Small industrial zones lack government support

Investment should be directed toward upgrading the country’s ageing industrial zones, as the government contemplates launching new ones, say Yangon industrialists.

As the Yangon Region government and Myanmar Investment Commission (MIC) mull the regeneration of the country’s industrial base, the owners of existing factories say more can be done to make them competitive.

U Ko Gyi, chair of North Dagon industrial zone, said, “Officials want to develop new industrial zones to strengthen the export sector, but they are not helping the old zones to be more productive. We need upgrades, but cannot afford to do it ourselves. If there is going to be new funding or equipment, it should come to [the existing zones] first.”

He said most of the old industrial zones, including in North and South Dagon, were home to small enterprises occupying 2400-square-foot lots.

Almost 20 years old, they suffer from decaying infrastructure, poor roads, and insufficient water and electricity supplies, he said. Waste collection is inadequate, and operators complain of high tolls on access roads and bridges.

U Ko Lay, spokesperson for South Dagon industrial zone agreed, saying, “Yangon Region government wants to support the industrial sector, but only seems to have in mind the big zones that already have a lot of investment.”

Last week, the MIC agreed to develop new industrial zones and to expand the industrial sector to boost exports. Secretary U Aung Naing Oo told media that the commission would prioritise the creation of job opportunities in factories.

“The MIC will soon inaugurate new industrial zones, with more job opportunities, and will also train workers in industrial skills,” he said, adding that the new zones would be provided with the necessary infrastructure.

“This will require greater productivity, so we will set up many new small industrial zones around the country. We will work with state and regional governments to invite companies to invest in them,” he said.

“The most important requirement is skilled labour. The development of the industrial sector depends on the provision of training. That will both attract investors and provide local residents with higher wages.”

Yangon Chief Minister U Phyo Min Thein has said he wants to upgrade all the industrial zones in Yangon, using the city’s largest zone, Hlaing Tharyar, as a pilot project.

“Hlaing Tharyar has much more investment than North and South Dagon industrial zones. We’re worried about the level of support for the smaller zones,” said U Ko Lay.

South Dagon is divided into three zones of about 750 acres (300 hectares) each. Factories there are labour-intensive and lack infrastructure and a reliable power supply, he said.

U Min Thu Myint, a factory owner in Shwe Pyi Thar industrial zone, said, “Although our zone is more than 1300 acres [520ha], only half of it is occupied because the land is so expensive. I would like to see new zones developed, but the government should support the existing ones with new infrastructure and investment.”

For U Myint Zaw, general manager of Myanmar Japan Thilawa Development, which runs the country’s only special economic zone, foreign investment requires good infrastructure.

“To sustain economic growth and to cut the trade deficit, we need to invest in export-oriented industries and import-substitution companies. But we can’t attract that kind of investment without guaranteeing a reliable electricity supply,” he said.

“In Thilawa SEZ, we are inviting that kind of investment for the future of our country, but even here, we cannot match neighbouring countries when it comes to providing electricity.”

There are 19 industrial zones in the country, with a further six under development. Two more SEZs are at the planning stages in Dawei, Tanintharyi Region, and Rakhine State’s Kyaukphyu.

 

Source: Myanmar Times

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