Japan pledges $6.1bn aid to 'Mekong Five' in bid for influence

Japan on Saturday pledged $6.1 billion in financial aid to the "Mekong Five" countries as it pushes infrastructure exports and courts influence in a region where rival China has an increasing presence.

Prime Minister Shinzo Abe unveiled the pledge at a summit with his counterparts from Cambodia, Laos, Myanmar, Thailand and Vietnam -- fast-growing economies through which the lower section of the Mekong river flows.

"Japan will implement support worth around 750 billion yen ($6.1 billion) in official development assistance for the next three years," Abe told a news conference following the seventh annual Japan-Mekong summit.

"The Mekong region, which has vast demand for infrastructure, is one of our most important areas," Abe said.

"Japan will contribute to infrastructure development of the region in both quality and quantity," he added. "The Mekong region and Japan are partners that will develop together."

It was not immediately clear if the pledge included previously-earmarked Japanese financial assistance, or whether it was made up entirely of newly-allocated funds.

"The Mekong region is the most dynamic economic centre, but there still is room for huge growth," Thai Prime Minister Prayut Chan-O-Cha told the news conference.

The meeting came as the leading Nikkei business daily said Friday that three Japanese companies had secured an order worth over 32 billion baht ($947 million) to equip a railway linking Bangkok with nearby suburbs.

The Japanese government plans to offer loans to cover part of the cost, the newspaper said, a common sweetener that helps clients afford these kind of big-ticket projects.

Abe has upped efforts to sell highways, train systems and power plants around the world, a key element in his bid to bolster the economy and Japan's standing abroad.

- Influence -

Beijing's growing financial muscle, as well as its increasing willingness to throw its diplomatic weight around, have added urgency to Japan's efforts to step up engagement in the battle for regional sway.

Chinese Premier Li Keqiang said in November at a summit in Myanmar that Beijing's strategic partnership with the 10-member Association of Southeast Asian Nations (ASEAN) grouping was entering a "diamond decade leading to broader and deeper cooperation".

Then in March, Foreign Minister Wang Yi said China hoped to boost trade with ASEAN countries to $500 billion this year and $1 trillion in 2020.

Beijing's new Asian Infrastructure Investment Bank has also upped the stakes, rivalling the Tokyo-backed Asian Development Bank and offering the kind of financial firepower rapidly-developing countries are keen to tap.

In a bid to counter the Chinese move, Abe in May announced a $110 billion investment plan for infrastructure projects in Asia, including in the "Mekong Five" states.

Japan is keen to be seen as the benevolent giant in the region and has worked hard to burnish a reputation as the nation bold enough to push back against China in territorial and other disputes.

Tokyo has its own spat with Beijing over islands in the East China Sea, but is increasingly vocal over China's ambitions to control almost the whole of the South China Sea.

Vietnam is one of a number of countries that have territorial disputes with Beijing over this busy shipping area.

Siding with Tokyo and Hanoi, the participants jointly expressed "concerns" over the territorial disputes involving Beijing, saying in a statement that they "will further complicate the situation and erode trust and confidence and may undermine regional peace, security and stability."

But the meeting avoided touching upon other sensitive issues for the region, including a growing migrant crisis.

Some 100 Myanmar and Japanese people staged a rally in light rain over Myanmar President Thein Sein's prescence at the summit, demanding that the Myanmar government release all political prisoners.