thailand interested in myanmar especially in karen state

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Ambassador Leads Thai Business Delegation to Kayin State

***********************

Meeting with Kayin State Government and Kayin State Chamber of Commerce

and Industry (KSCCI)

During 23 - 25 November 2017, Ambassador Jukr Boon-Long led a

delegation of Thai businessmen to participate in the Kayin State Investment Fair

seminar and to survey economic opportunities in Kayin State. The delegation

included 16 Thai businessmen from various sectors, including finance and

banking, construction, information technology, telecommunications, energy,

agriculture and geo-mechanical services.

In Hpa-An, the delegation had the opportunity to pay a courtesy call on

Her Excellency Daw Nang Khin Htwe Myint, Chief Minister of Kayin State, and

members of the Kayin State government. This included U Than Naing, Minister of

Planning, Finance and Municipal Affairs, U Saw Myint Oo, Minister of

Agriculture, Livestock and Irrigation, U Soe Hlaing, Minister of Electricity and

Industry, U Saw Pyi Thar, Minister of Environment, Forestry, Mines, Roads and

Communication, Dr. Tin Win Kyaw, Minster of Social Affairs, and U Khin Mg

San, Secretary of Kayin State Government.

The delegation also met with Kayin State Chamber of Commerce and

Industry (KSCCI) members led by U Saw Han Aye, Chairman of KSCCI. During

the meeting, Ambassador emphasized the purpose of the visit to survey

opportunities for investment, trading, and building connections between the Thai

private sector and local businessmen in Kayin State. The delegation also wished to

learn about Kayin State government’s economic policy and prioritized sectors for

business development in the region. In addition, the visit was also an opportunity

for the Thai private sector to present their products and services to the Kayin State

government.

Ambassador also mentioned that the Thai private sector are not only seeking

business opportunities, but are also looking to give back to the local community by

implementing corporate social responsibility (CSR) projects. The Chief Minister

of Kayin State welcomed Thai investment in the area and mentioned that the Kayin

State government is improving infrastructure, such as roads, railroad, and ports, to

facilitate investment. As such, the Chief Minister encouraged the Thai private

sector to be more confident in investing in Kayin State. The delegation, Kayin

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State government, and KSCCI then discussed the potential for doing business in

infrastructure, agriculture, energy, and manufacturing sectors.

Summary of Opening Speeches at Kayin State Investment Fair

On 24 November 2017, the Kayin State Investment Fair was co-organized

by the Myanmar Investment Commission (MIC), Kayin State Government, and the

Japan International Cooperation Agency (JICA). The purpose of the event was to

promote investment opportunities and to build connections between local and

foreign investors to strengthen their investment network in the area. The Kayin

State Investment Fair exhibition was officially opened by His Excellency U Kyaw

Win, Union Minister for Planning and Finance, and Her Excellency Daw Nang

Khin Htwe Myint, Chief Minister of Kayin State. After the opening ceremony,

distinguished guests visited the exhibition and then attended the seminar.

Her Excellency Daw Nang Khin Htwe Myint, Chief Minister of Kayin State

delivered the opening speech. She emphasized that, apart from the two commercial

cities of Yangon and Mandalay, Kayin state also has business potential due to its

abundant fertile soil and natural resources, beautiful rivers and mountains, ancient

stupas and caves, and its location on the Thai-Myanmar border, as well as the

Asian Highway, which makes it a good commercial and transportation hub. Hence,

the Kayin State government welcomes local and foreign investors to invest in the

tourism business, agriculture and agro-based industries, manufacturing, electricity

generation and distribution, or telecommunications in Kayin State.

The keynote speech was then delivered by His Excellency U Kyaw Win,

Chairman of the Myanmar Investment Commission (MIC) and Union Minister for

Planning and Finance. He expressed his thanks to development partners such as

JICA, GIZ, DaNa Facility, the World Bank Group, and Asian Development Bank

for assisting in various aspects on the improvement of Myanmar’s investment

climate. He also thanked the Government of Thailand for supporting the

construction of a new bridge linking the two countries and improving an important

part of the East-West Economic Corridor that runs through Kayin State.

His keynote speech ended by encouraging investors to consider doing business in

Kayin State, which will be beneficial to the local people and local businesses.

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U Saw Han Aye, Chairman of KSCCI reassured that KSCCI welcomes

potential investors who are interested to invest in Kayin State. He highlighted that

the Kayin State government is implementing basic infrastructure for the state’s

development. At the same time, there are challenges and opportunities for doing

business in Kayin State, but together, business partners can work together to create

a successful future. He invited factories to invest in Kayin State, which is in need

of factories to manufacture value-added products from different sectors, such as

agriculture and livestock. Chairman of KSCCI encouraged participants at the

seminar to learn from the past and to effectively build a future which will benefit

everyone in the area.

Mr. Masayuki Karasawa, Chief Representative of JICA Yangon Office,

informed that JICA has been supporting the improvement of Myanmar’s

investment climate and industrial development in areas such as intellectual

property, legal reform and tax administration at both the state and union level.

Furthermore, he mentioned JICA’s financial support for small and medium

enterprises in Myanmar through loans and the development of human resources in

the industrial sector at the Myanmar-Japan Center. He also encouraged potential

investors to do business in Kayin State and wished for fruitful discussions and the

exchange of opinions between local businesses, local investors, and foreign

investors.

Ambassador Jukr Boon-Long delivered the opening address at the Kayin

State Investment Fair. He emphasized the importance that the Royal Thai

Government gives to joint development of border areas with neighboring countries,

which includes facilitating and promoting trade and investment, as well as people-

to-people contacts and tourism promotion. Ambassador also highlighted the

importance of the Mae Sot - Myawaddy International checkpoint, and further

discussions between Thai and Myanmar agencies to consider increased facilitation

for border crossings. Finally, the Thai Ambassador confirmed the readiness and

interest of the Thai private sector to invest in Kayin State and to collaborate with

their Myanmar counterparts on the country’s development.

The seminar was subsequently followed by seven presentations on Kayin

State: (1) fertile emerging frontier; (2) opportunities for investment in agriculture

sector; (3) mineral resources and investment opportunities in Kayin State;

(4) explanation of the significance of electricity and energy; (5) investment

opportunities of tourism industry in Kayin State; (6) transportation and logistics

4

development; and (7) summary of the findings of investment opportunity survey in

Kayin State. The Thai business delegation from Uttaradit Province, Tak Province,

and Phitsanulok Province of Thailand also attended the seminar.

Presentations at Kayin State Investment Fair

The 1st presentation was given by U Aung Naing Oo, Director General at the

Directorate of Investment and Company Administration (DICA). He highlighted

the reasons why investors should invest in Kayin State, such as tax incentives,

abundant resources, potential for tourism industry, linkage to the Greater Mekong

Sub-region (GMS) East West Economic Corridor, and second largest border trade

zone located in Kayin State. He concluded his presentation by welcoming all

investors to invest in Kayin State and described the state as an opportunities and

investment nexus for all investors.

U Hla Myint Aung, Deputy Director General of the Department of

Agriculture, presented the current situation and the development of the agricultural

sector in Myanmar. He addressed the important role of the agriculture sector, seed

development, food safety, and good agricultural practices (GAP) in Myanmar.

He also explained potential investment opportunities in each industry in the

agricultural sector, such as seed, fertilizer, pesticides, agri-machinery and irrigation

technology. Moreover, there are also opportunities for production and processing

industries, such as crop production, research and development.

The mineral resources and investment opportunities in Kayin State was then

presented by Dr. Zaw Linn Aung, Department of Geological Survey and Mineral

Exploration, Ministry of Natural Resources and Environmental Conservation. He

listed the investment opportunities for various minerals in Kayin State and

different types of permit for investors if they interested to invest in the mining

sector. In addition, he recommended minerals with potential for future exploration

and mining in Kayin State, such as limestone, coal gypsum, antimony, gold and

iron. Finally, he concluded his presentation by inviting more cooperation between

Myanmar and other counties in building green mines and promoting sustainable

development in mineral resources for the future.

The significance of electricity and energy in Kayin State was presented by

U Thar Soe, Deputy Chief Engineer, Ministry of Electricity and Energy. He

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indicated that the total capacity for Kayin State is now 43.77 MW and that the

State is currently planning to operate a coal plant, which can supply 1,280 MW

from Thailand TTCL Public Company Limited in the 2019 - 2020 fiscal year.

