed the killings since the coup on protesters themselves, accusing them of arson and violence.

The Y Complex, built on army-owned land near the Shwedagon Pagoda in Yangon, is just one of many assets and projects linked to Myanmar’s military, which has ruled the country for the majority of the last 60 years.

The military controls two conglomerates with interests ranging from mining to banking. Some foreign investors have struck partnerships with the conglomerates over the past decade as Myanmar’s democratic government attempted to open the country’s economy.

Each party to the Y Complex deal told Reuters they thought the rent, which was paid by an intermediary, ultimately was going to Myanmar’s government, not the military.

Ryota Nagao, an official at the international policy division of Japan’s land ministry, which approved the state agency’s investment, said the ministry had judged the project was not dealing with the military “directly or indirectly” because the defence department was a government ministry. He declined to comment on the fact that Myanmar’s defence department is controlled by the military, under the country’s 2008 constitution, drafted during previous army rule.