The Dawei Special Economic Zone still appeals to Japan, but for now its attention is focused on Thilawa, another industrial zone.
Masaki Takahara, managing director of the Japan External Trade Organisation's Yangon office, said recently that Japan realised the importance of Dawei for |connectivity within Asean, but the country cannot stretch itself to develop both |Thilawa and Dawei, as both projects are massive.
Japan could shift its focus to Dawei only after setting up a joint venture for the development of the Thilawa Special Economic Zone or after the groundbreaking or the commencement of construction of Thilawa, he told The Nation on the sidelines of the Myanmar Global Investment Forum in Nay Pyi Taw.
"Right now, the Japanese government and Japanese consortiums are engaged in the development of Thilawa. I think when the Japanese government finishes a certain task on the Thilawa project, they can leave the project to the private sector. After that, I think that Japan will shift its focus to the Dawei project," he said.
Thailand has been courting Japan to invest in Dawei, whose development concession was awarded to a Thai company - Ital-Thai Development. Progress on the 160,000-rai project has been like molasses due to its huge cost. The Thai government has played a role in wooing foreign partners to ensure that the project kicks off and complements Thailand's envisioned East-West Corridor.
The development of Thilawa, covering 2,400 hectares or 15,000 rai, was assigned to Japan. The first phase of 400 hectares is scheduled for completion by 2015, along with infrastructure such as roads, bridges, sewage systems, and water and electricity utilities.
Japanese investors, especially manufacturers, are expected to pour in once the infrastructure is ready. Interest has been high among Japanese firms to enter Myanmar. According to Jetro, about 5,000 businessmen from Japan are seen at Yangon Airport and 500-800 visit its office per month. Out of the 73 Jetro offices overseas, Yangon is now the busiest.
Takahara, who spent a year and a half in Myanmar, said traffic could be heavier next month when the rain stops.
Myanmar is an attractive destination thanks to wider coverage of the market in Japanese media, he said. Plus, the ageing society, indicating lower spending, forces Japanese companies to look overseas.
Myanmar is also the market that has not been tapped by the Europeans or Americans or Japanese Japan's competitors. Interest is in all industries. Jetro expects a wave of investment from garment companies as well as auto and auto-parts makers, who are doing feasibility studies.
"What's really happening is that more and more Japanese investors who are looking for opportunities in the domestic market to sell their products, to sell their services, are coming, such as construction, logistics, retail, consumer goods, business services including accounting, law firms, including the services sector," he said.
The actual investment by Japanese companies in Myanmar is still low. Their concerns are mainly the poor infrastructure and regulations. Despite the implementation of the new foreign investment law next month, some issues are not specified, prompting discussions with ministries.
"The answers are almost different each time. So, we really cannot make a decision," he said.
For consultation, frequent visits to the capital are required, he said.