The details of the presentation included the list of electrified households in each

district in Kayin State, completed electricity supply projects, and ongoing projects

in Kayin State.

Investment opportunities of tourism industry in Kayin State was presented

by U Aye Maung Hlaing, Deputy Director General, Ministry of Hotel and

Tourism. He described Kayin State’s natural beauty which has high potential for

the tourism industry, as well as popular festivals in Kayin State. He listed popular

tourist sites in Kayin State, such as Zwe Kabin Mount, which is enshrined with

Buddha’s hair, and Zwe Kabin Festival, which is on Taboung full moon day.

Kyauk Ka Lap is also a popular tourist attraction, which is 4 km away from down

town Kayin State. In addition, Kayin State is home to many caves, including Sa

Dan Cave, Kaw Goon Cave, Bayint Nyi Cave, Ya Thae-Pyan Cave, Kaw-Ka-

Thaung Cave and Lynn-Noe Cave (Bat Cave). He also informed that there are 23

licensed hotels, with a total of 800 rooms, and 540 rooms are under construction.

In addition, 12 travel agencies are registered in Kayin State, which received

171,281 tourists until September in this fiscal year 2017 - 2018. Most travelers

enjoy mountaineering, biking, rowing, and nature in Kayin State. In conclusion, he

suggested that interested investors in tourism should visit

www.myanmartourism.org, to easily access information on how to start a tourism

business in Kayin State, as well as other parts of Myanmar.

Captain Aung Khin Myint, Chairman of the Myanmar International Freight

Forwarder’s Association (MIFFA), presented the development of transportation

and logistics in Myanmar. He informed that among the five stages in the

transformation from a transport corridor to an economic corridor, Myanmar has

reached the second stage, which is called the Transport and Trade Facilitation

Corridor. The government has also implemented the Myanmar Automated Cargo

Clearance System (MACCS) since 2016, which will be available to Myawaddy

Border Trade Zone in 2018. He also mentioned that there are two seamless

transport road projects implemented by the Ministry of Transport since March

2017. As a result, freight can easily cross the border to reach its destination in less

time. Finally, he invited all interested investors to invest in the logistic sectors in

Myanmar, to assist Myanmar in reaching the next three stages of corridor

http://www.myanmartourism.org/

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development, namely, logistics corridor, urban development corridor, and

economic corridor.

Kayin State Investment Opportunities Survey

Mr. Takafumi Ueda, JICA Advisor, and U Aung Min, Research Director of

Myanmar Marketing Research and Development (MMRD), explained the findings

of the Kayin State Investment Opportunities Survey. Based on the findings, the

infrastructure readiness of Kayin State is only 64 megawatt out of the 92 megawatt

in demand, 31 percent of electrified households and only three cities have access to

power distribution from the national grid. Kayin State receives electricity from a

230 KV power distribution plant in Mawlamyine, Mon State, and 230 KV

transmission line is under construction from Mawlamyine to Myawaddy. With

regard to industrial zones, there are 27 businesses registered in the Hpa-An

Industrial Zone, but only seven are in operation. There are also seven ongoing

projects in Kayin State, such as Shwe Hpar Si Housing (1) Hpa-An township (116

rooms), Shwe Hpar Si Housing project (2) Hpa-An Township (300) rooms, Hpa-

An City Strand Road Development Project, Zwe Gabin Mountain cable car project

(Myanmar Native Land Public Co.,Ltd), Hpa-an Industrial Zone water supply

system (Fultex), Hpa-An Jetty (4,000 tons) (Kyaw Hwan Moe Co., Ltd), and

Myawaddy Economic Zone (Nyi Naung Oo development).

According to the survey, potential investment businesses in Kayin State

include agricultural and agro-based sector (cardamom, pepper, coffee, rubber, tea,

agarwood, maize), tourism sector (natural tourist attractions, such as caves,

waterfalls, pagodas), manufacturing sector (garment, rice mills, rubber mills),

electricity sector (electrical power generation), livestock and fishery Sector

(prawns, fish, cattle, goat, pigs), and other investment, such as mineral extraction

and purification, and animal feed production.

Panel Discussion

The seminar ended with a panel discussion, moderated by U Thuta Aung,

Managing Director of HamsaHub. U Saw Han Aye, Chairman of KSCCI, U Saw

Bo Bo, General Secretary 2 of Kayin Literature and Culture Association, Dr. Naw

Ka Paw Htoo, General Secretary of Karen National Union/Karen National

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Liberation Army’s Peace Council, and U Zaw Lin Aung, Managing Director, SME

Department of KBZ Bank, participated as panelists. They discussed investment

related to Kayin ethin groups, and also shared their perspectives on the ethnic and

cultural diversity of Kayin state. In addition, the moderator led the discussion on

how the Kayin State CCI could assist foreign investors who are interested to invest

in the area and explained the current business situation in Kayin State. KBZ then

outlined the activities and objectives of the banking sector, before a question and

answer session.

Business Matching and Site Visits

In the afternoon session, there was business matching in agriculture, food

processing, manufacturing, hotels and tourism, logistics, infrastructure,

construction, livestock and other sectors. After the business matching, participants

were taken on a study tour of Hpa-An Industrial Zone.

On 25 November 2017, participants were taken to popular tourists

destinations in Kayin State, such as Kyauk Ka Latt Pagoda and Bayin Nyi Cave.

During the trip, participants also had the opportunity to join a sightseeing tour

along the Than Lwin River by boat and enjoy the natural beauty of Kayin State.

To summarize, the Kayin State Investment Fair was co-organized by MIC,

Kayin State Government, and JICA. The main purpose was to promote investment

opportunities in the area and to connect local businesses to foreign investors. The

fair was attended by over 600 participants and included 22 booths with investment

potential and products.

********************

Kayin State Economy Overview

Kayin State Profile:

Location: Southern Myanmar

Shared borders: Mandalay Division and Shan State to the north

Kayah State and Thailand to the east

Bago Division and Mon State to the west

Area: 30,383 sq. km

Ethnicity: the area was previously known as Karen State, and is mainly inhabited by Karen

ethnicities, which are also known as Sagaw Karen, Pwo Karen, Bwe Karen, Paku Karen, and

other ethnicities, such as Mon, Shan, Burmese, and Pa-O.

Population: 1,504,079 (Myanmar National Population and Housing Census 2014)

Population density: 51. 8 persons per square kilometer, which ranks 10th in state population

density in Myanmar. For the population in urban and rural areas, the census results showed that

for every 100 persons, 78 persons lived in rural areas while 22 persons live in urban areas.

The Population Pyramid of Kayin State, 2014

Source: 2014 Myanmar Population and Housing Census

Geography

Kayin state is formed of 4 districts, 7 townships and 458 villages with 30,383 sq. km area of

land. The lowland areas, especially in the west, practice rice farming. In the east, many areas are

hilly and covered with forests, with people practicing upland farming. The rocky Dawna

Mountain range runs along the length of Kayin state in the east, and the southern and western

parts of Kayin state, particularly around Hpa-An area.

Air and Rail Transport

Kayin State lacks railway infrastructure. The main rail line is only linked to the closest town in

Mon State. The airport in Hpa-An and Pha-pun are rarely used for domestic and international

flights. However, the government plans to upgrade Hpa-An airport to receive flights from

Thailand.

Map of Kayin State by District and Township

Source: 2014 Myanmar Population and Housing Census

Kayin State Government

Name Position/Ministry

1. Daw Nann Khin Htwe

Myint

Chief Minister

2. Brigadier General Aung

Lwin

Ministry of Security and Border Affairs

3. U Than Naing Ministry of Finance and Municipalities

4. U Saw Myint Oo Ministry of Agriculture, Breeding and Irrigation

5. U Soe Hlaing Ministry of Environment, Forestry, and Mining

6. U Saw Pyi Thar Ministry of Transportation

7. Dr. Tin Win Kyaw Ministry of Social Affairs

8. U Tayza Htut Hlaing Htwe Ministry of National Race affairs (Burma)

9. U Min Tin Win Ministry of National Race Affairs (Mon)

10. U Khun Myo Tint Ministry of National Race Affairs (Pa O)

11. U Saw Chit Myit Lay Ministry of Legal Affairs

12. U Min Shwe Secretary of Kayin State

Potential for Investment and Trade

1. Tourism

The tourism business in Kayin State has been growing in the last couple of years and has high

potential for eco-tourism and community-based projects. The capital Hpa-An is five hours drive

from Yangon, with the tourist site Kyaikhteeyoe (or Golden Rock) on the way. Hpa-An is also

just three hours drive from Myawaddy.

