Thilawa SEZ Commences Second Phase of Project

By Moe Myint 24 February 2017

RANGOON — Rangoon’s Thilawa Special Economic Zone (SEZ) management committee members said they expect to complete the 250-acre second phase of the project in mid-2018, during a commencement ceremony at the SEZ’s new Zone B on Friday morning.

Thilawa SEZ is located between Kyauktan and Thanlyin townships, 14 miles from downtown Rangoon. The project is a joint venture between Burma and Japan; construction work on it began in late 2013 under ex-president U Thein Sein’s administration.

Both governments hold a 10 percent share and nine domestic firms integrated into Myanmar Thilawa SEZ Holdings (MTSH) control 41 percent, and a Japanese private-sector consortium owns 39 percent.

Union Minister U Than Myint of the Ministry of Commerce said, “Our country is trying to develop Thilawa, Kyaukphyu and Dawei SEZ projects. Among them, Thilawa SEZ project is one of the most successful zones.”

The committee designated two phases for the implementation of the Thilawa SEZ and gave an incentive to foreign investors of seven years free from tax for those who would export products abroad. A tax break of five years was given to those who would export products domestically.

In 2014, 78 firms from 15 countries came to Burma to set up factories in Thilawa. Currently 24 factories, including domestically run ones, are operating there and some foreign companies regularly export products abroad. Total investment in the Thilawa SEZ has already reached more than US$1 billion, said chairman U Set Aung of Thilawa SEZ’s management committee.

Factories producing garments, construction sector-related materials, electronic products, steel materials and cement, motor vehicle parts, pharmaceuticals and medical equipment are located in the SEZ’s Zone A. The investors are from Japan, Singapore, China, South Korea, Thailand, Taiwan, Sweden and the US.

U Set Aung said that within 18 months, the construction of factories had been 96 percent completed, and that the government had provided 85 percent of the jobs for Thilawa residents in Zone A, but he did not elaborate a total number of laborers. He estimated that Zone B implementation could take at least 18 months as well.

“Many international investors already contacted us about making investments here. But the investors could build factories after Zone B’s construction is complete,” said U Set Aung, who said he believes that Zone B could offer more than 400,000 jobs to locals.

For the second phase of Zone B, the authorities relocated three villages, including Shwe Pyauk, Aye Mya Thida and Shwe Pyi Thayar, said U Than Lwin, who attended Zone B’s opening ceremony on Friday.

The government and investors compensated villagers with a total of 27 million kyats for housing and land and 25 million kyats for farmland. But the rates varied, due to the SEZ committee’s rules and regulations for compensation schemes. Some residents opted for new homes rather than cash.

As the farmers gave up their land to investors, some were left without farmland on which to cultivate vegetables and headed to neighboring townships in search of new jobs.

Daw Tu, who is a longtime squatter in Shwe Pyauk village, told The Irrawaddy that investors built a new house for her family in the SEZ zone. Her elder daughter currently works at a wool factory and earns 150,000 kyats ($110) per month.

“I am really happy with the arrangement, although our family is still in an inconvenient situation,” Daw Tu said.

The Irrawaddy met with villagers at the ceremony and learned that many are currently unemployed.

One man, U Than Lwin, said, “I hope to get a job here.”

U Set Aung highlighted in his opening speech how delivering training to the local community to build their capacity and then provide them with jobs in the SEZ was a “high-priority.”
“I don’t really want to be in a situation where we have the SEZs around the corner, but the local community members are without jobs,” said U Set Aung.