Tuesday, March 1, 2016

NLD to scrutinise special economic zones

Myanmar Times | Tuesday, 01 March 2016

As speculation mounts over whether the new government will back Myanmar’s divisive special economic zones, a National League for Democracy spokesperson says in theory such projects are good for the economy and will continue to receive support.

A worker rides a motorbike at the Dawei special economic zone construction site.
(Aung Myin Ye Zaw / The Myanmar Times)

However, the party will need to scrutinise details before deciding whether or not individual projects have a future, said U Han Thar Myint, a member of the NLD economic committee.

Of the three SEZs conceived by Myanmar’s outgoing administration, two have stalled amid much controversy. Managed well, special economic zones can benefit an economy, allowing innovative policies to be tested in a controlled area and boosting investment.

Over the past few years, despite the hype surrounding all three projects, only Japanese-backed Thilawa SEZ near to Yangon has made any real progress. The other two zones – Thai-funded Dawei SEZ in Tanintharyi Region and Chinese-backed Kyaukphyu SEZ in Rakhine State – have been delayed for a number of reasons including local opposition and a lack of funding.

U Han Thar Myint of the NLD’s economic committee said it is too early to take a stance on their future.

It is clear that the project in Thilawa has been a success, he said, but the NLD does not yet have detailed information about the zones in Dawei and Kyaukphyu, as the relevant ministries have not handed over project documents.

“Until we have the details and figures about the SEZs under development we cannot form a plan,” he told The Myanmar Times. “But there are many examples of successful special economic zones in other countries that prove they can be very useful for Myanmar.”

The NLD will need to study commitments made by the former government to investors, and speak with the relevant state and regional governments and local residents, before deciding whether the projects in Dawei and Kyaukphyu should continue, he said, adding that a balanced and informed choice will be made.

Ko Zaw Aung, a freelance social researcher, said that civil society groups have opposed the projects because of their negative effect on local residents, adding that local people should be treated fairly and supported by the government. More equitable policies and laws could improve public sentiment about the zones, he added. “The new government has been highly recommended by the people, so its policies and laws will be better than those set by the old government. I am optimistic, and hoping to see many good things.”

Ichiro Maruyama, minister-counsellor at the Japanese embassy, said Thilawa could be used as an example for developing the other two zones. Thilawa’s proximity to Yangon meant it was a priority, he said, adding that Japan is now in discussions to help fund the project in Dawei.

Dawei SEZ was originally designed to be one-quarter the size of Singapore, creating hundreds of thousands of jobs and generating up to 5 percent of Myanmar’s GDP. However, approvals and funding have proved challenging, as has winning local support.

Work began on the initial phase last year, almost a decade after the original MoU was signed. U Han Sein, the chair of Dawei SEZ Management Committee, said he hoped the new government would allow the project to continue. “This is our first experience of a new government, but we believe it will support projects started by the old government. SEZs help countries to develop, and should be built regardless of who is in power,” he said.

The zone in Kyaukphyu will be developed by China’s CITIC. U Aung Kyaw Than, joint secretary of the Kyaukphyu SEZ tender evaluation committee, said he believes the project will continue, as new parliamentarians have a responsibility to uphold commitments made by the former government.

However, a report published by BMI Research last week said its development will be disrupted by security risks. “Looming ... risks stemming from ongoing ethno-religious tensions, environmental concerns and opposition to Chinese investment, will plague the construction of the SEZ and threaten its future success,” the report said.

“While CITIC has made promises about how the SEZ will benefit the local community … past Chinese investment projects have shown that Chinese companies prefer to bring their own workers and their projects may not bring significant benefits for local communities.”