Kayin State is part of the East-West Economic Corridor (EWEC), and is thus considered as an

important focal point for border trade and tourism between Thailand and Myanmar.

Investment in the hotel business of Kayin State, especially in the capital city of Hpa-An, has

been increasing. However, existing hotels are insufficient in providing services for tourism-

related activities. If accommodation and transportation in Kayin State are improved, community-

based activities, such as boat tours, hiking tours, bike tours, rock climbing, visits to traditional

villages, homestays, restaurants, and handicraft business are likely to grow.

Kayin State

Hpa-An District Myawaddy District Kawkareik District Hpapun District

1) Hpa-An Township

2) Hlaingbwe

Township

3) Hpapun Township

4) Thandaunggyi

1) Myawaddy

Township

1) Kawkareik

Township

2) Kyainseikgyi

1) Hpapun Township

2. Zwekabin Mountain Project

Zwekabin Mountain, which is 723 metres high, is one of the most attractive places in Kayin

State. To get to the top of the mountain, it takes two hours walk on a big stairway. However, the

top of the mountain offers an amazing view of the landscape of Kayin State.

To attract more tourists, the Zwekabin Myay Development Company and Chit Lin Myaing

Toyota Company signed an agreement on 12 January 2017 to invest 12 million USD in a cable

car on Zwekabin Mountain. Zwekabin Myay Development Company is owned by a Zwekabin

Temple monk, U Kawi Daza, and the Chit Lin Myaing Toyota Company is owned by Colonel

Saw Chi Thu.

3. Industrial Zones

Kayin State is located on the Thailand- Myanmar border. There are three designated industrial

zones in Kayin State, in Hpa-An, Myawaddy and the Three Pagodas Pass. Myawaddy Township

is well-known as the main Thai- Myanmar border crossing trade zone.

The Kayin State Government has a policy to develop Hpa-An Industrial Zone, and to invite

domestic and foreign investors to the industrial zone. However, the Kayin State Chamber of

Commerce and Industry reported that between 2010 – 2016 only two foreign firms expressed

interest to invest. Those two foreign firms from Thailand and Japan are engaged in a joint-

venture with local entrepreneurs to establish garment and wool enterprises.

3.1 Hpa-An Industrial Zone

Hpa-An Industrial Zone is located in the east of Hpa-An City, 7 miles from the capital city of

Kayin State. The project was established in 2011 by Thanlwin Ayar Company Limited to create

job opportunities for the local people.

The size of Hpa-An Industrial Zone is 969 acres and it is divided into 4 sections:

- Zone 1 consists of 59 plots (300 x 300 foot), 134.49 acres

- Zone 2 consists of 191 plots (300 x 300 foot), 470. 31 acres



Thus, the total number of plots in Hpa-An Industrial Zone amounts to 634 plots on 799.95 acres

of land.

Hpa-An Industrial Zone invites investment in agriculture, consumer goods, transportation, and

mining. The zone is complete and in operation, and aims to promote both domestic investment

and foreign direct investment (FDI). In order to attract investment, businessmen emphasize that

the industrial zone has to meet international standards by providing water supply, electricity, and

water treatment.

According to government data, there are now 40 registered factories in Hpa-An Industrial Zone

investing in the manufacture of soft drinks, garments, furniture, consumer goods, minerals, and

bicycles. However, only a few factories are operational.

3.2 Hpa-An Industrial Zone Power Supply

There is a 11 kV power cable from Hlaingbwe to Hpa-An, and the installation of a new 66 kV

power cable to increase energy supply to Hpa-An Industrial Zone. There are also nine 315 kVA

transformers installed to ensure adequate electricity supply.

4. Myawaddy Industrial Zone

The zone has a special purpose mechanism to manage its operations and has provided basic

infrastructure according to international standards. In order to promote trade along the Thai-

Myanmar border, the zone provides incentives in the form of a duty free zone (DFZ), whereby

investors do not have to pay import tax when they transport goods through, and store goods in

the DFZ. However, they will be charged sales tax upon the delivery of goods.

The zone is expected to be complete in 2017.

4.1 Logistics

Myawaddy Industrial Zone is located between Yangon and Bangkok. The major advantage of the

industrial zone is access to the Asian Highway, which means ease of transport for raw material

and goods between the industrial zone and ports for trading.

In the future, the Asian Highway, or the East-West Economic Corridor, will better connect

Myanmar to Thailand, and further on to Laos and Vietnam. It will serve as the main road that

passes through Hpa-An and Myawaddy.

4.2 Cross Border Trade in Myawaddy

Myawaddy plays a significant role in cross border trading with Thailand, in comparison to the

other three border trading zones in Tachilek, Kawthaung, and Myeik. According to the Ministry

of Commerce of Myanmar, the total volume of imports and exports increased by 174.393 million

USD from the 2015-2016 fiscal year to the 2016-2017 fiscal year.

Million USD

No.

Station

(1 Apr 2016 to 10 Mar 2017) (1 Apr 2015 to 10 Mar 2016) Increase/Decrease

Export Import Trade

Volume

Export Import Trade

volume

Export Import Trade

volume

1. Tachileik 13.349 58.623 71.972 9.302 57.096 66.398 4.047 1.527 5.574

2. Myawaddy 54.935 790.523 845.458 40.117 630.948 671.065 14.818 159.575 174.393

3. Kawthaung 59.671 58.004 117.675 41.039 79.547 120.586 18.632 -21.543 -2.991

4. Myeik 142.797 45.332 118.129 131.075 27.308 158.383 11.722 18.024 29.746

Source: Ministry of Commerce

5. Agricultural Products

Kayin State’s main agricultural products are forest products, rubber, betel, fruit trees, cardamom,

and coffee. Resources include tin, tungsten and timber. It is also hoped that minerals will be one

of the main products after the ceasefire agreement between the government and the Karen

National Union (KNU).

Government data indicates that most of the population of Kayin State relies on agricultural

products, with 75% of the population in the agricultural industry. Season fruits like durian,

avocado, cucumber, tomato, carrots and mangosteen are also available in Kyaukgyi area, Kayin

State.

5.1. Rubber

The government plans to produce rubber from 5,000 acres of land, with 2,500 acres of land now

ready to be harvested in the Thar Ma Nya area of Hpa-An.

5.2 Rice and Maize

According to a Special Report by the Food and Agriculture Organization of the United Nations

World Food Programme, during their crop and food security assessment mission to Myanmar in

2015, the paddy planted areas of Kayin State amount to 260,000 hectares, and the total

production is 962,000 tonnes. In addition, the maize planted areas in Kayin state, as of 2015, is

21,000 hectares and the total production is 95,000 tonnes.

5.3 Cardamom

Cardamom is the dominant cash crop in Thandaung region. An estimated 65-70% of farmers

grow cardamom, and it is estimated that each farmer owns 1 – 30 acres of land to grow

cardamom. So far, China, South Korea, and Japan have visited the cardamom growing areas, and

expressed interest in buying cardamom seeds.

5.4 Coffee

Coffee is another dominant crop in Thandaung region, where the climate and terrain are suitable

for coffee production. Due to the decline in coffee price, coffee production in Kayin State has

decreased. Nevertheless, there are two families producing roasted coffee for local distribution,

under the Thanduang Coffee Brand.

6. Hydropower Plants

6.1 Hutgyi Hydropower Project

The government plans to build the Hutgyi Dam to generate 1,360 MW, of which 90% will be

sold to EGAT and 10% used within Myanmar. The project is a joint venture between Sinohydro

(China), which holds 50.50%, EGATI, which holds 36. 50%, Department of Hydropower

Planning, Myanmar, holds 10%, and International Group Of Entrepreneurs Company, China,

holds 3 % of the stocks. The project is located on the southern Thanlwin River, Hpa-An, Kayin

State, and is currently pending further progress.

Local and Foreign Investment in Kayin State (2015-2017)

The following table lists the permitted enterprises in Kayin State by the Myanmar Investment

Commission (MIC).

No. Name Location Type of Investment Form of

Investment

MIC issue

date

1. Mahar Hpa-An

Production

Company

Limited

Kayin State,

Hpa-An

Township, Hpa-An

Industrial Zone

Manufacturing of

underwear on

Cutting Making

Packing (CMP)

basis

Myanmar

Citizens

Investment

28-10-2016

2. Nyi Naung Oo

Co., Ltd.

