By Kiyoshi Takenaka
TOKYO (Reuters) - Japan will provide aid worth 800 billion yen ($7.73 billion) to Myanmar over five years to support its peace-building and development efforts, Prime Minister Shinzo Abe said on Wednesday.
About 40 billion yen of the aid planned by the government and private sector will be directed towards supporting ethnic minorities in the South East Asian nation.
"We hope this aid will help spread the fruit of peace building to various regions in Myanmar, and drive it forward," Abe told a joint news conference in Tokyo with Myanmar leader Aung San Suu Kyi.
The rest of the aid would be spent on areas such as airports and electricity projects, Japanese officials said.
Suu Kyi is visiting Japan to court investment and aid, as an upsurge in violence against a persecuted Muslim minority at home poses a crisis after six months in power and triggers U.S. criticism.
Soldiers have poured into an area of northwestern Rakhine state in a crackdown on Rohingya Muslims following attacks launched by an insurgent group the government believes has ties to overseas Islamists.
Residents and human rights advocates have said government forces have committed abuses, including summary executions, rape and setting fire to homes.
Myanmar needs Japanese investment and robust bilateral ties as a counterweight to its largest trading partner, China.
In turn, Japan is eager for opportunities to help Myanmar meet its extensive infrastructure and development needs.
Nearly 50 years of economic mismanagement by a military dictatorship have left Myanmar's roads, airports and electricity supply in disarray.
There is little homegrown industry and recent annual economic growth of 8 percent has been mostly underpinned by imports.
In September, U.S. President Barack Obama announced he would scrap most economic sanctions. Two weeks ago, Suu Kyi promised foreign investors a clearer legal framework and opportunities in untapped sectors.
Japan, which never imposed trade and financial sanctions on Myanmar, already has a significant presence, centered on the Japan-led Thilawa Special Economic Zone.
(Reporting by Kiyoshi Takenaka; Editing by Clarence Fernandez)