development-democracy-human security in myanmar (case study july 2012)

7/31/2019 Development-Democracy-Human Security in Myanmar (Case Study July 2012)

1/8

26/07/2012

1

Development, Democracy, and Human Security

in Myanmar:A Case Study of the Dawei Special Economic Zone

Presented to

ICIRD 2012 International Conference

Towards an ASEAN Economic Community (AEC):

Prospects, Challenges and Paradoxes in Development,

Governance and Human SecurityJuly 26 27, Chiang Mai, Thailand

Dr. Naruemon Thabchumpon, Dr. Carl Middleton and Mr. Zaw AungMaster of Arts in International Development Studies Program,

Faculty of Political Science, Chulalongkorn University

Funded by International Cooperation and Human Security,

Chula Unisearch, Chulalongkorn University (HS1069A)

Contents

SECTION III: Thailands Trade and Investment Role in

Myanmars Transitional Economy

SECTION III: Thailands Trade and Investment Role in


SECTION IV: Case Study: Dawei Deep Seaport and

Special Economic Zone

SECTION IV: Case Study: Dawei Deep Seaport and

Special Economic Zone

SECTION I:A Brief Background of Changes in Myanmar

in the Last Five Years

SECTION I:A Brief Background of Changes in Myanmar

in the Last Five Years

SECTION V: Benefits and Challenges Doing Business in

a Transitional Political Economy

SECTION V: Benefits and Challenges Doing Business in

a Transitional Political Economy

SECTION II: Reforms in the Political Economy of

Myanmar

SECTION II: Reforms in the Political Economy of

Myanmar


2/8

26/07/2012

2

Methodologies:Two-step Data Collection

First Step: Secondary data was collected through a deskreview of the existing literature on Thai-Myanmar trade

and investments and documents on the Dawei Deep

Seaport, and Special Economic Zone.

Second Step: the research team conducted primary data

collection by travelling to the field research sites in Yangon

and Dawei in Myanmar for one week from May 13 to 19,

2012.

Qualitative Research Methods: Semi-structured in-

depth interviews with key individual informants, focus

group discussions, and direct field observation.SECTIONI

Political Reforms Focusing on Peace and Reconciliation

Release of Political Prisoners step by step for several times, but

Inclusive political process (e.g. Daw Aung San Suu Kyi and her party in the

parliamentary framework), but

Resuming ceasefire talks with various ethnic armed groups, but

Allowing freedom of press (e.g. political coverage in media), but

Allowing freedom of association (e.g. Worker unions), but

Allowing freedom of expression (e.g.. Public demonstration), but

Listen to public opinions (e.g. Myitsone Dam and Dawei coal-fired power

plant), but

Legal Reforms Focusing on Economic Area

New laws enacted by Parliament

1) Environmental Law; 2) Labor Union Law; 3) Agricultural Land Law; and

4) Vacant, Fallow and Virgin Land Law

Draft laws waiting for the approval of parliament

1) Foreign Investment Law; 2) Securities Exchange Law

Laws in drafting process

1) Special Economic Zone; 2) Central Bank Law; 3) Minimum Wage Law

SECTIO

NI

I


3/8

26/07/2012

3

Financial Reforms Targeting ASEAN AEC 2015

Exchange Rate: Change to managed float of exchange rate system

Stock Exchange: Signed MoU with Diawa Institute of Research Ltd. , DiwaSecurities Group Inc. and Tokyo Stock Exchange Group Inc. (TSE)

Central Bank of Myanmar (CBM): Restructuring the CBM as anindependent financial institution free from the control of Ministry of Finance

National Private Banks: Allow private banks to open foreign currencyexchange counters and conduct foreign currency transaction.

Foreign Banks: the government is preparing to allow the foreign banks tooperate in the country before 2015.

