![Daweiairport](https://upload.wikimedia.org/wikipedia/commons/7/78/Daweiairport.jpg)
The Dawei deep-sea port and
special economic zone
A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increas ...
is an infrastructure project in
Burma
Myanmar, ; UK pronunciations: US pronunciations incl. . Note: Wikipedia's IPA conventions require indicating /r/ even in British English although only some British English speakers pronounce r at the end of syllables. As John Wells explai ...
. Construction started, but was suspended in 2013. Plans to resume construction were announced in August 2015.
It is in
Dawei
Dawei (, ; mnw, ဓဝဲါ, ; th, ทวาย, RTGS: ''Thawai'', ; formerly known as Tavoy) is a city in south-eastern Myanmar and is the capital of the Tanintharyi Region, formerly known as the Tenasserim Division, on the northern bank of ...
, the capital of the
Tanintharyi Region
Tanintharyi Region ( my, တနင်္သာရီတိုင်းဒေသကြီး, ; Mon: or ; ms, Tanah Sari; formerly Tenasserim Division and subsequently Tanintharyi Division, th, ตะนาวศรี, RTGS: ''Tanao Si'', ...
. It aims to transform Dawei into Myanmar's and Southeast Asia's largest industrial and trade zone.
It aims to develop local businesses, provide local employment opportunities, and stimulate the construction of infrastructure.
It is notable for its tumultuous history, as many financial and
human rights violations
Human rights are moral principles or normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for certain standards of hum ...
have arisen during the project's history. If completed, it will be the largest industrial zone in Southeast Asia.
Dawei Special Economic Zone law
The Dawei Special Economic Zone Law, officially known as The State Peace and Development Council Law No. 17, was passed on 27 January 2011. The law has a number of notable tax breaks for
investors
An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Type ...
and
developers, in order to spur
investment
Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.
In finance, the purpose of investing i ...
in the region. The law stipulates that two zones, the promotion zone and the exempted zone, are to exist within the
special economic zone
A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increas ...
itself. The two zones differ in their tax breaks.
Income tax breaks
Investors in the project are exempt from
income taxes
An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...
on their businesses for their first seven years of operation in the exempted zone, and for their first five years of operation in the promotion zone. In both zones, investors receive 50% relief in their second five years of operation, and 50% relief on all profits in their third year of operation. Developers have all of the same stipulations, except they are exempted from income tax in their first eight years of operation.
Customs duties
Developers are exempted from
customs duties
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and poli ...
for construction materials, machinery, equipment, heavy machinery, and vehicles. Investors have the same exemption in the exempted zone, but in the promotion zone pay 50% of normal duties for the first five years of transport into Dawei.
Business and investors' rights
Businesses in the Dawei port project have been granted a number of rights by the law which are not common elsewhere in Burma. They are given the right to open foreign bank accounts, and have relaxed currency exchange restrictions. Additionally, foreign companies and investors are allowed to invest in the project, and the government does not regulate product pricing. The law also stipulates that the government will not seize, or nationalize businesses in the zone.
Proposed zones
The project, as stipulated by The Dawei Special Economic Zone Law, aims to construct many differentiated zones. High-tech
industrial zones,
information technology
Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology system (I ...
zones, export processing zones,
port
A port is a maritime facility comprising one or more wharves or loading areas, where ships load and discharge cargo and passengers. Although usually situated on a sea coast or estuary, ports can also be found far inland, such as Ham ...
area zones, transportation zones, technological
research & development
Research and development (R&D or R+D), known in Europe as research and technological development (RTD), is the set of innovative activities undertaken by corporations or governments in developing new services or products, and improving existi ...
zones,
service business zones, sub-trading zones, and governmental zones are all part of the construction project. In the construction of these zones, law also stipulates that investors and developers must employ local workers. Businesses are supposed to find these workers via labor recruitment agents. Twenty-five percent of their non-specialist workforce is required to be employed by Burmese citizens during their first five years, 50% during their second five years, and 75% during their third five years. Businesses are also required to supply adequate training for all of their employees.
