Prospect of Special Economic Zones in Myanmar

9 October 2018

In 2017, Myanmar’s GDP Annual Growth Rate was 5.90 percent, compared to 6.3 percent in 2016, as reported by Trading Economics. That means 0.4 percent decreased. For this year’s Myanmar’s GDP Annual Growth Rate,  it will increase or decrease?

Since 2014, Myanmar’s Special Economic Zones (SEZs) have been implemented. So, there are currently three SEZs development in Myanmar: Thilawa SEZ in Yangon Region, Kyauk Phyu SEZ in Rakhine State and Dawei SEZ in the Tanintharyi Region.

Dr. Charlie Thame, Faculty of Political Science, Thammasat University and who has been conducting Special Economic Zones research in Thailand, Myanmar and Cambodia, across the regions for about 5 years now, expressed the role of SEZs in Myanmar; how it can benefit to the people.

So, countries like Myanmar are often told that, in order to industrialize and to develop, they should be becoming corporative into this global value chain by creating the special territory that has special business, special regulation or track for investment and can create job, so the country like Myanmar can develop and can industrialize, can reduce reliance on sale, the extractive sector or agriculture. And then, this is going to contribute to the nation-wide economy development, shared prosperity and sustainable development.

Speaking of one winning example of SEZ, China can be a significant example of success of SEZs, said Dr. Charlie Thame.

Among SEZs in the world, China is often seemed to be the example of outstanding success. So, Special Economic Zone like Shenzhen Special Economic Zone, which was established in 1979. It is often widely regarded as helping China to reduce reliance on labor intensive low value added manufacturing, contributing, catalyzing the national economy development. So, technology and skill intensive higher value added production, that is lead to China becoming like this economy miracle that many people see today.

Shenzhen Special Economic Zone is a leading business, innovation and financial center in China, strategically located in Guangdong province, in the Pearl River region, and adjacent to Macau and Hong Kong. The fast-growing economy of Shenzhen presents three industries: shipping and logistics, high technology and financial services. Shenzhen, a world leader in shipping and supply chain with the world’s third busiest container port, it is a principal doorway into mainland China.

 Referring to a well-known English saying, “All that Glitters is not Gold”, meaning that not everything that looks precious or true turns out to be so, Dr. Charlie Thame explained some negative impacts of SEZs.

We start to see that all that Glitters is not gold. Actually, they may not be cost effective contribution to the country economic development. The idea what I was trying to share was to focus on whether or not the Special Economic Zone is a cost effective tool to catalyze a kind of economic development. There were established issues and problems related to violence against workers in SEZs. That can be negative impact on the environment. But, often, public officials will say these are sacrifices that have to be made in a greater good. Myanmar is a developing country that needs to catch up quickly. These are sacrifices that need to be made in order to achieve the end.

A local representative from Kyauk Phyu SEZ in Rakhine State, who joined Myanmar SEZ Forum: Possibility and Challenges on 6th of October, 2018 at Novotel Yangon Max opened up that he is worried of losing job when international companies and foreign investments are coming in. He shared his own personal experience that local people received the job during only the construction period. After the construction, when the operation process begins, local people become jobless because of unskillfulness.

To make Myanmar’s SEZs effective and fruitful, Dr. Charlie Thame expressed his opinion.

“I think what need to happen is that there needs to be much more transparent about decision-making process. There needs to be better data collection about job creation and growth about how surplus is spend: Is that reinvested in economy or Is it extracted to China, Japan, Thailand, etc. That kind of data is really important. If people are convinced of the benefit of thing like SEZs, then provide the evidence that actually works. It is a very simple thing to do. How can they be used to contribute to thing like sustainable development plan for Myanmar SEZs? Make sure that they actually mobilize towards end or productive end that Myanmar has itself rather than being the place that serves the interest of outsiders.