Myanmar President Thein Sein, his government braced to emerge from Western sanctions, arrived in Tokyo on Friday to discuss debt forgiveness and development aid in the first visit by the country's head of state to Japan in nearly three decades.
Myanmar, run by the military for five decades until a year ago, has undertaken a series of reforms, allowing the main opposition to run in parliamentary by-elections, releasing detainees deemed political prisoners and easing restrictions on the press.
The United States has eased some sanctions against the southeast Asian country and French Foreign Minister Alain Juppe said on Friday that the European Union would suspend its punitive measures next week in recognition of the reforms.
Thein Sein's visit is his first to a major industrialised power since the changes were introduced, though he has already been to China and India.
The president attended a reception hosted by Japanese business lobbies on his first day and will take part in a six-way meeting between Prime Minister Yoshihiko Noda and top leaders from Cambodia, Laos, Thailand and Vietnam.
He is expected during the five-day visit to clinch an agreement with Noda on debt forgiveness and a resumption of Tokyo's development loans to pay for much-needed infrastructure projects.
Japanese companies have long conducted business in Myanmar, but interest has grown since the reform-minded government took office, particularly in its planned industrial zones.
Myanmar is setting up Special Economic Zones in Thilawa, south of Yangon, Kyaukphyu, on the Bay of Bengal and a $50 billion project to the south in Dawei, which could become Southeast Asia's biggest industrial estate.
Japan is ready to resume low-interest, long-term development loans to Myanmar as it introduces more democratic and economic reforms, a source close to the matter told Reuters this week and the two countries are completing details of debt forgiveness.
The Asahi Shimbun newspaper said in its evening edition on Thursday that Noda will agree to forgive about 300 billion yen ($3.68 billion) in debt when he meets Thein Sein on Saturday.
Myanmar's government has made no comment.
The limitations of Myanmar's transport system could present logistical problems for investors planning to use the country as a manufacturing base. Railways cover only a handful of routes and many roads are in poor condition, even its new ones, while an estimated 75 percent of the country is without access to reliable electricity.
Democracy advocate and Nobel Peace Prize laureate, Aung San Suu Kyi won a seat in parliamentary by-elections this month, in which her National League for Democracy swept 43 of 45 legislative seats contested.
But the main opposition's participation in the lower house is in doubt because of differences with authorities over the wording of an oath to be taken by newly-elected members.
The NLD's absence would be a setback for reformers in the government who want to legitimise the new political system. ($1 = 81.5450 Japanese yen)
(Editing by Ron Popeski)