The Dawei SEZ in Myanmar, set to be Southeast Asia’s largest industrial zone, is progressing once again despite years of instability and uncertainty. The pandemic also makes it nearly impossible for developers and the government to meet with local residents to answer basic questions about the impacts and benefits of the project.
As COVID-19 cases continue to rise in Myanmar, plans are now moving ahead for what would be Southeast Asia’s largest industrial complex.
The Dawei Special Economic Zone (SEZ), in southeastern Myanmar’s Tanintharyi Region, has seen numerous starts and stops since its inception in 2008. The SEZ project would cost US$8 billion dollars and cover almost 200 square kilometers, making it eight times the size of the Thilawa SEZ near Yangon and over 10 times the size of the planned Kyauk Phyu SEZ, a Chinese-backed Belt and Road Initiative project on the coast of Rakhine State.
Myriad financial and planning troubles, as well as public criticism, have kept the project from moving forward. The land slated for the SEZ, a stretch along the flat beaches of the Andaman Sea, is still largely undeveloped apart from dirt roads and a small number of buildings. At present, the land is used by local residents for farming, raising livestock and harvesting products for key local industries like seafood.
Earlier this year, it appeared that the pandemic would throw off plans for the SEZ once again. But despite a lack of public information on the project, it now appears that the Dawei SEZ is progressing.
The Dawei SEZ management committee reported in late September that 10 companies have submitted proposals to develop inside the SEZ. Eight of the companies are Chinese firms, some of them state-backed enterprises, seeking to use the SEZ as a potential hub for Chinese commerce and connect Beijing to the Indian Ocean. The Dawei SEZ has been primarily driven by Thai and Japanese support—Chinese interest is relatively new.
But local residents in Dawei still face a host of unanswered questions about the project—everything from its scope to how they will be impacted and whether it will bring any benefits to their communities.
Critics have accused the SEZ project and associated infrastructure of driving human rights violations, including forced evictions. Local communities struggle to get accurate information about development in Dawei and are largely opposed to having to relocate unless developers can guarantee them an equivalent or better quality of life.
Project plans show that it would displace between 20,000 and 40,000 people, though plans have changed dramatically over time. A small number have already been relocated from a fishing village on the coast of the SEZ, most of whom then left the area to work in Thailand as migrant workers. Almost none of them moved to the official relocation site they were offered.
Dawei residents have also voiced a need for equitable and fair compensation in cases where locals will lose their property or livelihoods.
With the project stuck in limbo, many residents have struggled as a result—unsure when or how their lives will be changed. If the project is to move ahead, the pandemic makes it nearly impossible to safely hold the public consultations necessary to address questions about the project’s impacts, costs and benefits.
Dawei sees SEZ limp along with little clarity
The government first proposed an SEZ for Dawei in the final years of Myanmar’s last dictatorship, with plans for a deep sea port, petrochemical production, an industrial zone, oil and gas pipelines, a dam, a coal-fired power plant and road and rail lines to Thailand. The project was set to cost up to US$58 billion. The government issued a 75-year concession to Thai construction firm Italian-Thai Development (ITD) to develop the project.
Plans for the SEZ were first thrown into question when popular protests in 2012 led to the cancellation of the coal-fired power plant, slated for construction near the village of Nabule. The communities who would be displaced by the dam, primarily in Kalonehtar village, also spoke out against it. Kalonehtar’s residents refused compensation and relocation offers from the SEZ developers.
At the same time, ITD was unable to secure investors in the increasingly uncertain project. The government suspended the project in 2013.
In 2015, ITD renegotiated a smaller version of the project with the Myanmar government. But ITD has also had its share of public relations problems. In 2018, company president Premchai Karnasuta was caught by Thai authorities in a wildlife sanctuary with the skin of a poached black leopard as well as soup made from the leopard’s tail.
In addition to ITD, the Dawei project has also seen plans and backing from the Japan International Cooperation Agency (JICA) and Thailand’s Neighboring Countries Economic Development Cooperation Agency (NEDA) but has still struggled to secure investments. The lead developer is now officially Myandawei Industrial Estate, a joint venture that includes ITD and another Thai‑Japanese joint venture called Rojana Industrial Park.
“We are growing impatient because locals have already waited for many years. We have already spent years on it. We can’t wait any longer for the development,” Dr. Myint San, vice chair of the Dawei SEZ management committee, told The Irrawaddy.
“The electricity supply and a two-lane highway project are underway. We will need to construct the deep seaport. We are currently looking for investors to invest in the deep seaport,” he added. “It is a mega project. So, one country cannot afford to develop the whole project. It is a strategic project and the location is important geographically. If there is no one, we have to ask other countries like China to invest in it under a government-to-government agreement.”
Despite a lack of details, governments across the region build plans around Dawei
The Dawei SEZ is part of the planned Mekong Southern Economic Corridor, which aims to connect central Vietnam to the Andaman Sea via Cambodia and Thailand’s economic hubs—the idea appears to be known as the Eastern Economic Corridor in Thailand.
The success of the SEZ depends on a proposed US$137 million highway known as the Dawei-Htee Kee road link that would connect it to Thailand’s Kanchanaburi province. Construction on the road is backed by a loan from Thailand’s NEDA but the planned route also crosses through territory controlled by the Karen National Union (KNU), once of Myanmar’s most prominent ethnic armed groups.
According to reporting by The Irrawaddy, the Dawei SEZ management committee has now discussed proposals for a major oil refinery project with a number of Chinese firms. Two of them—China HuanQiu Contracting & Engineering Company (HQCEC) and China Petroleum Pipeline Engineering Company (CPP)—are closely affiliated with a Chinese state-owned company that developed the controversial Shwe oil and gas pipelines connecting Rakhine State’s Kyauk Phyu to southwestern China.
While Japanese backers remain interested in the project, the latest developments show that Chinese firms are already prepared to step in and fund aspects of the SEZ.
“Despite several rounds of meeting with Japanese stakeholders, they show no signs of interest in the project,” Dr. Myint San said. “In the eyes of the Japanese investors, the Dawei project has to wait for a long time for commercial viability. It is also weak in infrastructure. These would be major reasons that they are not willing to invest in it.”
The stumbling progress of the Dawei SEZ shows the consequences of top-down development that doesn’t have support among local communities. Though the project may have new investors in spite of the pandemic, it still risks sparking conflict. Any benefits will likely be unsustainable—socially and environmentally—as long as the project remains opaque and nebulous.