'The Govt Must Handle It Decisively': Myanmar MP on Controversial China-Backed Development in Karen State

By Nan Lwin 15 July 2020

YANGON—In recent months, the Myanmar government formed a tribunal to investigate irregularities in a controversial China-backed city development project near the Thai border in Karen State. The project area is under the control of the Karen State Border Guard Force, a Myanmar military-backed armed group led by Colonel Chit Thu and formerly known as the Democratic Karen Buddhist Army (DKBA). Dubbed the Shwe Kokko New City, the project is a collaboration between a Hong Kong-based company, Yatai International Holding Group (IHG), and Col. Chit Thu. However, the project has sparked concerns due to the reportedly shady backgrounds—including links to criminal networks and illicit activities—of the Chinese enterprises involved.

In 2018, the Myanmar Investment Commission (MIC) approved US$22.5 million (about 31 billion kyats) in investment for the Shwe Kokko urban development project, including for the construction of 59 villas, within three years on 10.3 hectares of land in Myawaddy Township. Last year, the project was temporarily suspended for breaching investment regulations following on-site investigations by Karen State authorities.

Yatai International Holding Group revealed on its website that the entire development would cover nearly 30,000 acres, cost $15 billion and involve luxury housing, condominiums, hotels, shopping centers, golf courses, casinos, gambling venues and entertainment, tourism, cultural and agricultural sites. A promotional video from Yatai International advertised the project as the “only area in Shwe Kokko that is authorized to operate casinos.” Its business plan identifies casinos as the top source of revenue.

A report by the Karen Peace Support Network (KPSN) in March said several casinos had begun operating in the newly constructed area since mid-2019, including online gambling casinos. However, the company has denied any activities relating to the casinos.

Meanwhile, the project has sparked criticism due to a lack of transparency, land confiscations, confusion over the scale of construction and the growing influx of Chinese as well as suspected illicit activity and locals’ concerns about the social impacts of casino businesses.

U Sein Bo, a Lower House lawmaker from Myawaddy constituency, directed a question to the Myanmar Investment Commission (MIC) during a session of Parliament on Wednesday, asking for more detailed information on the current progress of the Shwe Kokko project. The Irrawaddy spoke with U Sein Bo about local concerns, his opinion on the project and why it appears so hard for the government to handle on the ground.

The Irrawaddy: There have been many allegations surrounding Shwe Kokko New City in Myawaddy since last year. Why did you raise a question about it today in Parliament?

U Sein Bo: As you know, locals were concerned about land confiscations in 2018. Now they are raising concerns about the social impacts of the casino, including human trafficking.

Even though I am a lawmaker for that constituency, I haven’t heard anything about the project. It means there is no transparency over it. As people have growing concerns about the project, I searched for information about it from newspapers and news departments. Later, I found out that [approval] was granted by the MIC. That’s why I directly raised my question with the MIC, asking it to give us detailed information about the projects, especially on the company’s background, shareholders, the investment amount and the scale of the project, so that I can explain and convey all the information to the local people in Myawaddy soon.

It has been alleged that casinos are already running inside the compound. But the company denies all such allegations. Have you received any information from the ground?

The locals are complaining about the casinos all the time. But, it is under the control of the Border Guard Force. For me… it is difficult to check with my own eyes. But I hear about it all the time from locals. Recently, the investigation body was formed, led by the deputy minister from the Union Government Office. However, the site investigation has been delayed by COVID-19. But I think it is still hard to handle for the government on the ground.

What are local people’s opinions about the project?

Locals do not really support the project. Most of them want the project to be suspended permanently if it involves casino businesses. We already have a lot of tension between locals and Chinese in Myawaddy. There were a series of protests by the locals last year demanding a crackdown on the influx of illegal Chinese immigrants into Myawaddy. The locals are disgusted that Chinese-language signboards are proliferating in the town.

I also reported to the Immigration Department and General Administration Department, asking them to handle that problem strictly. They tried do so but there are still weaknesses. There are a lot of unseen obstacles on the ground to be in accordance with the law.

You said ‘there are unseen obstacles on the ground to be in accordance with the law.’ What do you mean?

We enacted a gambling law. But the law does not allow you to do whatever you want. But you know who is running these businesses, who is involved in it? They are ethnic armed organizations.

There are frequent shootings even in downtown Myawaddy. How could we say there is rule of law? So it is very hard to handle the issue. Those armed organizations signed ceasefire agreements but that does not grant eternal peace. Negotiations [for a political settlement] are ongoing. Before the agreement is settled completely, we have to bear these kinds of issues—even if we don’t like it.

We heard about the casinos, crimes and other things. But that area is not accessible for us. That is the main problem. It is like we are under two administrations [in Myawaddy]. The project is totally under the armed group. All security checkpoints in Myawaddy are controlled by the armed group. The question is who controls that armed group? It is not easy to solve all the problems smoothly according to the law.

What are your suggestions to the government for solving the controversies surrounding the project?

I am very much concerned that things will turn lawless in that area. The armed groups and Chinese with criminal backgrounds are involved in it. They moved to Myawaddy because the Cambodian government cracked down on similar projects [in that country]. I also am very concerned about my own safety when I raise these kinds of issues.

I personally told [a related] minister to “use a needle while there’s time, or you might need an axe later.” It means the government needs to handle it decisively before the case becomes too complicated. If they wait until the problems become massive, they will be very difficult to solve. I think it is time the authorities show their full commitment to handle it now.

The government formed a tribunal to investigate irregularities in the project. What do you want to say about that?

I want them to deal with it effectively and decisively whenever they find irregularities. I want it to be clear that they [developers] can do nothing illegal there. We aren’t against any activities that are carried out according to the law. It is important that the government not allow them to work far beyond the approved scale of the project. The locals are already concerned about that. But they have to embrace it even if they do not like it. We believe the government needs to assure people they will handle the issue according to the law, before things out there get serious.

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