The project is also set to include a 160 kilometer-long two lane super highway that connects the zone to the Thai-Burma border. A large amount of infrastructure is required to be built as well, so a high-speed railway, an electric grid, a dockyard, a deep sea port, and oil and gas pipelines are slated for construction.
The entirety of the special economic zone is slated to be 196 square kilometers, and will be ten times larger than Thailand's largest industrial zone.
Construction timeline
Initial plan and project suspension
Thailand and Burma signed a
memorandum of understanding (MOU) to develop the Dawei Special Economic Zone (ထားဝယ်အထူးစီးပွားရေးဇုန်) in 2008.
Another MOU was signed in July 2012. The Burmese and Thai governments then agreed to complete the project by 2015 at an
ASEAN
ASEAN ( , ), officially the Association of Southeast Asian Nations, is a political and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, militar ...
summit in November 2012.
The estimated total costs of the project were US$8.6 billion, but those estimates have since risen to US$10.7 billion.
![Map and flag of ASEAN countries](https://upload.wikimedia.org/wikipedia/commons/d/df/Map_and_flag_of_ASEAN_countries.png)
Burma initially granted
Italian-Thai Development
The Italian-Thai Development Public Company Limited ( th, บริษัท อิตาเลียนไทย ดีเวล๊อปเมนต์ จำกัด (มหาชน)) was formed on 15 August 1958 as the "Italian-Thai Corpora ...
PCL (ITD) a 75-year concession in 2008 to construct the project, and attract investment, as a part of the first memorandum of understanding. The investment required to develop the zone at the time was estimated to total US$8.6 billion, and require 1,000 laborers.
Progress slowed due to a lack of funds, but the Thai and Burmese government opted to continue construction despite this.
In 2012, Max Burma Conglomerate confirmed that it would pull out, giving up its 25% stake in the project. In 2013, after failing to attract enough investment, and failing to commit to a power source, ITD was stripped of its position as the sole leader of development in the zone.
The Thai and Burmese governments temporarily seized responsibility from ITD, in an attempt to rescue the floundering project.
Han Sein, the Chairman of the Dawei Special Economic Zone Management Committee told reporters, "In this economic zone, there needs to be a lot of investors."
The ITD was then required to halt activities so that the three international auditing companies Ernst & Young, PricewaterhouseCoopers, and Deloitte could check to see if the project was being built to international standards.
Up until the suspension of construction in 2013, the ITD had spent US$189 million on the project.
Following this suspension and Max Burma Conglomerate's pullout, the Burmese and Thai governments both took 50% stakes in the project, and looked to attract international investors.
Thailand and Burma proposed involving
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
as a third-party investor, but the Japanese government declined to invest in the project.
Despite consistent pressure from the Thai government, significant funding from Japanese investors did not occur. In 2013, Thailand's Office of Transport and Traffic Policy and Planning conducted a new feasibility study of the zone's infrastructure, as Japan had disagreed with the plan made by Italy-Thai group.
Thai banks committed US$4 billion following these issues, in an attempt to keep the project moving.
Resumption
The initial resumption of construction was set for 15 May 2014, but was delayed as both governments looked for investors. Additionally, they created a new plan, which involved two phases of construction, the initial phase, and the full-fledged phase.
The new plan also stipulated that the zone would cover 196 square kilometers, instead of 204.5 square kilometers.
Many experts thought that the Dawei Special Economic Zone was doomed to failure.
The Economic Affairs Officer at The
United Nations
The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and international security, security, develop friendly relations among nations, achieve international cooperation, and be ...
Economic and Social Commission for Asia and the Pacific said that Kalargote Island looked like a more promising, and more feasible opportunity, noting that a logistically-sound deep sea port should be the singular focus of Burma's next step forward in their industrialization.
In 2014, the Thai and Burmese governments officially announced that they planned to revive the project, which had been dormant for the past two years. They plan to utilize ITD once again, while bringing in the help of Rojana Industrial Park PLC.
