China Wants Action on SEZ in Arakan as Locals Cast Wary Eye

By Nyein Nyein 25 June 2013

In a visit to Naypyidaw on Monday, a senior Chinese diplomat said Beijing wanted to see “sooner implementation” of the Kyaukphyu Special Economic Zone (SEZ) in western Burma’s Arakan State, as some local residents cast a wary eye on the Asian giant’s economic ambitions.

Chinese State Councilor Yang Jiechi, the head of the Chinese delegation, said he hoped to see development of the Kyaukphyu project soon, and that “China wants to take part in the tasks of ensuring development of the southwestern part of Myanmar,” during a meeting with President Thein Sein, according to the state-run New Light of Myanmar newspaper.

Chinese projects in Arakan State include controversial natural gas and oil pipelines from Kyaukphyu to China’s Yunnan province. Construction of the dual pipelines, known as the Shwe gas project, is complete, and the piping of gas and oil northward is scheduled to begin soon. Oil storage tanks on Maday Island and natural gas storage tanks on Mala Island have also been installed.

Thein Sein on Monday said he “thanks China for the Kyaukphyu industrial zone project” and expressed hope that the “region could see development” as a result, but there were no details provided on the nature of the agreement nor what kind of support the Chinese would provide.

Local residents said there were no indications that development of the SEZ in Kyaukphyu had yet begun, nor had the local population been briefed about plans for the project.

In December, Deputy Labor Minister Myint Thein—the chairman of the SEZ Implementation Committee—paid a weeklong visit to Kyaukphyu and told residents at a meeting there that the project would be implemented in accordance with the desires of the local people.

“Kyaukphyu is a center of Chinese interest, so they will want to begin it sooner and quicker,” said Aye Zan, secretary of the Kyaukphyu SEZ Monitoring Committee, which was formed earlier this year after local residents called for collaboration on the project in terms of social and environmental impact assessments.

“But the authorities have not shared any plan with us,” he added.

The government has invited foreign firms to invest in the SEZ project, but there remains a lack of basic infrastructure, such as roads, electricity provision and port facilities, in the area.

“No development at the project area is seen, we only know that the ‘master plan’ for the project has been drawn up in collaboration with a Japanese company,” said Hla Myo Kyaw, a resident of Kyaukphyu and a member of the Kyaukphyu SEZ Monitoring Committee.

The residents said basic information about the SEZ—the project site, the size of the zone and whether local residents would need to be relocated—had not yet been provided to them.

A delegation of the Arakan State-based Rakhine Nationalities Development Party was among a group of Burmese political parties that visited China in April at the invitation of the External Communication Department of the Chinese Communist Party. It was not clear whether Beijing’s ambitions in Kyaukphyu were discussed.

Some locals are wary of Chinese-backed projects in Arakan State, with the Shwe gas project criticized by many for a lack of transparency and its negative environmental and social impacts, including forced displacements and harm to local fishermen’s livelihoods.

The monitoring committee said it would stand with local residents and air any concerns raised.

“If the villagers have to move for the project, it cannot happen,” Hla Myo Kyaw said, “as no one will accept relocation from their homes.”

In December 2012, the rights group Arakan Oil Watch reported that the Chinese state-owned conglomerate CITIC Group would manage the implementation of the Kyaukphyu SEZ on Ramree Island, where more than 200,000 people reside.

The report said the zone would require an initial investment of US$8.3 billion and a total of $89.2 billion over 35 years, using 120-square-km of land and 70-square-km of waterways, according to a feasibility study by CITIC Construction.

An 800-km long rail way connecting Kyaukphyu to Ruili in China’s Yunnan province will also reportedly soon be built, with its planned completion in 2015. The railway will pass through cities and villages in Arakan State, Magway and Mandalay divisions, and Shan State, as the Shwe gas and oil pipelines currently do.