Outside Myawaddy

Reserve Area (201

acres), 7 miles from

Myawaddy

Township,

North of

Myawaddy-

Thinkan Nyinaung

Highway, Kayin

State

Transmission and

sale

of electricity to

Myawaddy

Economic

Zone and villages

inside the zone

Myanmar

Citizen

Investment

19-8-2016

3. Myanmar Ease

Net

Company

Limited

Yangon, Mandalay,

Naypyidaw

International

Airports

and Myawaddy,

Kawthaung, Htee

Khee,

Tachileik land

border

checkpoints

Online e-Visa

system

Myanmar

Citizens

Investment

19-8-2016

4. Fulltex Co., Ltd. Kayin State, Hpa-an

Township, Hpa-an

Industrial

Zone (1)

Manufacturing of

wweaters and

knitted wears on

CMP basis

Wholly

Foreign

Owned

Investment

18-5-2015

5. Nyi Naung Oo

Co.,

Ltd.

Area (201 acres),

North Asia

Road , near

Myawaddy

Border Trade Zone,

Myawaddy , Kayin

State.

Economic Zone Myanmar

Investment

20-3-2015

6. Snow Diamond

Co.,Ltd

No.(N-165), (0.42

Acre), Kyar In

Taung Block, Block

Hotel Myanmar

Investment

16-1-2015

No.1180), 9-

Quarter, Hpa-An

Township,

Kayin State.

Source: Directorate of Investment and Company Administration (DICA)

References:

http://www.kayinstate.gov.mm/%E1%80%85%E1%80%80%E1%80%BA%E1%80%99%E1%8

0%BE%E1%80%AF%E1%80%87%E1%80%AF%E1%80%94%E1%80%BA%E1%80%80%E

1%80%8F%E1%80%B9%E1%80%8D

Assessment of Business Opportunities in Kayin State by the Peace Nexus Foundation November

2013

http://reliefweb.int/sites/reliefweb.int/files/resources/Situation_Analysis_southeastern_Myanmar

_MIMU-PSF_Sep2016_low-res.pdf

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https://data.opendevelopmentmekong.net/dataset/3a41bd62-6df3-4a58-ad41-

b0bc669caf46/resource/57ab435f-8d53-48f3-a8bb-

8fed3793de3d/download/ReportMyanmarAgricultureEnvironmentAssementandRoadMapApr20

13.pdf

http://www.egati.co.th/en/investment/hutgyi-en.html

http://www.dealstreetasia.com/stories/myanmar-dealbook-nissan-to-invest-50m-and-get-10000-

units-assembled-annually-cable-car-project-at-zwekabin-mountain-to-use-12m-63421/

http://www.commerce.gov.mm/en/content/%E1%80%80%E1%80%AC%E1%80%9C%E1%80

%90%E1%80%B0-

%E1%80%94%E1%80%9A%E1%80%B9%E1%80%85%E1%80%81%E1%80%94%E1%80%

B9%E1%80%B8

http://www.kayinstate.gov.mm/%E1%80%85%E1%80%80%E1%80%BA%E1%80%99%E1%80%BE%E1%80%AF%E1%80%87%E1%80%AF%E1%80%94%E1%80%BA%E1%80%80%E1%80%8F%E1%80%B9%E1%80%8D



http://reliefweb.int/sites/reliefweb.int/files/resources/Situation_Analysis_southeastern_Myanmar_MIMU-PSF_Sep2016_low-res.pdf

http://reliefweb.int/sites/reliefweb.int/files/resources/Situation_Analysis_southeastern_Myanmar_MIMU-PSF_Sep2016_low-res.pdf

http://www.dica.gov.mm/en

https://data.opendevelopmentmekong.net/dataset/3a41bd62-6df3-4a58-ad41-b0bc669caf46/resource/57ab435f-8d53-48f3-a8bb-8fed3793de3d/download/ReportMyanmarAgricultureEnvironmentAssementandRoadMapApr2013.pdf




http://www.egati.co.th/en/investment/hutgyi-en.html

http://www.dealstreetasia.com/stories/myanmar-dealbook-nissan-to-invest-50m-and-get-10000-units-assembled-annually-cable-car-project-at-zwekabin-mountain-to-use-12m-63421/

http://www.dealstreetasia.com/stories/myanmar-dealbook-nissan-to-invest-50m-and-get-10000-units-assembled-annually-cable-car-project-at-zwekabin-mountain-to-use-12m-63421/

http://www.commerce.gov.mm/en/content/%E1%80%80%E1%80%AC%E1%80%9C%E1%80%90%E1%80%B0-%E1%80%94%E1%80%9A%E1%80%B9%E1%80%85%E1%80%81%E1%80%94%E1%80%B9%E1%80%B8




1 Business Opportunities in Kayin State – PeaceNexus Foundation

PeaceNexus Foundation

An asse ssmen t o f bus ine ss o ppo rtun it ies in

the Kayin state

Vriens & Partners

01 November 2013


Foreword

In the spring of 2013, PeaceNexus was approached by the Government of Myanmar via the

Myanmar Peace Center to support the Karen National Union (KNU) in the identification of

business opportunities that benefit the local population in the Kayin State. In the belief that

inclusive and responsible business can help consolidate the ongoing peace process, PeaceNexus

has offered its assistance to this endeavour. In a first phase, PeaceNexus has commissioned

Vriens & Partners to conduct a market research study to identify key actors, ongoing business

activities and recommendations about potential projects for other organisations to support in

key sectors and areas.

Disclaimer

This report is based on the research and analysis of Vriens & Partners. It is intended for

information purposes only.

About PeaceNexus

PeaceNexus is an independent private Swiss foundation whose mission is to promote integrated

solutions to peacebuilding challenges with emphasis on the interfaces between development,

democracy and security.


i. Introduction ............................................................................................................................................ 4

ii. Methodology ......................................................................................................................................... 4

iii. Terms and abbreviations ................................................................................................................. 5

I. Introduction to Kayin state ............................................................................................................... 7

II. Sectors..................................................................................................................................................... 9 a. Tourism ..................................................................................................................................... 9

Overview ................................................................................................................................... 9

b. Agriculture ..............................................................................................................................14

Overview .................................................................................................................................14

c. Manufacturing ........................................................................................................................17

Overview .................................................................................................................................17

d. Telecoms .................................................................................................................................20

Overview .................................................................................................................................20

III. Recommended projects ................................................................................................................ 22 Map of project sites ................................................................................................................23

Table of projects .....................................................................................................................24


i. Introduction

This report provides:

a general overview of Kayin state;

description of existing and planned business and development activities in Kayin state with a focus on Agriculture, Tourism, Telecoms, and Manufacturing sectors; and

a series of recommendations regarding the selection of 14 possible pilot projects in the sectors mentioned above, including potential partners and challenges in implementation.

ii. Methodology

In the spring of 2013, PeaceNexus was approached by the Government of Myanmar via the Myanmar Peace Center to support the Karen National Union (KNU) in the identification of business opportunities that benefit the local population in the Kayin State. In the belief that inclusive and responsible business can help consolidate the ongoing peace process, PeaceNexus has offered its assistance to this endeavour. In a first phase, PeaceNexus commissioned Vriens & Partners (V&P) to conduct a market research study to identify key actors, ongoing business activities and recommendations about potential projects for other organisations to support in key sectors and areas. V&P is a Southeast Asia-focused corporate advisory firm specializing in political risk analysis, government affairs and public policy headquartered in Singapore. V&P’s Myanmar team is comprised of country experts with extensive experience providing independent appraisals of the political risk associated with existing and potential investments and strategies for engaging local stakeholders and mitigating risk. Findings in this paper are based on desk research and interviews conducted by V&P with stakeholders and Key Informants in Yangon. Phase 1 of field research was conducted from Sept. 25 – Oct 3. in Kayin state and Thailand. A team of one foreign national and two Myanmar nationals travelled to Kayin state – specifically Pha-an, Hlaing Bwe, and Myawaddy – meeting with the Chief Minister and other government officials, Karen National Union (KNU) liaison officers, and representatives from private sector and civil society. In Maesok, Thailand, the team attended a workshop on the economic situation in Myanmar conducted by Myanmar Peace Support Initiative (MPSI) for the KNU. Phase 2 of field research subsequently included consultations in Yangon with key business members, INGOs and civil society representatives interspersed with three research trips to three different areas of Kayin state. A team of two Myanmar national researchers and one foreign staff member visited Pha-an and Mawlamyine between 15 – 18 Oct. to carry out additional research in the central Kayin/ northern Mon state area. Two Myanmar national researchers then visited the Thandaung area of northern Kayin state from 23 – 25 Oct. and one Myanmar national researcher visited Kyaukkyi – site of the Norwegian-funded Myanmar Peace Support Initiative (MPSI) pilot project – in eastern Bago Region from 25 – 28 Oct. This current report concludes Phase 2 of research and provides Recommended Projects (Section IV below) to inform next steps forward.


