Myanmar Establishes New Special Economic Zone
Plans are currently underway to develop a new special economic zone (SEZ) in Myeik. Located in Myanmar’s southeastern Tanintharyi region, Myeik is home to one of Myanmar’s growing number of industrial zones. According to the Ministry of Electric Power and Industry, a proposal for the new economic zone has been submitted to the regional government for review.
Like many countries in Southeast Asia, Myanmar has been making efforts to transform its agro-based economy into an industrialized one, with the objective of becoming a modern and industrialized nation. Though decades of military rule and isolation have led to underdevelopment and the creation of economic sanctions, reforms in recent years are opening Myanmar to increasing amounts of trade and business with other countries around the globe.
One of the ways Myanmar is facilitating greater trade and foreign direct investment is through the creation of SEZs. These SEZs offer incentives such as tax exemptions and holidays, and lengthy 30-year land leases. The three SEZs currently under development in Myanmar are in Dawei, Thilawa and Kyaukpyu. A plan exists for a zone in Sittwe, but is currently on hiatus.
Myeik Special Economic Zone
The new economic zone in Myeik will be privately owned and will include a harbor and adjoining industrial zone, in addition to zones that will “streamline” the flow of goods between the harbor and adjacent warehouses and businesses.
“The implementation of the project is being led by young people and that’s why the regional-government is supporting it,” said Tanintharyi Regional Minister for Power and Industry, Dr. Win Aung.
“We would’ve needed to apply to the Union Government if this project was larger, but it is on the scale of a small-medium enterprise,” he added.
The Myeik Future Development Public Company (MFDPC), recently created this past March, has expressed its intent to start implementing the project within the calendar year; however, they have requested revisions to the existing plan before beginning.
The project, located east of Myeik Airport, will take up 1,000 acres. This requires negotiations to be held with local residents regarding compensation for the land necessary for development.
“Previously 1,500 residential plots were allocated, but there were no market or public spaces included, except for one school. We asked that the plan be re-drawn as it had many issues,” said U. Aung Myo Lat, the managing director of the MFDPC.
He said that although the company has received K100 billion (US$102 million) for the project and has welcomed investment from other businesses, it will still take many years to complete.
FDI in Myanmar rose from the US$1.9 billion in 2011-2012, to US$2.7 billion in 2012-2013, with energy, garment, information technology and food and beverages sectors receiving most of that investment. In 2012, the Burmese government passed a new law that allows overseas firms to completely own business ventures. By providing investors with a friendly business environment, Myanmar hopes to attract even greater amounts of foreign direct investment.
It seems Myanmar’s political and economic reforms are working too. Since 2011, the country has experienced GDP growth of nearly six percent or more annually. Its GDP last year was reported at US$53 billion, up from US$45 billion just two years prior in 2011. Exports have risen since then as well, climbing from US$7.7 billion in 2011 to US$9 billion in 2013. Imports have also spiked, up from US$7.5 billion in 2011 to just over US$10 billion last year.
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