Japan to Carry out Studies on How to Revive Dawei SEZ

By Nobel Zaw 20 October 2014

RANGOON — Japan is to carry out several studies on how the Dawei Special Economic Zone (SEZ) in southern Burma can be revived, after the massive Thai-Burmese project stalled last year, government sources said on Monday.

State-run media reported that Labor, Employment and Social Security Minister Aye Myint visited Japan on Oct. 14 and met with Vice-Minister for International Affairs at the Ministry of Economy, Trade and Industry Norihiko Ishiguro. Ishiguro reportedly said that Tokyo would spend US$700,000 on three studies into the Dawei SEZ’s planning.

The research is expected to start at the end of this month and conclude in March next year, government mouthpiece The Global New Light of Myanmar said, adding that Japan would also draw up a master plan for the Dawei zone, which is being planned in Tenasserim Division.

Deputy Minister of Transportation Han Sein, who has been involved in the Dawei SEZ, told The Irrawaddy, “They [Japan] will do the project with the funding from Japan’s Ministry of Economy, Trade and Industry and the Economic Research Institute for Asean and East Asia.”

The latter Manila-based institute carries out policy research for the Association of Southeast Asian Nations (Asean) and the East Asia Summit.

Han Sein said one of the studies would research how the Dawei SEZ could become an infrastructure and industrial hub that would boost trade between South India and the Mekong region due to its strategic location on the Bay of Bengal and the Southeast Asian mainland.

A second study, according to state media, would research how Burma, Thailand and Japan could cooperate and provide technical assistance for the project, while a third study would research how private financing can be secured for the development of the zone.

Last week, Thai Prime Minister and junta leader Prayuth Chan-ocha met with President Thein Sein in Burma, and they agreed that their countries would try to resume the Dawei SEZ.

In remarks carried by the Thai media over the weekend, Prayuth said Thailand would need to find a strategy to attract private sector financing for the project and announced that an investment concession for the first, 6,000-acre phase would be announced in November. He reportedly also invited India to become involved in the SEZ development.

The SEZ in Tenasserim Division’s Dawei District would be a massive billion-dollar project that includes a deep-sea port, heavy industries and extensive transport links.

Thailand’s largest construction firm, Italian-Thai Development (ITD), was given leadership of the project in 2010. It failed, however, to attract private investment to finance the project or to secure an agreement to build a power plant for the complex. ITD was taken off the project in late 2013 after reportedly having spent US$189 million on implementing the first project phase.

Burma and Thailand have called on Japan to step in with funding and technical support to help revive the project. Tokyo has promised to offer support and a Japanese firm has promised to study the construction of coal-fired plant at Dawei.

Japan has been keen to develop economic ties with Burma after the country opened up and has moved fast to develop the Thilawa SEZ, a Japanese-supported manufacturing zone near Rangoon. It remains to be seen, however, if Japan is willing to be a driving force for the much larger Dawei project.

The latter zone is also running into stiff resistance from local communities and civil society groups, who have warned that tens of thousands of farmers would be forced to relocate for the project, which is also expected to have a heavy environmental impact on the pristine coastline of southern Burma.