Myanmar bets on industrial zones to draw investments, create jobs

Myanmar is betting on its industrial and special economic zones (SEZ) to draw foreign direct investments (FDI) and local economists say this strategy could also help it solve the conflict in the country’s poorest regions.

“If we can implement the Kyaukphyu SEZ project, we can overcome the Rakhine crisis. Also, armed groups like the Arakan Army would not have a chance to exist,” economist U Zaw Oo said. This is because the Kyaukpyu SEZ, which includes a deep-sea port and an accompanying industrial park, is expected to create more than 100,000 jobs each year to local residents and generate billions of dollars in tax revenues that should improve the standard of living in Kyaukphyu and the rest of Rakhine State by bringing roads and electricity.

Residents of Kyaukphyu are dependent on fishing or farming for a living and many migrate to other regions to seek employment. During Chinese President Xi Jinping’s state visit to Myanmar in January last year, the two sides agreed to advance the Kyaukpyu SEZ project, with the construction of the port to commence after the completion of economic and social impact assessments.

Bet on industrial zones

By developing more industrial zones that meet international standards, the government is hoping to lure foreign manufacturers to open up factories in Myanmar. Already, some 135 Korean firms are expected to invest in the US$110 million Korea-Myanmar Industrial Complex (KMIC), according to U Thaung Tun, Minister for Investment and Foreign
Economic Relations.

Construction of KMIC commenced in Hlegu Township, Yangon, on December 24, 2020. Land plots in KMIC’s industrial park are now available for a lease online at rates between US$69 and US$75 for one square meter.

On December 27, 2020, the government also inaugurated the US$274 million Yangon Amata Smart and Eco City industrial park project, which will be jointly constructed by the MyanmarDepartment of Urban and Housing Development (DUHD) and Thailand’s Amata Corporation PCL.

The two new industrial parks will give investors more options to open manufacturing facilities in Myanmar as they will come equipped with basic infrastructures such as roads and power plants and offer incentives such as tax exemptions. Another two Yangon industrial parks, the US$230 million Myanmar Singapore Industrial Park in Hlegu township and China-backed Htantabin park in Hlaing Tharyar township are now also being constructed.

Besides drawing more FDI and creating jobs, the investors are also expected to introduce new technologies and skills to Myanmar. Currently, Myanmar has just one such industrial park – the Thilawa SEZ in Thanlyin Township, Yangon.

Investing in Thilawa

Total FDI in Thilawa SEZ has amounted to more than US$ 2 billion, according to Daw Than Than Thwe, Joint Secretary of Thilawa SEZ Management Committee. Covering some 2500 hectares, Thilawa SEZ started its commercial operations in 2015. The SEZ was established by Myanmar Japan Thilawa Development Limited with investments from Myanmar and Japan businesses, supported by the governments of the two countries.

According to the Thilawa SEZ Management Committee, the project is now providing more than 20,000 jobs with over 100 companies from 27 countries now operating at SEZ. The majority of investors are from Japan followed by Singapore, Thailand, Korea, and Hong Kong.

“Companies from Japan are willing to make more investments at Thilawa as many are now making profits,” said Daw Than Than Thwe. Still, she warned that COVID-19 could have a negative impact on investments. Meanwhile, Phase-4 of the Thilawa SEZ Zone-B project is also facing delays following opposition from residents in the area, according to the Thilawa SEZ Management Committee.

Prescribed compensation has been proposed to the 58 relocated households to make way for the project but four of the families have refused to accept them. The implementation of the project has thus been delayed, said the committee. Work on the project commenced on February 20, 2020, after a memorandum of understanding was signed among the Thilawa SEZ shareholders in November 2015. – Translated

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Source : Myanmar Times

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