The junta is inching a step further to reviving with Russian money a quixotic mega-project in Tanintharyi in Myanmar’s deep south that has been stop-starting for nearly two decades.
On Tuesday, deputy junta chief Soe Win called for winding up the Dawei Special Economic Zone Development Company Ltd—a so-called “special purpose vehicle” invested by Thailand and Japan to oversee the project—and throwing it open to investment from Russia and Belarus instead.
Addressing a meeting of the Central Committee on Myanmar Special Economic Zones on Tuesday, Soe Win claimed the Dawei SEZ will develop “by leaps and bounds” now his boss Min Aung Hlaing has “created opportunities” for the SEZ during his visit to Russia and Belarus.
He called for steps to dissolve the SPV “in line with procedures and in consultation with legal experts.”
The project, which was to encompass a deep sea port, airport, and various industries, has been plagued by multiple delays, funding bottlenecks, and accusations of human rights violations.
Russia’s minister for economic development, Maxim Reshetnikov, last month signed a memorandum on investment cooperation to kickstart the project. The MoU now also includes a coal-fired power plant and oil refinery.
The SEZ was discussed again when Min Aung Hlaing visited Russia this month.
Energy Minister Ko Ko Lwin, who came along, also held talks with his Russian counterparts on an LNG terminal near the deep-sea port for both domestic use and export, pipelines, and the oil refinery.
He sought to persuade them that this would mean lower prices for Russian fuel imports, and in return sought Russian technical assistance in oil and gas exploration.
Russian Prime Minister Mikhail Mishustin said Russian companies are “ready” to invest in the Dawei SEZ.
At Tuesday’s meeting, Soe Win stressed the need to consider SEZ projects in the country not only from an economic point of view but also from the political and geopolitical angle.
But the parallel National Unity Government’s foreign minister, Daw Zin Mar Aung, warned that any investment agreement made with the current illegitimate regime will be considered invalid.
“There is no guarantee for any agreements made between the Russian government and the regime,” she said. “It’s no use making agreements with the regime if [investors] want to make investments that are secure for the long term. They should engage only after a democratically elected government emerges in the post-junta era.”
Eleven civil society organizations based in Tanintharyi Region in a joint statement on Monday also expressed their opposition to potential Russian investment in Dawei.
“The project, if implemented during a time of political instability and economic crisis, will only worsen evictions and human rights violations and affect the environment and livelihoods of locals,” they said.
Located on the Andaman coast, the stalled project aims to turn a 196 sq. km zone in Yebyu Township into Southeast Asia’s largest industrial and trade zone. It originally envisaged a deep-sea port, oil refinery, a steel mill, fertilizer and petrochemical plants, industrial factories and operations, a reservoir, and a superhighway connecting it to Thailand’s Kanchanaburi.
It was launched in 2008 with a memorandum of understanding between Thailand and Myanmar whereby the previous junta granted Italian-Thai Development a 75-year concession to construct it and attract investment.
Japan came on board when the situation in Myanmar thawed in 2015.
But after endless further delays and accusations of serious human rights violations in appropriating the land, the Dawei SEZ Management Committee cancelled the contract with Italian-Thai Development in January 2021, just a month before the coup.
More recently, there have been frequent clashes between the regime and resistance forces near the site.
With that, the project would seem to be dead in the water. But the struggling regime is desperate for Russian cooperation in the investment and trade sectors, economist U Sein Htay said.
“China’s support alone is not enough,” he said. “The regime also relies on Russia both politically and economically.”