iii. Terms and abbreviations

ADB Asian Development Bank ADRA Adventist Development and Relief Agency AMRDP All Mon Region Democracy Party BG Border Guard BHN Basic Human Needs BPHWT Backpack Health Worker Team CBO Community-based Organisation CDA Community Development Association CEC Central Executive Committee CIDKP Centre for Internally-Displaced Karen People CSO Central Statistics Office CVT Centre for Vocational Training DKBA Democratic Karen Buddhist/Benevolent Army ETL Electronic Transactions Law ESIA Environmental and Social Impacts Assessments EWEC East-West Economic Corridor FIL Foreign Investment Law GSM Global System for Mobile ICRC International Committee of the Red Cross IDP Internally-displaced peoples IZ Industrial Zone JICA Japan International Cooperation Association KAC Karen Affairs Committee KBC Karen Baptist Convention KCBO/ KCBPSN Karen Community-based Organisations and Peace Support Network KDN Knowledge and Dedication Network KESAN Karen Environmental and Social Action Network KHRG Karen Human Rights Group KMA Khin Maung Aye Group of Companies KNLA Karen National Liberation Army KNU Karen National Union KORD Karen Office for Relief and Development KPF Karen Peace Force KPP Kayin People’s Party KPST Karen Peace Support Team KRC Karen Refugee Committee KSDDP Kayin State Democracy and Development Party KSEAG Karen State Education Assistance Group KWAG Karen Women’s Action Group KWO Karen Women’s Organisation KYDG Karen Youth Development Group KYO Karen Youth Organisation MCF Myanmar Computer Federation MCIT Ministry of Communications and Information Technology MFF Myanmar Fisheries Federation


MIC Myanmar Investment Commission MNPED Ministry of National Planning and Economic Development MOHA Ministry of Home Affairs MOHT Ministry of Hotels and Tourism MP Member of Parliament MPC Myanmar Peace Centre MPSI Myanmar Peace Support Initiative MPT Myanmar Posts and Telecoms MOAI Ministry of Agriculture and Irrigation MOLF Ministry of Livestock and Fisheries MOU Memorandum of Understanding NPA Norwegian People’s Aid NRC Norwegian Refugee Committee NSAG Non-state armed group PSDP Ploung-Sgaw Democracy Party SEZ Special Economic Zone SME Small Medium Enterprises SPDC State Peace and Development Council SRI System of Rice Intensification TBA Traditional Birth Attendants TBC The Border Consortium TNI Trans-national Institute UMH U Myint Htay Company UNFC United Nationalities Federal Council UNHCR United Nations High Commissioner for Refugees USDP Union Solidarity and Development Party VHV Village health volunteers Currency and measurements baht THB; Thai currency; USD 1 = approximately 30 baht (October 2013). kyat MMK; Myanmar currency; USD 1 = approximately 967 kyat (October 2013).1 viss Standard unit of weight measure in Myanmar; one viss equals 1.63 kg / 3.5lb.

Viss to Kilogram Conversion

1.00 Viss = 1.63293 Kilogram

Myanmar Kyat to US Dollar Conversion

967 Kyats = 1 USD

1 Note that this conversion reflects values as of late October 2013.


I. Introduction to Kayin state

Map 1: Kayin state Kayin state lies in the southeast of Myanmar, sharing most of its eastern border with Thailand. Inside Myanmar, it has common borders with Mandalay Region and Shan state to the north, with Kayah state lying to the north-east, and Mon state and Bago Region to the west. According to government data, the state’s total area is some 11,731 square miles – an area roughly the size of Belgium – with a population estimated at approximately 1.4 million. Rivers Kayin state and its adjacent regions are bisected by a network of rivers – the Bilin, the Yun Salin, the Thaung Yinn and the Gyaing – most of which empty into the Salawin river (see Map 2). The Salawin, which flows roughly from north to south before it empties into the Gulf of Martaban at Mawlamyaing, marks the northern part of Kayin state’s remote border with Thailand. The Thaung Yinn (or Moei) river marks much of the southern border with Thailand. Given the poor state of most roads in Kayin state, rivers remain a key source of trade and transport.

Topography The rugged Dawna mountain range spans the length of Kayin state in the east, along the border with Thailand. The southern and western parts of Kayin state, particularly around Pha-an, consist of flatter agricultural land, punctuated with karst limestone cliffs and columns. To the north, the land rises to the remote Pha-pun and Thandaung hills. Much of the landscape across the state is dramatic and presents immediate and obvious potential for sightseeing and tourism.


Map 2: Kayin state towns, rivers and roads Roads Kayin state’s two border crossings with Thailand are at Myawaddy (see 14, Map 2) and at Three Pagodas Pass, which connects to Sanklaburi in Thailand (21, Map 2.). The main transport route through the state is the Myanmar portion of the Asian Development Bank’s planned East-West Economic Corridor (EWEC), also referred to as the Asia Highway. The Asia Highway is intended to connect to Thailand and onward to Laos and Vietnam. In Kayin state, it is the main vehicle road that passes through Myawaddy – Pha-an –

Source: Asterism Travels and Tours Thaton from east-west (see 14 – 12 – 10 Map 2). Road quality currently, however, is extremely poor. Much of the stretch between Pha-an and Myawaddy (see 12 – 14, Map 2) is single-lane, and traffic direction is forced to flow on alternate days. ADB is currently beginning a project to upgrade this stretch as far as Kaw Kayeik (see 13, Map 2), while Thai construction companies have reportedly been contracted to upgrade the section between Kaw Kayeik and Myawaddy (see 13 – 14, Map 2). Industrial Zones There are three designated industrial zones in Kayin state, at Myawaddy (14), Pha-an (12) and at Three Pagodas Pass before the crossing to Sanklaburi in Thailand (21). While the Three Pagodas zone is in very early stages of development and has limited transport links, a small number of factories are already operating in the Pha-an zone, and basic infrastructure is currently under development in the Myawaddy zone and slated for completion by 2015 (see Manufacturing below). Air and rail transport Kayin state is underserved by rail infrastructure, with the main rail line linking only the main towns closer to the coast in Mon state – Belin (9), Thaton (10) and Mawlamyaing (17). There is a little-used airport in Pha-an and an airstrip in Pha-pun – currently for military use only. There are reported plans by the State government to upgrade Pha-an airport to receive flights from


Thailand – most likely not necessary, as the region is well-served by airports in nearby Mon state’s Mawlamyaing (17) — about an hour’s drive from Pha-an — and by Maesok airport on the Thai side of the border opposite Myawaddy (15), which has daily flights to Yangon and Mawlamyaing.

