Minister Rejects Fears of Debt Trap Over Chinese-Backed Port
By Myo Pa Pa San 9 July 2018
YANGON — Commerce Minister U Thant Myint said Myanmar would not be overwhelmed by the financing of a deep-water port being built in Rakhine State’s Kyaukphyu Township, hoping to assuage public fears of a Chinese debt trap.
“We won’t be burdened with debt like many think because we will implement the project step by step with available investment from local businessmen and in cooperation with China. We invite feedback [on the project] from experts,” the minister said in Yangon on Friday at a regular meeting between Vice President U Myint Swe and private businessmen.
“I think there is such speculation because some have concerns about the lack of information about the project. And some, I think, deliberately speculate to attack us,” he added.
Some local media have raised concerns about the port following an Asia Times article by Bertil Lintner last week which argued that Myanmar risked falling into a debt trap with China over the project.
“Anyway, we pay heed to their analysis. Both we and the Chinese government think the project may create mutual benefits, and we will gain benefits, not disadvantages as others think,” U Thant Myint said.
Plans to build the $10-billion deep-water port and special economic zone were first announced in 2007 while the country was under military rule.
The current government, led by the National League for Democracy, is not reviewing the project but has been holding negotiations with China’s CITIC Group, which won the tender, said U Thant Myint.
“Negotiations are going well and it is likely that we’ll reach an agreement soon. We are considering the need for huge investment and competent management,” the minister said.
The two sides have agreed to implement the project in phases, he added.
U Thant Myint said the port will spur economic development and create jobs in Rakhine while also helping to develop China’s landlocked Yunnan Province,
CITIC Group will own a controlling 70 percent stake in the project and Myanmar the rest as part of the 75-year deal they struck.
Sean Turnell, an economic adviser to the Myanmar government, reportedly said recently that the $7.5-billion price tag on the project’s port component was “crazy” and “absurd.”
The government of former President U Thein Sein let a memorandum of understanding on the Chinese-backed Myitsone hydropower dam expire in 2014, nearly three years after he suspended the $3.9-billion project over concerns of a potential debt trap.
But Myanmar has to repay the Chinese state-owned developer the $800 million it had already spent on the project. Some say Beijing could leverage the debt in negotiations with Naypyitaw to get its way with the Kyaukphyu port.
Translated from Burmese by Thet Ko Ko.