The Dawei Special Economic Zone Project (the Dawei SEZ project) is a large-scale development project announced by the Thai and Myanmar governments in 2008. The memorandum of understanding (MOU) was signed to set the two governments’ cooperation to connect their countries’ infrastructures and economies. The Dawei SEZ project will be linked to Thailand’s Laem Chabang Port. The project is expected to generate great benefits to both countries, specifically Thailand’s Eastern Sea Board project. Dawei would later become Southeast Asia’s important economic and industrial hub, especially as the main port for the Southern Economic Corridor. The main developer is Thailand’s company, Italian-Thai Development PLC (ITD), the concessionaire. ITD was granted a 75-year concession for the 250-sq.km land in Dawei (nearly 10 times larger than Thailand’s largest industrial estate, Map Ta Phut) and the 138-km road construction project to link Dawei SEZ to Laem Chabang Port via Thailand’s Phu Nam Ron border pass in Kanchanaburi. The investment was estimated to be more than 300 billion baht.

After three years since ITD first started implementing the project, between 2010 and 2013, the Dawei SEZ project was reduced to 196.5 square kilometers. The project key players also changed. ITD could not seek enough fund to continue the project and its local joint venture, Max Myanmar, withdrew its shares from the Dawei Development Company Limited (DDC). Consequently, both the Myanmar and Thai governments stepped in. Myanmar’s Foreign Economic Relation Department under the Ministry of Planning and Finance and Thailand’s Neighboring Countries Economic Development Cooperation Agency (NEDA) under the Ministry of Finance became the advisory and coordinating agency for the Dawei Special Economic Zone Management Committee (DSEZMC). The project transformed from a project ran by private businesses to a bilateral cooperation between two nations. Myanmar and Thai governments jointly established Dawei SEZ Development Company Limited as the Special Purpose Vehicle (SPV). Later, on 14 December 2015, the Japanese government led by the Japan Bank for International Cooperation (JBIC) became co-share in the SPV. The SPV takes on the management and coordinating role to seek investors for the seven sub-SPVs—namely: deep sea port, an industrial estate, energy, water supply, telecommunications, residential area, road and railway links to the Myanmar-Thailand border. The SPV was established during the second Joint High Level Committee (JHC) meeting on 17 June 2012.

Nonetheless, even though ITD’s concession right for the Dawei SEZ project was cancelled, the company still has the right to develop the initial phase under a new company, Myandawei Industrial Estate Company Limited (MIE), which it jointly invested with Rojana Industrial Park PLC. The initial phase began in the end of 2015 to develop an area of 27 square kilometers and an additional 8 square kilometers for the industrial estate. The section was divided into 3 parts: (1) an industrial estate with a 400-MW LNG terminal built to generate electricity for the entire project, a small reservoir and a water supply system, a telecommunication system and a residential area. 2) a small port 3) two-lane road connecting Dawei SEZ to Baan Phu Nam Ron at the Thai-Myanmar border. A survey by a local civil society group indicated that ITD has completed a small port and some parts of the infrastructure such as an electric system, a small reservoir and a water supply system, telecommunications and residential area.

 Up to this date, ITD under the operation of the joint venture continued to develop the Dawei SEZ project following what’s planned for the initial phase. However, progress appeared minimal due to the victory of the National League for Democracy (NLD) in Myanmar’s general election in late 2015. The change in the government suspended many projects, especially large-scale development projects, as the new government had to review whether these projects align with the party’s policy. Dawei SEZ project was also one of the suspended projects. It was only in 2017 when the new government started to reconsider the Dawei SEZ project and approved ITD to continue the construction. On the other hand, the Dawei SEZ project was not suspended in Thailand. The Thai embassy in Yangon brought in representatives from the Office of the National Economic and Social Development Board (NESDB) and Roland Berger, a consulting firm, to inform the Myanmar government economic representatives on the details and importance of the Dawei SEZ project. In addition, on 15-16 August 2016, Thai transport minister, Arkhom Termpittayapaisith, and Myanmar minister of planning and finance, Kyaw Win, and minister of commerce, Dr. Than Myint, co-chaired a meeting at the Ministry of Planning and Finance in Naypyidaw. NESDB representatives along with the Thai ambassador to Myanmar; NEDA director, Newin Sinsiri; and Myanmar government officials joined the meeting. Both governments agreed to continue develop the Dawei SEZ project. The meeting updated the status of the initial phase, the Myanmar government’s national committee on special economic zone, and the Joint High Level Committee (JHC) and Joint Coordinating Committee (JCC). This meeting was an important indicator to show that both governments planned to push forward the Dawei SEZ project.