Foreign Investment Policy

Four Key Policies

1) To protect the interest of Myanmar citizens; 2) To protect the dignity of the

State; 3) To protect national sovereignty; and 4) To allow environmental friendly

investment outlined by President Thein Sein in US-ASEAN Economic Forum

Key Standards applied by Myanmar Investment Commission1) To give protection to investors; 2) To focus on environmental protection; 3) To

focus on social impact protection; 4) To focus on transparency and accountability

in financial sector in accord with internationally accepted abiding system; and 5) To

focus on job creation, corporate social responsibility (CSR) and technology

transfer

Thai Foreign Direct Investment in Myanmar (Up to February, 2012)

Source: Eleven Media Group/Myanmar Government Statistics

Thailand and China (including Hong Kong) shared more than 75% of all

FDI in Myanmar.

Extractive industrial sectors shared 89% of the total FDIs in Myanmar

Thailand and China (including Hong Kong) shared more than 75% of all

FDI in Myanmar.

Extractive industrial sectors shared 89% of the total FDIs in Myanmar

SECTIO

NI

II

Thailands Trade and Investment Role in


Country No. of Companies Value (US $ Mil) %

China 33 13947.146 35.6%

Thailand 61 9568.093 24.6%

Hong Kong 38 6308.495 16.1%

Total 39188.147 100%

Sector Value (US $ Mil) %

Energy 18,873.720 47%

Oil and Natural Gas 13,815.375 35%

Mineral 2,749.463 7%

Total 39,958.787 100%


4/8

26/07/2012

4

Thailands Import Value Trading with Myanmar

(2001 -2011)

Year THB-US$*

Exchange Rate

CIF (THB)

All Items

CIF (THB)

Gas Only

CIF (US $)

Gas Only

% of

Gas Sale

2001 $1 = 43.00 35,789,673,029 28,888,386,599 671,822,944 80.72%

2002 $1 = 43.00 38,923,521,712 31,741,562,267 738,175,866 81.55%

2003 $1 = 41.53 37,213,471,890 29,393,441,465 707,764,061 78.99%

2004 $1 = 40.27 54,518,784,752 43,471,944,438 1,079,511,905 79.74%

2005 $1 = 40.27 71,915,931,550 60,085,625,312 1,492,069,165 83.55%

2006 $1 = 37.93 88,705,740,869 76,446,181,276 2,015,454,291 86.20%

2007 $1 = 34.56 79,992,859,159 71,922,427,574 2,081,088,760 89.91%

2008 $1 = 33.36 112,426,003,196 103,880,553,254 3,113,925,457 92.40%

2009 $1 = 34.33 95,975,915,242 87,644,323,375 2,552,995,246 91.40%

2010 $1 = 31.73 90,000,451,056 82,975,992,515 2,615,064,371 92.20%

2011 $1 = 30.49 99,725,430,586 93,821,035,484 3,077,108,412 94.08%

Source: Customs Department of Thailand Exchange Rate: Bank of Thailand

Thailands Export Value Trading with Myanmar

(2001 2011)

Year US$ - THB*

Exchange Rate

FOB (THB)

All Items

FOB (THB)

Fuel Oil Sale

FOB (US $)

Fuel Oil Sale

% of

Fuel Oil Sale

2001 $1 = 43.00 15,639,587,129 948,985,286 22,069,425 6.07%

2002 $1 = 43.00 13,602,269,761 825,515,940 19,198,045 6.07%

2003 $1 = 41.53 18,143,686,667 1,137,418,162 27,387,868 6.27%

2004 $1 = 40.27 24,241,973,300 1,469,209,826 36,483,979 6.06%

2005 $1 = 40.27 27,996,329,854 3,520,964,689 87,433,938 12.58%

2006 $1 = 37.93 28,699,602,989 4,850,392,004 127,877,458 16.90%

2007 $1 = 34.56 32,919,283,545 5,213,669,816 150,858,501 15.84%

2008 $1 = 33.36 43,840,707,157 7,967,512,492 238,744,379 18.17%

2009 $1 = 34.33 52,642,081,617 9,390,118,030 273,525,139 17.84%

2010 $1 = 31.73 65,631,180,240 10,426,475,533 328,599,922 15.89%

2011 $1 = 30.49 85,877,142,849 12,492,560,567 409,726,486 14.55%

Source: Customs Department of Thailand Exchange Rate: Bank of Thailand


5/8


6/8

26/07/2012

6

Rule of LawBusiness agreement first,SEZ law later.