II. Sectors a. Tourism Overview Tourism in Kayin state appears to have strong potential for growth. There is demand from Myanmar-based tour operators for new tour locations in Myanmar, and Kayin state offers high potential for eco-tourism and community-based projects. Lack of access to some areas currently limits the areas foreign visitors can travel. Beyond the main road from Yangon – Pha-an – Myawaddy, foreign visitors have little ability to travel to other areas of the state. Travel restrictions apply on almost all other larger roads, including the Belin – Pha-pun road, the Myaing Kalay – Pha-pun road, the Pha-an – Hlaing Bwe road, and the roads to Baw Gali Gyi in the north or Kyainseikkyi in the south (see Map 2). A key challenge to growth in the sector is a lack of a clearly-defined vision for the development of tourism in Kayin state – a plan that everyone can agree on. Pha-an is identified as a target area for “cultural and creative tourism” in the 83-page Master Plan drafted by the Ministry of Hotels and Tourism in June 2013, but there is no clearly-defined path outlined for how this will be encouraged.2 There is a need for high-level policy discussions between multiple stakeholders in Kayin state regarding growth in the sector that is sustainable and beneficial to the local populations. The current informal policy set by the Ministry of Hotels and Tourism – which focuses on large hotels in hotel “zones” and requires, for the most part, registration of tour guides in Yangon – inhibits the growth of the sector in the short-term and may be detrimental to the way tourism develops in the long-term. There is also a clear need to respond in the short-term to the growing demands for tourism services. The Ministry of Hotels and Tourism does not currently track data for the number of tourists who visit Kayin state – although the Chief Minister of Kayin state noted the number of visitors has doubled in the last year. Pha-an The capital of Kayin state is only a five-hour drive from Yangon on a good road, which passes through popular tourist site of Kyaikhtiyo (“Golden Rock Pagoda”). It is also only one hour from Mawlamyaing, which has an airport operating daily flights to Maesok in Thailand. The road from Pha-an to Myawaddy on the Thai border currently takes five hours and traffic runs in different directions on alternate days – however, ADB is beginning to explore the potential of upgrading the road as far as Kaw Kayeik, which will shorten the trip considerably. This will be part of a planned extension of the East-West Economic Corridor (EWEC) into Myanmar, through a loan likely to be approved in late 2015. ADB is also planning to support women-led microenterprises

2 Ministry of Hotels and Tourism, Tourism Master Plan, June 2013, p. 24.


in response to increased tourism along Pha-an – Myawaddy corridor. Like the road upgrade, this is a long-term project in its very early stages. There is also a lack of international standard hotel rooms in Pha-an, where existing hotels are expensive and of poor quality. Some tour groups coming from Thailand bypass spending the night in Pha-an and instead continue on to Mawlamyaing or Kyaikto in Mon state, where a wider variety of quality hotels exists. While there are several new hotel projects currently underway in Pha-an, there remains currently a low market for tourism-related activities. This will change as more accommodations become available and transport improves.

Table 8: Hotels for foreign visitors in Kayin state

Area Hotel Stars Rooms

Myawaddy Myawaddy Hotel none 20

Pha-an

Tiger Hotel none 27

Grand Hill Hotel ** 30

Hotel Zwekabin *** 30

Parami Guest House none 30

Kan Thayar Guest House none 12

Golden Sky Guest House none 20

Soe Brother Guest House none 23

Thandaung Shwe Thandaung Hotel none 10

Zion Baptist Church Guest House none unknown

Total 10 hotels in Kayin state offering approx. 202 rooms

Once there is sufficient accomodations, community-based activities, such as boat tours, hiking tours, biking tours, rock climbing, visits to traditional villages, homestays, restaurants, and handicrafts will be able to grow – but there is a pressing need to develop a comprehensive integrated plan with multiple stakeholders to identify these activities and target areas and provide the necessary training to ensure benefits reach local populations. Travel companies also note that there is also a strong need for local Kayin-speaking guides. An obstacle, however, is that tour guide licenses must be registered in Yangon at the Ministry of Hotels and Tourism office. Although KNU companies Moe Ko San and Thoo Lei have coordinated with the Ministry of Hotels and Tourism to secure one training for about 30 prospective students – supported by local religious leader Taungkalay monk – there is still a need for ongoing and sustainable accreditation and training for Kayin guides. There is also potential to collaborate with existing vocational training providers, like the NRC, CVT and ADRA. Key developments in Pha-an area:

New hotels, including a 150-room hotel and convention centre planned by UMH Company. Mya Htay Kwal Linn is building one hotel on the Salween River and Thoo Lei has acquired two plots for hotels. The current owner of Parami Hotel and one of the Board of Directors of the new Kayin State Development Public Company, is also building Parami Hotel II close to Pha-an Bus terminal.

Members of the Kayin State Chamber of Commerce are looking for international partners to supply capital to build hotels. According to information learned at a group meeting in Pha-an, no one has found any partners yet.


One Yangon-based tours company – Khiri Travel – has begun operating kayaking tours between two of the popular caves outside Pha-an. The kayak tour focuses on training local staff and job creation. This simple model could easily be replicated in other adventure travel sectors (biking, climbing and hiking).

Some villagers from Eindu area – especially a Pa-O ethnicity village near Pha-an on the main road to Myawaddy – are taking government loans to support traditional weaving. While there is a small number of locally-made handicrafts and restaurants catering to foreigners open, more tourists need to visit Pha-an to generate enough sales potential to incentivize locals to develop these types of activities.

A 30-member committee has been formed by three monks to manage a project for a cable car up Zwekabin mountain, just outside Pha-an. A land survey by Yangon-based Sun Company has already been carried out and soil tests will begin soon – so far all funded through public donations. One of the monks introduced a Malaysian company, which can assemble cable cars, but there is no contract or agreement yet. KNLA’s Major Htoo Htoo Lay has suggested the committee work with a Swiss company to supply the cable cars. KNU Chairman General Mutu Say Poe has also made personal donations for the initial surveys. It is not clear yet if the project – estimated at USD 20 million by the Malaysian company – will be funded by public donations or by forming a public company from the 30-member committee. Many stakeholders mentioned that the project could become a symbol of peace in the region and it is being publicised as such in Burmese-language billboards and advertising. Given that Zwekabin is a popular destination for Buddhist pilgrimage, the site is likely to be a bigger pull for Myanmar visitors to Pha-an than foreign visitors – at least in the short-term.

Myawaddy According to figures provided by the Ministry of Home Affairs, there are approximately 2,000 tourists entering Myanmar per month though the newly-opened Myawaddy border crossing – at which foreign tourists can enter on a 28-day visa. There remains only limited transport through Kayin state by long-distance bus companies, however the buses are used primarily by local people and seat capacity for tourists is therefore limited. Khiri Travels, based in Yangon, has just begun offering tours from Sukhothai in Thailand to Yangon overland, but is one of the first movers to do so.

Table 9: Buses available in Kayin state

Route Company Round trips per day

Myawaddy – Kaw Kayeik – Pha-an - Yangon

Myat Eaindray n/a

Myat Thisar 0.5

Pyae Arr Man 2

Pa-an – Yangon

Shwe Nadi 1

Shwe Zin Setkyar 2

Zwe Man Hein n/a

Pwint Thisa Yadanar 1.5

Shwe Myanmar 3

Shwe Nat Taung 1

Shwe Par Si n/a

Thar Ma Nya n/a

Pa-an – Mawlamyaing Shwe Nadi 1

Shwe Zin Setkyar 2


Zwe Man Hein n/a

Pa-an – Nay Pyi Taw Taw Win n/a

Total 14

*Average seats per bus 25 - 30 Est. daily capacity 350

Key developments in Myawaddy area:

Kayin state government plans to develop a hotel zone in the northern part of Myawaddy township – about 20 minutes outside the town, with cooperation between the State government and the Ministry of Hotel and Tourism, according to an officer from the Ministry of Hotels and Tourism in Myawaddy. New hotels in Myawaddy, however, are more likely to serve business and trade than tourism – given the proximity to Maesok in Thailand, where there is adequate and well-priced accommodations already available.

Moe Ko San company – registered by KNU’s 7th Brigade and with an office in Myawaddy – is planning activities in tourism, as well as trading. Permission has been sought and granted by the Union-level Minister for Hotels and Tourism to provide about 30 students with a training program to qualify as local Kayin state tour guides. Moe Ko San is also interested in developing a hotel and rest stop site on an 80-acre plot of land 5 miles outside Myawaddy. The Chief Minister has granted permission for the project, but permission from the Central Body for Vacant Lands Management is still pending.

Thoo Lei Travels and Tours – with offices in Myawaddy, Pha-an and Yangon – wants to partner with Myanmar travel companies to link up to existing tourist networks serving Bagan and Inle. Current ideas include building hotels in Pha-an and developing a bus tours line from Myawaddy to Pha-an.

Kyaukkyi Kyaukkyi has strong potential as a base for trekking tours – with the strong caveat that more remote hill areas around Kyaukkyi remain landmined. There are sites that can be visited outside of mined areas, such as a waterfall within an easy day’s trip from Kyaukkyi, but there will need to be a comprehensive demining of the area before any more extensive trekking tours are possible. There are currently no hotels in Kyaukkyi for foreign visitors and Kyaukkyi is a restricted area that is off-limits to foreigners. The nearest guesthouses are in Nyaunglebin, two and a half hours away, but these accomodations are of poor quality and it is not clear whether foreigners require advance permission to stay there. Key developments in the Kyaukkyi area:

The Sah Ler village and waterfall is a 20-30 minute drive from Kyaukkyi town, followed by an hour and a half hike. As a remote beauty spot, it has potential to draw foreign visitors.

