Construction of an economic zone dedicated to promoting trade, manufacturing and services in the outskirts of Maungdaw Township in northern Rakhine State is expected to start when the current situation in the area has calmed down, a regional minister said.
MAUNGDAW economic zone, located in Kanyin Chaung, will commence its construction within this fiscal year when the region has stabilised, state minister for finance, revenue, economics and planning U Kyaw Aye Thein told The Myanmar Times.
This economic zone is not to be confused with the Special Economic Zones (SEZs) in the country which are governed under the SEZ Law. The zone in Maungdaw is expected to focus on trade with Bangladesh as well as manufacturing, finance and services industries, but will not be designated as an SEZ.
Sean Bain, legal consultant from the International Commission of Jurists in Myanmar, said establishing an SEZ at Maungdaw would not be a right move.
“Problems with the legal framework for SEZs and the human rights abuses associated with them are well documented. It is hard to imagine a more inappropriate site for the development of another SEZ given the ongoing conflict, overall insecurity and appalling human rights situation in the area,” he said.
Yesterday, the Rakhine regional minister has clarified that the economic zone will not be designated as an SEZ.
Fostering growth
The project’s aim is to foster economic growth, create jobs and promote regional stability based on long-term economic development, according to the regional minister.
“There are some difficulties regarding the security conditions in Maungdaw. But we plan to initiate the development of the zone in Maungdaw Township, including the provision of security and other rights.
“First, we will build a trade zone in Kanyin Chaung with full security [protection]. Afterwards, we will do so for Maungdaw Township.
“In the long run, we expect to achieve economy-based stability. We will start the project during this fiscal year.
At present, security is an issue. When the situation is stable, we will start implementing the project. U Kyaw Aye Thein, Rakhine State government
Local residents in the area will also benefit from the jobs created, and the project will also facilitate regional economic development. Importantly, with more opportunities for employment made available, ethnic minorities from other states are also expected to move to the region.
“When the economic zone is completed, it will be much more convenient. It will create jobs and result in more development. It can reduce conflict,” U Kyaw Aye Thein added.
“When the economy has improved [in the future], no one will make trouble. That is human nature. Therefore, we will have to push the implementation of the economic zone project at the earliest opportunity,” Maungdaw Border Trade Association chair U Aung Myint Thein said.
Myanmar has been exporting marine products and agriculture products to Bangladesh via Maungdaw trade camp since 1995, and the former enjoys a trade surplus with 90pc export and 10pc import, he told The Myanmar Times.
According to the statistics from the Ministry of Commerce, Maungdaw border trade volume in 2016-17 fiscal year amounted to US$5.95 million. For the current fiscal year, until June 2017, the volume reached $2.61 million, but with no imports for Myanmar. The absence of import from Bangladesh is due to regional instability in Maungdaw. It is also partly because Bangladesh imports can enter the Myanmar market via Sittwe border trade camp.
Raising funds
The Maungdaw project originally began in October 2015 under U Thein Sein’s presidency, with K600 million from the Union government and K400 million from a consortium of private businesses. Under the new National League for Democracy-led government, the project will continue under a public-private partnership between the Rakhine State government and a consortium of private companies.
Public-private partnerships (PPP) between a government agency and private-sector company can be used to finance, construct and operate projects, such as public road networks, transport systems and night markets.
In 2017-18 fiscal year, a total of K2.2 billion comprising K1.5 billion from the state government and K700 million from the consortium will be used for the construction of the zone. The site will cover 50 acres of land initially and arrangements are underway for the state government and the consortium of businesses to sign an MoU. There is no timeline for the signing of the MoU yet.
When complete, Maungdaw economic zone will occupy 100 acres of land in Kanyin Chaung, which is not far from Maungdaw centre. It is understood that the zone is located by a river, which has sufficient depths to accommodate marine vessels. According to a local media report in February this year, two jetties along the river have already been constructed.
The first phase of the zone will place an emphasis on trade with Bangladesh, while subsequent development will expand into the manufacturing, financial and services sectors, including banks, factories and other industries in the area, U Kyaw Aye Thein said.