Constitution first,environment and social impact assessments later

Grabbing farmlands and plantations first , compensation later

Redrafting SEZ law, cancellation of coal-fired power plant and MaxMyanmars withdrawal from the project.

ITD took political risks to secure lucrative business concession

Investment & EnergyInvestment must be transparent, accountable, environment-friendly andcreate jobs. (E.g. 4,000 MW coal-fired power plant)

An immediate solution is to set up 150 MW combined cycle power plantwith the natural gas bought from Indonesia, according to ITD

Land Acquisition & Involuntary Resettlement

Complex land acquisition through buying lands with different prices,causing price disputes and land speculation.

Involuntary resettlement is the most challenging task and also costly.

Design of relocation housing plan:Town setting vs.Village setting

No arable land for the relocated villagers, causing livelihood security

No more rice field,causing food security

Political Risks and Human Security Implications

in Dawei Project

Lack of Transparent Information and Public Participation

ITD released project information highlighting the projects benefits, but hidingenvironmental and social costs.

ITDs public participation strategy is just to bargain the land price with the localvillagers, using the power of local authorities who persuade and threat thevillagers to sell their lands.

The feeling of uncertainty and anxiety spread in the affected village communitiesdue to the lack of useful information for the locals and their meaningfulparticipation.

Rising Social Movements

Due to the exclusion of the local communities in the process, they tried tolearn by themselves what is going on in their area and what will be the impactsof this project to their life and livelihoods.

Social movements emerged with the concerns to loose their ancestral lands,cultural identity, social values and traditional practices while protesting againstany harmful impacts on the environment.

Lack of Socio-cultural Awareness Leading to Social Discontents

NewYorkTimes:An Industrial project that could change Myanmar

Dawei isalmost deserted wild and sparsely populated southern coast.

Theres nothing in the country but wilderness and cheap labor.

Some industries are not suitable to be located in Thailand. This is why theydecided to set up there [Dawei].


7/8

26/07/2012

7

CSR Policy of ITD

Business Ethics: The Company will avoid engaging the activities which are against morality.

Respect to Human Right and Labor Equity:

Human resource is the effective factor to drive the business The Company,

therefore, shall improve their working environment

Community Development:

The Company will establish the activities which can strengthen the

community for example the education support, human resource development,

employment creation, and other development project.

Environmental Concern

The Company, therefore, shall set the environmental impact protection

system comply with laws and regulation and participate in environmental activitieswith other part of society.

CSR Report:

The Company will disclose the information related to CSR activities of the

Company in the annual report.

Benefits and Challenges of Doing Business

in a Transitional Political Economy

SECTIO

NV

Is it the right time to implement a project like Dawei deep

seaport and SEZ as Myanmar is in a transformation stage of

changing governments and governance structures?

From the regional economic integration perspective, it could be the

right time to carry out the project because of the aspiration for an

ASEAN Economic Community in 2015 and the project could play a key

role in this process.From the domestic perspective, it is also true that Myanmar needs to

develop its economy with the help of foreign direct investment,

especially in this time of transforming the country towards the

democratic governance.

However, it is vital that all of the stakeholders do not overlook or

underestimate the importance of addressing the long list of issues

identified above, including the rule of law, the quality of foreign

investments, energy, land acquisition, involuntary resettlement,

compensation and environmental challenges.

The most daunting challenges is the lack of established institutional

ca acit conducive to such a lar e-scale industrial develo ment ro ect.


8/8

26/07/2012

The process of regionalization that has been taking place inthe vicinity of Myanmar will suddenly collide with the

country and its people as Myanmar opens up its borders to

re-engage with the region.

Under the present circumstances, Myanmar will not benefit

from the Dawei project as much as it could if the

government doesnt pay serious attention to the issues

identified in this paper, and if a greater regard is not played

to the importance of public participation and the role of

civil society.

As such, if the project is to proceed, whether it will benefitall or instead be the source of trans-boundary social and

environmental injustice remains to be seen.

CONCLUSION

Thank for your attention!

development-democracy-human security in myanmar (case study july 2012)

Documents