It is key to begin first with local KNU Kyaukkyi Township leaders in any discussions about developing tourism in this area. They have already organized an economic committee to develop a resort and tourist site in this area, but have rejected potential partners because they do not come to discuss with them first. Involving all levels of local leadership and local communities will strengthen peace and build on new opportunities created by the ceasefire.


Thandaung Thandaung and Thandaunggyi – a former British hill station – have great natural beauty and strong potential for trekking adventure tours and eco-tourism – provided all concerned stakeholders can agree to develop tourism for foreign visitors in this restricted area. If this agreement can be reached, there will be a need to develop accommodations in the area, as there is currently only one hotel operating in the Thandaung area – Shwe Thandaung – and it closes during the monsoon season. Another guest house is run by the Zion Baptist Church in Thandaunggyi – but foreigners attempting to stay there have been turned back, despite the area being officially “open” to tourists.3 Thandaung also presents opprtunities to link to national transport networks, being located close to the new capital and airport at Nay Pyi Taw – about two hours by road – and about five hours by road from Yangon. The national railway – in need of upgrading – also serves Taungoo. Starting from the late 1990s and into the early 2000s, former Prime Minister General Khin Nyunt encouraged local business firms to develop Thandaung as a mountain resort. Large Myanmar conglomerates – including Htoo Group of Companies, Asia World, and KMA Group of Companies – invested in hotel projects there. However, most of the projects – except for the KMA Hotel – stopped when the 2004 – 2005 KNU ceasefire broke down. This shows how important it is for any projects implemented to actually strengthen the ceasefire, rather than simply take advantage of the temporary lull in fighting to get a project off the ground. Ensuring that local communities and other local stakeholders are involved in tourism development, not just leaders and large domestic companies, is vital to strengthen peace and contribute to sustainable tourism development. Key developments in the Thandaung area:

KMA Group of Companies owns Shwe Thandaung Resort in new Thandaung on the Pathi Creek, a well-known local beauty spot near the 13 mile checkpoint, popular with locals in nearby Taungoo. While the hotel is closed during the monsoon season, the group also owns the four-starred Royal Kaytumadi Hotel in Taungoo.

Regarding tourist sites, there is a hot springs, beautiful creek and waterfall near 13 mile, a former hill station and tea plantations at Thandaunggyi and a well-known Naw Mu Baw mountain, which has a Christian church and meditation site at the summit.

Currently, there are no hotels or privately owned guesthouses in Thandaunggyi, and visitors can only stay at the Zion Church guesthouse.

3 Long, D., “Thandaung opening up? Not quite yet” Myanmar Times, 22 September 2013.


b. Agriculture Overview Government data indicates that agriculture remains the mainstay for most of the population in Kayin state. In KNU-controlled areas, where government figures are not available, the KNU Central Liaison Officer Saw Shee Sho estimates that some 75% of the population rely on agriculture and/or animal husbandry. According to Chief Minister Zaw Min, there are 200,000 acres of rubber under cultivation in Kayin state – including 80,000 ready to be harvested – and 8,000 acres of sugarcane. Both the Union-level Ministry of Agriculture and Irrigation (MOAI), and the Kayin state Chief Minister encourage value-added processing, especially of sugar in Hlaing Bwe township – where there is a no-longer-operational sugar factory owned by Mya Htay Kywe Linn company. In Kyainseikkyi, there are more than 90,000 acres of rubber under cultivation. In 2012, MOAI started providing loans of MMK 100,000 (approximately USD 96) for each new acre of sugarcane cultivated. It is likely that investments in horticulture – vegetables, fruits, tea, coffee, spices, and other cash crops – could be directly linked to investments in cottage-industry manufacturing, such as dried fruits, jams, and juices. These projects would focus on market-based livelihoods development support in the short-term, with the aim of linking these initiatives to trade-focused commercial projects in the medium and long-term. These investments would likely be more development-orientated in the short-term, rather than an investment sector with attractive returns in the near future. Below is a breakdown of the crop productivity and existing activities by area. Pha-an

Most predominant crops in the area are rubber and sugarcane.

In the Thar-ma-nya area of Pha-an, there is a Rubber Farmers and Producers Association, which was founded six month ago with 227 members. Members farm 5,000 acres of rubber, of which 2,500 acres are currently ready to be harvested. Each of the farmers own from 5 to about 150 acres of rubber field.

Chief Minister of Kayin state Zaw Min is in discussions with the Mekong Institute regarding a proposed 2,000 acre corn plantation project by Thai companies in Pha-an.

In late 2013, Norway Refugee Council (NRC) will begin an in-village, five-day food-processing pilot course for 50 youth in three village tracts in Hlaing Bwe township to process mangos, limes, vegetables into juice, jam, dried goods.

Myawaddy

Corn is one the main products of the area.

Implementing Partners – a group of international investors many of whom are former United Nations Development Program (UNDP) colleagues – have permission from Union-level and State government to develop a dairy farm on 10 acres south of Myawaddy. The project is delayed at the moment by lack of investment capital – only half of the required USD 1.5 million has been secured so far.


Kyaukkyi

Most predominant crop in the area is rice, although most villagers are daily labourers, rather than landowners. Villagers in the mountainous regions practice hill field paddy cultivation, but production has been severely hampered for more than a decade as a result of conflict. There are strong rice-producing regions upland from the MPSI Kyaukkyi pilot project area where production remains hampered.

Seasonal fruits, like durian, betelnut, avocado, cucumber, tomato, carrots and mangosteen are readily available, meaning local market prices are very cheap. Small-scale fishery activities for subsistence are also very common in the riverine environment.

CIDKP is planning to support villagers’ agricultural livelihoods with technical inputs and capacity-building, and provide assistance for peacebuilding efforts in four IDP village areas from September 2013 to August 2014. Current partners are MPSI, NPA, KDN and KORD, KYDG and a department of KBC that works on social services development. Animal husbandry – chickens, pigs and ducks – may be supported by CIDKP, depending on needs-assessment to be carried out.

Faith-based NGO Partners Relief and Development are beginning to pilot a System of Rice Intensification (SRI) in Kyaukkyi area through trainings for farmers, but this is still at a very early stage.

East Lives, a small 5 – 6 person community-based organisation based in Kyaukkyi, is assisting with the development of a Farmers’ Association in Kyaukkyi, which is not yet registered. The association was established with the support of the ’88 Students Generation movement, and now they plan to initiate dialogue with the ILO for interest-free farmers’ loans.

Thandaung

Thandaung produces a range of seasonal fruits such as durian, mangosteen, lychees, bamboo shoots and grapefruit. Seasonal fruits are mainly grown in the remote areas around Baw Gali Gyi – 45 miles from Taungoo. According to Saw True Blood, one of the founders of the KPP, transportation is a major challenge for farmers’ products to reach the market. For this reason, some villagers can only sell small amounts of fruit and have to process the remaining fruit into jam.

Cardamom is the most predominant cash crop. According to local producers, about 65 – 70 % of farmers in the Thandaung region grow cardamom. Each farmer owns about 1 to 30 acres per family. Currently, China is the only market for cardamom seeds and recently, traders from South Korea and Japan have visited and shown interest in buying cardamom from Thandaung. Local price for cardamom was previously MMK 10,000 (approx. USD 10.34) per viss – or about USD 6.38 per kilogram. In 2013, the price doubled to MMK 20,000 (approx. USD 20.68) per viss – or about USD 12.78 per kilogram.

Cardamom taxation creates market distortions for farmers in Thandaung. There is a cardamom trading centre at the 4-mile checkpoint before Taungoo and restrictions prevent carrying or storing cardamom without permission, which means farmers cannot sell to market freely or keep cardamom for a better price. Cardamom is also categorized as a forest product, which is subject to 25% tax payable to Ministry of Forestry. In addition to that, local traders in Thandaung region have to pay tax to KNU 2nd Brigade – at a rate of 12.5% of local prices – and apply to KNU 2nd Brigade for trading permissions.


