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Tuesday, December 18, 2012

How will the Dawei project benefit Myanmar?

By Stuart Deed   |   Monday, 05 November 2012 

Keven Costner is a polarising actor – in between some sterling performances in Dances With Wolves and A Perfect World, he found time to act in some of the worst movies of the recent past, bottoming out with widely derided Waterworld, a film so dreadful that even Dennis Hopper as a mad pirate could not save it.
And at this point in time you might legitimately be wondering if The Myanmar Times has been taken over by crackheads: An opinion article in the business section about that dashing rogue Kevin Costner – what’s that possibly got to do with Myanmar?
The point lies in another Costner effort that deals with his apparent desire to portray himself as a serious but down-on-his-luck sportsman – and no, I’m not talking about the preposterously awful Tin Cup, but the moderately watchable Field of Dreams, released in 1989.
Now, I’m not going to lie and say I remember the movie well but I do recall the line delivered by Costner’s ghostly co-star: “If you build it, he will come.”
At this point Costner’s character digs up part of his cornfield in a bid to encourage the ghost of Shoeless Joe Jackson, a long-dead player idolised by Costner’s father, to play baseball at the field.
And here’s where I belatedly – and very crudely – arrive at my point: I think the mooted US$50-billion Dawei Special Economic Zone and deepsea port in Tanintharyi Region is Myanmar’s field of dreams, with Thailand and possibly Japan acting as the ghostly voice.
Frankly, I don’t see the benefit that Myanmar gets from Dawei but it seems clear from former Thai prime minister Mr Abhisit Vejjajiva’s comments during a weekly television address in late 2010 that Thailand knows what it wants from the project.
“Some industries are not suitable to be located in Thailand. This is why they decided to set up there,” he said, referring to Dawei.
Tycoon U Zaw Zaw told Reuters news agency in early July that his company, Max Myanmar Group of Companies, planned to reduce its share in the 250-square-kilometre project from 25 percent.
“We are pulling out from the project gradually,” he confirmed to Reuters in a phone interview on July 4.
The ambitious Dawei project was announced to the public in late 2010 but has hit a number of roadblocks since then, including U Zaw Zaw’s planned pullout, the axing of a planned 4000-megawatt coal-fired power plant on environmental grounds and perhaps the greatest threat of all – the failure of developer Italian-Thai to secure funding.
Somjet Thinaphong, the managing director of the Dawei Development Co. Ltd, said a gradual withdrawal by the Myanmar strategic partner is unlikely to affect the project’s long-term viability, according to an article in the Bangkok Post in early July.
“The viability of such a capital-intensive development project is largely dependent on fund sourcing,” he said. “The local company, or even Ital-Thai, does not have the financial capacity to fund such a massive development project. We have to bank on others to provide us with financial support.”

However, Japan and Thailand have since intervened to keep the project afloat.
“Italian-Thai has had difficulty in mobilising the funding. So now the Thai government has effectively taken over the project,” U Thaung Lwin, chairman of the Dawei SEZ told Reuters in mid-September. “The next step is to invite Japan”, which he said is committed to seeing the project succeed.
Since the Thai and Myanmar governments agreed on July 23 to connect Dawei to the Thai port of Laem Chabang, 100 kilometres southeast of Bangkok, Thai banks led by Bangkok Bank and Siam Commercial Bank have arranged a 10 billion baht ($325 million) bridge loan to sustain it for another 8-10 months, Mr Somjet Thinaphong told Reuters.
However, I think the concerns over funding miss what I consider an important point: There seems to be an expectation that if the site is built then workers will arrive in droves to take up jobs.
“We need tons of workers,” Premchai Karnasuta, the president of Italian-Thai Development, told the New York Times in November 2010. “We will mobilise millions of Burmese.”
But unless wages and working conditions on offer at the project are competitive, who is going to turn up for work?
There seems to be an unspoken belief that Myanmar workers are going to stream to the development from further north in Myanmar or from other jobs in Thailand, but it just looks like a pipedream to me – and Kevin Costner ain’t around for the happy ending.
There are just so many question marks hanging over the project: Where are the workers going to live? Is road and rail infrastructure linking the zone with the rest of Myanmar going to be built?
Above all – how does this development benefit Myanmar and its 60 million people?
Instead, the special economic zone planned for Thilawa in Yangon’s Thanlyin township seems a much better bet: The workers, basic infrastructure, services and companies are already there, and Japanese businesses and the government are strongly backing the project, which means the funding should not be a problem in the same way that it has been in Dawei.
For its part, the Asian Development Bank has advised the Thai government to invest in transport and infrastructure development in Myanmar to encourage international investors and financiers, the Bangkok Post reported on August 30.
Mr Craig Steffensen, the ADB’s Thailand country director, said during the Thailand Focus 2012 meeting in Bangkok on August 29 that the $8 billion required for the first phase of the project had not been secured.
He added that the Thai government should consider building more roads or rail links to augment the motorway planned between Nonthaburi’s Bang Yai district and Kanchanaburi province.
“It doesn’t need to be a massive investment, just an initial amount that can get the Dawei project off the ground,” he said.

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