![Nyan Tun World Economic Forum 2013](https://upload.wikimedia.org/wikipedia/commons/4/44/Nyan_Tun_World_Economic_Forum_2013.jpg)
On 30 January 2015,
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
agreed to participate in the project. It was revealed that they will hold equal partnership to Thailand and Burma in the Dawei Special Economic Zone Development Co, and intend to provide technical and financial support for the project. On the same day, Rojana and ITD announced that they will sign an agreement in March 2015 to develop the initial phase of the project, which is estimated to cost US$1.7 billion.
The new plan states that the 160 kilometer road to the Thai-Burmese border will be built first, with a budget of US$119 million.
The Thai government will provide Burma with soft loans to help provide the necessary capital. Thai Deputy Prime Minister Pridiyathorn Devakula said that during this first phase of construction, they aim to complete a small port, a reservoir, a telecoms network, and other basic infrastructure projects in the next five years.
This initial phase is set to cover 27 square kilometers of the planned 196 square kilometer industrial complex.
Burma's
Vice President
A vice president, also director in British English, is an officer in government or business who is below the president (chief executive officer) in rank. It can also refer to executive vice presidents, signifying that the vice president is on t ...
Nyan Tun
'' Thray Sithu'' Nyan Tun ( my, ဉာဏ်ထွန်း; born 12 January 1954) is a Burmese politician who currently serves as a member of parliament in the House of Representatives for Zigon Township constituency. He previously served as Sec ...
said that with the help of Japan, this project will now be able to move along quickly.
Moving away from the stipulations made in the Dawei Special Economic Zone Law of 2011, it was also announced that the Neighboring Countries Economic Development Cooperation Agency are being hired to redevelop a master plan for the zone.
Controversy and human rights issues
The Dawei Development Association
This special economic zone project has been criticized extensively for its
human rights abuses
Human rights are moral principles or normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for certain standards of hum ...
of local villagers. There is significant opposition from local populations, due to alleged land seizures, forced evictions, insufficient compensation for confiscated farmland, and denial of their right to sufficient food, and adequate housing. Additionally, there is a significant fear of health problems, as the massive industrial complex will be a significant polluter.
The Dawei Development Association, a coalition of civil society groups, was set up by residents of Dawei to look into the project, and raise awareness.
U Tin Maung Swe, chairman of the Support Group for the Deep Sea Port and Special Economic Zone, responded to concerns by telling the media, "People have criticized this project because of the chemical industries and their fears of the effect on the environment and the social structure. We won't accept any investment that could have a negative impact. We want labor-intensive industries that can produce value-added local products. We're always thinking about the public interest."
According to U Phone Shwe, Deputy Minister for Social Welfare, Relief, and Resettlement, residents, who have in total lost over 6,000 acres of land to the project thus far, have received US$33 million in compensation.
The project expects to owe villagers about US$307 million more moving forward.
According to the villages of the area and the Dawei Development Association (DDA), villagers were either underpaid by the project, or not paid at all.
When villagers were paid, they weren't given enough money to buy new farmland, which lowered their standards of living.
They estimate that 20 to 36 villages housing 22,000 to 43,000 people will be affected by the project.
The DDA called for a freeze on the special economic zone in 2014, in hopes to prevent it from resuming at a large scale without human rights abuses being attended to.
The DDA also called for The National Human Rights Commissions of Thailand and Burma to conduct a full investigation on human rights abuses in the mega-project, as a part of a report that they released, titled ''Voices From the Ground: Concerns Over the Dawei Special Economic Zone and Related Projects'', which evaluated the abuses.
The DDA received an audience with The National Human Rights Commission of Thailand in October 2014 after releasing their report, to submit findings on human rights abuses in the project.
According to the report, two-thirds of households didn't receive information from the ITD or the government about the project.
Only 15% of households received any form of compensation for lost land, and many families were coerced or tricked into relocation.
