Executive Summary: "Myanmar, also known as Burma, is an exception to many of the success stories of countries in the Asia-Pacific region. Throughout the postwar period the country has pursued a foreign policy line that has been obstinately indepen-dent, with a basic stance towards the outside world pervaded by a sense of noli me tangere. Once it was one of the key Asian countries convening the 1955 Bandung Conference at which the non-aligned movement was launched, but policies pursued since have made the country a peripheral member of the international community. One of the country?s key relationships in the postwar period has been with Japan. The beginning of this bilateral relationship goes back to the Second World War period. In December 1941, Japan began a mili-tary campaign into Southeast Asia and a puppet government for Burma under the Burmese nationalist Ba Maw was set up on August 1, 1942, which replaced British colonial rule. In May 1945, the British Army returned to Rangoon and the colonial masters regained power but two years later they agreed to hand over the ruling of the country to the Burmese, and Burma became independent in January 1948. In 1954, an agreement on war reparations was reached be-tween Japan and Burma totalling US$200 million over ten years, which began to be paid out the following year. Not only was aid from Japan forthcoming but it was increasing, from about US$20 million in the 1960s to around US$200 million in the 1970s. The aid amounted to a total of US$2.2 billion during 1962?1988. Japan became the largest aid donor to Burma. For Japan, the agreement with Burma was important in that a window of opportunity opened for Japan?s diplomacy towards Southeast Asian countries that had been at a standstill since the end of the Second World War. After a military coup in 1988, Japanese ODA to Burma was suspended‚ in principle,‛ and new aid was limited to projects that were of an ‚emergency and humanitarian nature.‛ Nevertheless, Japan was soon again accounting for the lion?s share of aid to the country. General elections took place in Myanmar in May 1990 and resulted in a serious setback for the military junta. The oppo-sition National League for Democracy (NLD) secured a landslide victory. The outcome did not result in a new government, since the ruling military ignored the election result of the NLD and refused to hand over power. In 1992 a shift of Japan?s ODA policy was announced with the adoption of Japan?s ODA Charter, which prescribed that decisions on ODA should be tak-en after taking into account the recipients? record on military spending, de-mocracy, moves towards market economy, and human rights. From this pe-riod a carrot and stick policy as codified in the ODA Charter has been applied to Myanmar which represented a clear break with Japan?s previous ‚hands-off‛ stance. A bifurcated Myanmar policy pursued by the Japanese govern-ment emerged, resulting from its efforts to relate to the two important political forces confronting each other in Myanmar. Nevertheless, there has been a strong bias on part of the Japanese government towards favoring relations with the ruling military. Relations between Japan and Myanmar have been receding ever since the military junta took power in 1988 and Japan instituted its policy of carrots and sticks. For Myanmar?s ruling junta, Japan?s carrot and stick policy was unwel-come news when it was first introduced, and has been seen ever since as an attempt by Japan to interfere in what the junta considers Myanmar?s internal affairs. With the junta in Myanmar facing international isolation after its sup-pression of democracy, China?s exchanges with Myanmar increased drastically. Soon after the 1988 coup, China had become the main external supporter of the Myanmar junta. In order to coming to grips with the situation around Myanmar a proposal has been launched focusing on the formation of an international coalition strong and viable enough to institute change. Due to its strong historical ties and good relations inside and outside Myanmar, Japan is one candidate for playing a key role in such an endeavor. With its strong links with all major forces, Japan occupies a pivotal position with a viable chance of bringing to-gether critical actors into a process of dialogue and reform. Two recent devel-opments increase the possibility that Japan and China would cooperate in such an endeavor. During Prime Minister Abe Shinzō?s visit to China in 2006 after only one week in office, he admitted that China played the key role in the negotiations with North Korea and expressed hope that China would exercise its influence. It was in realization of the fact that, in dealing with North Korea, Japan?s strong-handed policy of ‚dialogue and pressure‛ had not worked, which made the Japanese government conclude that united international ac-tion was needed if negotiations were to progress, and that chances were great-er to reach results if the Chinese could be persuaded to use their influence to talk the North Koreans out of their provocative policies. The second move that has a bearing on Japan?s Myanmar policy are the events surrounding the cold-blooded killing of the Japanese photographer Nagai Kenji during demonstra-tions in Yangon on September 27, 2007. An important step taken by Japan was the fact that Prime Minister Fukuda Yasuo brought up Myanmar in talks over the phone with Prime Minister Wen Jiabao of China the day after the fatal shooting, and asked that China, given its close ties with Myanmar, exercise its influence and Premier Wen said he will make such efforts. Abe?s visit to Beijing broke the ice between China and Japan, and a series of top-level meetings have followed. The two countries have clarified that they seem themselves to bear a responsibility for peace, stability, and development of the Asia-Pacific region and have agreed to together promote the realization of peace, prosperity, stability, and openness in Asia. Not only that, the two governments pledged to together forge a bright future for the Asia-Pacific re-gion. If Japan and China see themselves as bearing a responsibility for the peace, stability, and development of the Asia-Pacific region, it is hard to see how they can avoid being annoyed by the existence in their immediate neigh-borhood of a country that is widely treated an international outsider, especial-ly if they want to live up to their declared aim of aligning Japan?China rela-tions with the trends of the international community."