Friday, October 17, 2014

Unlocking Asean's doorway to global trade

The Nation October 14, 2014 1:00 am
Myanmar and Thailand have injected much-needed life into the Dawei mega-project, but a keystone of its success will be how it affects the communities living in its shadow

The good news is that Prime Minister Prayut Chan-o-cha and Myanmar's President Thein Sein have agreed to kick-start the stalled mega-project for Southeast Asia's largest industrial zone and port.

The bad news is that problems still plague construction of the Dawei Special Economic Zone, and the two leaders must solve everything from a capital crunch to social and environmental troubles before it can be pushed through to completion.

The vision is to create a strategic hub for regional transport and economic connectivity. Since 2008 Thailand has supported the private-sector-initiated construction of a deep-sea port at Dawei to link the Kingdom with Europe, the Middle East and Africa via the Indian Ocean, since Laem Chabang on the eastern seaboard is increasingly busy and congested.

Dawei is envisioned as a "doorway" to the East-West Economic Corridor, a massive transport-trade network that will connect Myanmar, Thailand, Laos, Cambodia and Vietnam and link the Indian Ocean with the Pacific. It is also a test case and role model for joint development ofAsean connectivity infrastructure.

The project began to take shape in 2010, when the construction conglomerate Italian-Thai Development (ITD) obtained a 60-year concession to develop the deep-sea port, industrial estate, road, rail and other infrastructure.

The government of Yingluck Shinawatra poured a lot of effort and resources into moulding the Dawei vision and its execution. Yingluck herself raised the issue every time she met Thein Sein, eager to talk about Dawei even when he was not. Yingluck assigned her Cabinet to champion the project. But, although Thailand and Myanmar set up a high-level joint committee to push forward, Dawei made little progress during Yingluck's tenure.

The major problem is capital - the project requires hundreds of billions of baht. The first phase alone involves about 20,000 rai (32 square kilometres) to serve light industries and needs around Bt30 billion in funding, according to ITD. Yingluck tried to lure Japanese investment, Tokyo businessmen paid little attention.

When Prayut seized power, investors were worried that the project would be snuffed out, but the military government was quick to clarify that it would continue the project with Myanmar.

ITD predicted last week that Prayut's visit to Myanmar would inject new life into Dawei and boost foreign investor confidence. Yet the need for capital and partners remains an issue for Prayut's government.

Other problems lawmakers need to tackle are the environmental and social impact of the mega-project, including evictions due to land expropriation, inadequate and unfair resettlement and compensation for farmers, and other damage to local communities' social and economic wellbeing.

Affected residents have formed the Dawei Development Association, pleading with the Thai and Myanmar governments to pay more attention to the project's impact on their lives. It is estimated that 20 to 36 villages, totalling 22,000 to 43,000 people, will be directly affected by the construction of the Dawei industrial estate, ports, road links, reservoirs and resettlement areas.

Myanmar has said one aim of the project is to develop the south of the country. But a crucial feature of good development is real efforts made to safeguard the wellbeing of citizens. Without such efforts, there is a danger that this "development" will blight, rather than boost, living standards for the communities in its shadow.