Chinese giant works to win the people

Though the Kyaukphyu area is set for large-scale investments, it is in Rakhine State, which is also home to some of the country’s poorest communities.

Kyaukphyu hopes to become a hub for the oil and gas industry and is to be home to one of Myanmar’s three Special Economic Zones – yet local residents risk being left behind in the rush to develop.

Chinese companies in particular have shown interest in investing the region, with a number of companies entering bids to build parts of the SEZ. No winner has yet emerged, as negotiations, which were set to wrap up in December, have been repeatedly delayed.

Yet Chinese investment has proven controversial. Some Chinese companies have provoked popular backlashes, including the firms behind the Myitsone dam and the Letpadaung copper mine. Others, though, are looking to change their approaches from deals resting on government to agreements with broad popular support – which often includes a Corporate Social Responsibility (CSR) component.

CITIC claims to be the largest Chinese conglomerate. Japanese investors and Thailand’s CP Group owning a significant portion of the firm. CITIC is trying its hand at local CSR as it also looks at local business activities, such as bidding for some of the Kyaukphyu SEZ work.

CITIC Construction vice president Frank Ma Chuanfu said his firm realises it needs to communicate on the ground level to overcome some negative perceptions of China people. In the past, some government-to-government business has run into trouble, and it will take time to overcome these perceptions.

The company is importing a CSR project it has run in Thailand for 15 years. The program gives a US$1.5 million grant to the Ministry of Livestock, Fisheries and Rural Development to fund projects in 50 selected villages across the country. Most states or regions will end up with three such selected villages.
“Kyaukphyu is in one of the least developed areas, and we are concerned for the CSR project there,” said Frank Ma Chaunfu.

Each of the 50 selected villages will receive K30 million (US$27,000) to serve as an agricultural development fund, managed by a committee made up of elected villagers.
The program aims to function as a targeted microfinance program. Poramete Aridete, director of National Village Fund Thailand, said at first individual loans will be no more than K200,000, for periods of not more than one year. The program’s representatives will also purchase the agricultural implements on behalf of the committees, rather than the committees purchasing them directly.

The loans are set at a rate of 0.5 percent per month, for a maximum of 6pc per year, well below the usual microfinance limit of 30pc a year.

Visiting Ma-u-pyein village, one of the first Myanmar villages in the program, requires a three-hour boat ride and a half-hour hike over a mountain range from Kyaukphyu. It is a remote area, and the poverty and need for capital is evident.

Local villagers said the rates on offer with CITIC’s program are attractive, but they are still unsure about the program.
“We’re unhappy with our alternative rates, as we have to give between 15 to 20pc minimum a month for informal lending,” said U Ba Shwe, a village fund committee member from Gantgar North village in Kyaukphyu tonwship.

“But we still have questions for the training team, as these kind of programs are new for us.”
U Ba Shwe said the limit on the first loans of K200,000 is too small for those looking to start a business from the proceeds, but in the future it may become more money.

Others say that while the program is helpful on the whole, they are worried about the possibility of corruption with these activities.
Ma Su, 30, said the K200,000 limit per person had not been strictly adhered to, with some connected villagers ending up with K2 million and others only K50,000.
“That’s only enough money to buy one piglet,” he said. “How can we make a bigger profit?”
Although business has arrived, locals said they have not connected the two.

Another labourer working at a nearby jetty, Daw Aung Thein Hla, 38, says she does know about the plans for Kyaukphyu SEZ, despite living in Kyaukphyu town.

“I have no idea what I’ll be doing if those projects arrive,” she said, after reporters explained the purpose of the SEZ.

Source: Myanmar Times,

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