Starting in 2017, we can see that not only did ITD was allowed by the Myanmar government to continue developing the Dawei SEZ project but there was also progress on the trilateral collaboration among the Thai, Myanmar and Japanese governments. There were more meetings on the Dawei SEZ projects. For example, on 2-3 February 2018, Thai deputy prime minister, Somkid Jatusripitak, led a group of Thai businesspersons to meet Myanmar high-level officials. The meeting aimed to tighten relationships and ensure economic cooperations. In addition, on 20 February 2017, NEDA announced that it planned to continue the discussion on the Dawei SEZ master plan Thailand had with the Japanese government back in December 2015. The plan could be divided into shorter term—5 to 10 years—rather than the previous set-up at 20 years. Moreover, JCC resumed its meeting and formed two Joint Technical Taskforces to oversee two projects: the road link project and the initial phase project. The Joint Technical Taskforce was meant to increase flexibility and speed in the project thus build confidence among the investors.

During the first half of 2018, the Myanmar government’s efforts to push forward the Dawei SEZ became clearer. The road link project was set as top priority to increase confidence among the investors and expected to begin during second half of 2018. But there are many impediments. Affected communities along with civil society groups in Myanmar, Thailand and international level and Karen National Union (KNU) constantly resisted the project. The resistance arose since 2011 when the developers first started the project in Dawei but the operation lacked governance and respects for human rights, local communities and natural resources. Developers like ITD never provided fair compensation for the damages.

The road link project is an important project to monitor as it is part of the Dawei SEZ initial phase and the backbone of the Dawei SEZ project. As mentioned before, roads are important for the logistics system. The success of the road link project will prove the project is attractive to investors. Nonetheless, the Dawei SEZ project remains unclear for many investors. Concerns over the negative impacts of the project on local communities linger. For these reasons, continuous monitoring on investment governance by both the state and private business is crucial. The Thai cabinet in specific passed a resolution on 16 May 2016 titled “Summary of Findings, Recommendations and Policy On Fundamental Rights of Local Community: Dawei Special Economic Zone and Deep-sea Port Project in Myanmar By ITD[1] and stated that the project violated human rights of the Dawei people. The Cabinet’s resolution became critical in reviewing the governance of the Dawei SEZ project as it mentioned the three frameworks of the United Nation Guiding Principle on Business and Human Rights (UNGP)—Protect, Respect and Remedy. The Ministry of Foreign Affairs was allocated to create measures and monitoring guidelines for Thai investors to follow. The Ministry of Foreign Affairs was responsible for calling periodic meetings among the state and private sectors to ensure Thai outbound investors understand and do not violate fundamental human rights. Regardless, no action was taken. Only the Rights and Liberty Protection Department under the Ministry of Justice had started to draft the National Action Plan on Business and Human Rights (NAP), set to become effective by September 2018. In addition, another important stakeholder we cannot forget is the borrower. The Myanmar government as the borrower ought to have its own governance, conditions and procedures to exhibit how the loan is used.

The Mekong Butterfly and Extra-territorial Obligation Coalition Watch (ETOs Watch) conducted this research to monitor and review the Thai government’s 4.5 billion baht concessional loan (soft loan) to the Myanmar government for the road link project. The research included impacts of the project to reflect whether the project follow the Thai Cabinet’s resolution on 16 May 2016. It also reviewed whether the implementation of the project sincerely aimed to improve investment governance as prescribed by the UNGP and the Thai government’s claim to make human rights a “national mission[2].” The research further looked at the investment patterns of the Thai and Myanmar governments in the road link project. Damages and potential impacts along with concerns and demands raised by local community are also included. Findings would be presented at a public forum and later used by the Mekong Butterfly, ETOs Watch, civil society sector and academic institutions to formulate a strategy or framework to monitor and recommend responsible state departments to follow the Cabinet’s resolution. The findings may also be utilized to improve investment governance in Myanmar and enhance transboundary collaborations among civil society sector.

 

If you would like to read the full research report, You can copy this link to read

file:///C:/Users/Look%20Kate/Desktop/New%20folder/EN_8_รายการโครงการถนนสองช่องทาง_final_publish.html

 

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References

[1] The Secretariat of the Cabinet, Implementation of the Cabinet’s Resolution on Promoting Dawei Special Economic Zone and Related Projects. การดำเนินงานตามมติคณะรัฐมนตรีในการสนับสนุนการพัฒนาเขตเศรษฐกิจพิเศษทวายและพื้นที่โครงการที่เกี่ยวข้อง, Access: http://www.cabinet.soc.go.th/soc/Program2-3.jsp?top_serl=99313538&key_word=%B7%C7%D2%C2&owner_dep=&meet_date_dd=&meet_date_mm=&meet_date_yyyy=&doc_id1=&doc_id2=&meet_date_dd2=&meet_date_mm2=&meet_date_yyyy2

[2] Thai government, Prime Minister Sets Human Rights As National Mission Towards Thailand 4.0 and Sustainable Development On International Day of Human Rights. Accessed at http://www.thaigov.go.th/news/contents/details/10019

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