Additionally, only 27% of surveyed residents ever received consultation meetings, and said meetings were oftentimes one-way and non-negotiable.
Despite the stalling of operations in 2013, much of the land for the project has been seized and cleared, and 71% of households in the area are expected to lose their land to the project.
Upon receiving the report, Thai officials deflected the blame onto the Burmese government, whose own National Human Rights Commission has not offered the DDA an audience.
The Tavoyan Women's Union
The Tavoyan Women's Union, a local rights
NGO
A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in h ...
in Dawei, released a 2014 report titled ''Our Lives Not for Sale'', that claimed the project was destroying local economy.
The report describes how the Dawei Special Economic Zone project has undermined local agricultural and fishing livelihoods, through the confiscation of land, restriction of coastal access, and destruction of farmland.
The report also found that villagers in Dawei were now facing food insecurity, and three-quarters of people surveyed reported that they had to take their children out of school for financial reasons.
In another report, they found that people near the proposed site had a loss in income, which forced many of them to send family members to Thailand to work.
Five weeks after ''Our Lives are Not for Sale'' was published, U Phone Swe, a Deputy Minister in the Tanintharyi Regional Government, organized a public demonstration in support of the special economic zone.
The 300 demonstrators shouted that the TWU, and everyone else who didn't support the project was their enemy. The TWU also reported that government officials went to teachers in the region, and told them not to teach about the negative impacts of
coal
Coal is a combustible black or brownish-black sedimentary rock, formed as rock strata called coal seams. Coal is mostly carbon with variable amounts of other elements, chiefly hydrogen, sulfur, oxygen, and nitrogen.
Coal is formed when dea ...
. They allegedly warned the teachers not to oppose the coal project, as they were "teaching politics".
See also
; General
*
Economy of Burma
The economy of Myanmar has a nominal GDP of US$69.26 billion in 2022 and an estimated purchasing power adjusted GDP of $257.34 billion in 2022 according to the International Monetary Fund. For the 2022 estimate, GDP per capita in Myan ...
*
Special Economic Zone
A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increas ...
; Exclusive economic zones
*
Exclusive economic zone of India
India has the 18th-largest exclusive economic zone (EEZ) with a total size of . It includes the Lakshadweep island group in the Laccadive Sea off the southwestern coast of India and the Andaman and Nicobar Islands at the Bay of Bengal and the And ...
*
Exclusive economic zone of Indonesia
Indonesia has the sixth-largest exclusive economic zone ( id, Zona Ekonomi Eksklusif, ZEE) in the world with . It claims an EEZ of 200 nautical miles (370 km) from its shores. This is due to the 13,466 islands of the Indonesian archipelago ...
*
Exclusive economic zone of Malaysia
Malaysia claims an exclusive economic zone (EEZ) of with from its shores. The EEZ includes much of the southern area of the South China Sea. Malaysia has the 29th longest coastline of . The coastline comprises two distinct parts of Malaysia. T ...
*
Exclusive economic zone of Thailand
Thailand has the world's 64th largest exclusive economic zone (EEZ), with an area of . It claims an EEZ of from its shores, which has long coastlines with the Andaman Sea and Strait of Malacca to the west and the Gulf of Thailand to the east, al ...
; Major regional port projects
*
Sabang strategic port development, India-Indonesia project
*
Sittwe Port
Sittwe Port is a deepwater port constructed by India in 2016 at Sittwe, the capital of Rakhine State in Myanmar, on the Bay of Bengal. Situated at the mouth of the Kaladan River, the US$120 Million port is being financed by India as a part of the ...
, India-Myanmar project
*
India's Look-East Connectivity projects
References
Further reading
*
*
*
* See the chapter on Dawai City in 'Ecotopia 2121: A Vision of Our Green Utopia in 100 Cities' written by A. Marshall and published by Arcade Publishers (2016).
External links
Dawei Development Company LimitedOur Lives Not for SaleVoices From the Ground
{{coord missing, Myanmar
Ports and harbours of Myanmar