Coffee remains a major crop of Thandaung, where the climate and terrain are suitable for its production. In comparison to cardamom, coffee plantation acreage is declining because coffee prices, compared to cardamom, are very low. The price for coffee is MMK 2000 (approx. USD 2.06) per viss4 – or about USD 1.27 per kilogram – while cardamom can get up to K 20,000 (approx. USD 20.68) per viss – or about USD 12.76 per kilogram.

There are two families in the region producing roasted coffee powder and distributing locally, including the well-known “Thandaung Coffee” brand.

Tea is a long-standing major product of Thandaung. Thandaung used to produce very good quality green tea, but tea quality and productivity has been declining since 1995 when the military took over 550 acres of tea plantation fields – of which only 220 acres is still producing tea. A small tea factory in Thandaunggyi now produces black tea for the army.

There are strong concerns among local populations that Thandaung region will become a mono-cropping area with a single market – China. In response to this concern, there exists local buy-in and support for projects that would diversify crop production to fruits, tea and coffee.

4 Burmese unit of measurement equivalent to approx. 1.62 kg.


c. Manufacturing Overview Kayin state suffers from the same – if not worse – infrastructural problems as much of the rest of Myanmar: a lack of electricity and serviceable roads to transport goods from remote areas to markets. While the roads linking Pha-an, Yangon and Mawlamyaing (in Mon state) are all in good repair, road links to Myawaddy on the Thai border are only now entering the first stages of being upgraded with funding from the Asian Development Bank (ADB), (see Map 2). As for power, while it remains very limited at the moment, there is potential for future improvement, thanks to a recently-announced ADB upgrade of a power facility in nearby Mon state at Thaton5 and the upgrading of a natural gas turbine plant (slated for completion in 2015 by local Myanmar company IPP6 in Mawlamyaing, the nearest seaport to Pha-an and the largest city in the south-east Myanmar. According to Colonel Aung Lwin, Kayin state Minister for Border Affairs and Security, the Mawlamyaing plant will provide 180 MW to Mon and Kayin states once completed. Many Key Informants suggested that the type of manufacturing that might benefit conflict-affected communities would be small-scale processing and/or cottage industries. Informants pointed to potential in agricultural products processing, woods processing, and handicrafts or other goods for the tourism industry. All manufacturing facilities in Kayin state – whether cottage industry or large-scale industrial factory – must be registered with the Ministry of Home Affairs (MOHA). Illustrating that there exists potential to develop small-scale processing, the official figures indicate that there are 930 total private processing facilities in Kayin state. This figure – which includes cottage industries operating without power – includes 575 facilities in Pa-an, 188 in Kaw Kayeik, 154 in Myawaddy and 13 in Pha-pun. A network of small-scale basic rural facilities could be linked to a larger processing facility at one of the industrial zones in Kayin state still under development. A key challenge will be identifying networks of rural communities with existing basic processing capability, which will require high-level buy-in and cooperation with multiple stakeholders. If this is done with due diligence and sensitivity to conflict, this has the potential to integrate previously isolated markets. Pha-an A subsidiary of Myanmar media conglomerate Shwe Than Lwin – Thanlwin Ayar – is developing infrastructure at the Pha-an Industrial Zone (IZ). Established in December 2011 to create job opportunities for local people in their own region, the 973-acre zone is located 7 miles outside of Hpa-an on the road to Myaing Gyi Ngu, former DKBA headquarters. It consists of four major compartments – areas for foreign investment (177 acres), ares for Myanmar business firms (585 acres), areas for local entrepreneurs from Kayin state (112 acres), and a special zone for people from Myaing Gyi Ngu (99 acres). There is an 11KW power cable supplying the Pha-an Industrial Zone but, at the moment, it only provides power to one factory – UMH’s garment factory. Thanlwin Ayar plans to install an

5 World Bank. Turning lights on in Myanmar. 24 September 2013.

6 New Light of Myanmar, 6 July 2013.


additional 66KW cable soon, but the project is currently delayed by environmental and social impacts assessments. Beyond this, the State government plans to increase current from the national grid to 220KW and to extend the national grid from Kaw Kayeik to Myawaddy by 2015. According to government data, there are 40 registered factories in the Pa-an Industrial Zone (IZ) for manufacturing soft drinks, garments, furniture, consumer goods, minerals and bicycles, although the number of factories actually operating in the Pha-an IZ is likely lower. Key developments in the Pha-an area:

Saw Than Mya, Managing Director of Mya Htay Kywe Linn company, operates the Mya Linn furniture factory in the Pha-an IZ. There is a large supply of timber and bamboo in the area.

Mya Htay Kywe Linn owns a defunct sugar-processing factory on the Salween River in Myaing Gyi Ngu, about two hours by poor road from Pha-an. Given lack of power and not enough raw material in the immediate area, the factory is likely not viable, but there may be potential in the future for sugar-processing at the Pha-an zone itself.

NRC are running livelihoods training centre in Pha-an, which focuses on garment making for women from conflict-affected areas of Kayin state with high internally-displaced populations.

Myawaddy The Myawaddy Industrial Zone presents attractive potential for foreign and domestic investors, albeit on a more long-term basis. The new zone is situated on the border with Thailand – which supplies electricity from the Thai national grid – across the bridge from Maesok in Thailand’s Tak Province. Key Informants mentioned there is potential to build on high-level discussions taking place on a government-to-government basis between Thailand and Myanmar for a cross-border Special Economic Zone (SEZ), utilizing Thailand’s infrastructure with goods produced tax-free and cheap labour from Myawaddy. Myawaddy IZ is still under construction and developing infrastucture for sewage, water and electricity. Nyi Naung Oo Company has a contract with State government to develop the zone and will have the right to sell the plots. They plan to finish development in early 2015. No plots have been sold yet. Key developments in the Myawaddy area:

Moe Ko San has expressed its intent to purchase two plots to produce garments and roofing materials and has already submitted its request to state government.

Japanese companies – glassware, food and beverages, garments – have come to look at IZ but have yet to invest.

The Thai Cabinet approved budget for the development of an industrial zone on the Thai side opposite Myawaddy in early 2013, as part of the development of the ASEAN East-West corridor.

Since 2012, there has been high-level discussion within Myanmar’s Ministry of Construction for a second bridge linking Maesok to Myawaddy – near the Myawaddy and Maesok IZs. Assuming regulatory issues could be managed government-to-government, Japan is particularly interested in export through Thailand because it would cut transport to Japan from 25 days (out of Yangon) to three days (from Bangkok).


Kyaukkyi

Kyaukkyi is connected to the national grid and villagers say that their electricity supply is relatively strong, because the Lawpita waterfall in Kayah state is nearby.

East Lives – small 5 – 6 person CBO based in Kyaukkyi run by local female entrepreneur – is supporting small-scale processing of traditional soaps and shampoos in 50 villages around Kyaukkyi, with funds from KDN and Meitta Foundation and some training support from KBC. In 2012, East Lives conducted peacebuilding, environment, human rights and home industry training. Products have low chemical content and are sold locally for cheap price in Kyaukkyi market.

In one village of 84 households near Kyaukkyi, an estimated two-thirds of the village are doing small-scale bamboo processing, to make traditional bamboo hats. There is a plentiful supply of bamboo in the area.

Thandaung

New hydropower project at Thauk Ye Khat dam near Tantabin will add 140 MW to the national grid when it becomes fully operational. It is managed by Gold Energy Company, which is a subsidiary of large Myanmar conglomerate Asia World Company. Human rights groups have protested about this dam site.

After 140MW is added to the national grid, the national grid is planned to be extended from Taungoo to Baw Gali Gyi (45 miles from Taungoo), an area still restricted for foreigners. This is being done at the request of local people in the area – with the support of KPP Members of Parliament – who complain that their land has been flooded by the dam and they receive none of the power supply and electricity that it generates. This is a positive step towards connecting remote areas to the power grid.

Small food processing enterprise near Thandaung has been operating since 2008 with seven workers, who have training in food processing and wine making. They produce juice and jam from grapes and lychees, and now, traditional shampoo. They currently produce 1000 bottles of grape juice annually and plan to increase production up to 5000 bottles in 2015. Total production cost of a bottle of grace juice is about MMK 1000, and the sale price is MMK 1200 per bottle, distributed through the network of Karen People Community. Apart from grapes which come from Yamethin, all other inputs are sourced locally. They are also interested in turning an old chopstick factory nearby his house into a canning factory for lychees and bamboo shoots for both domestic and foreign markets, but lack capital to expand the business, as well as technical skills for canning, packing and processing to keep the products longer.

Company based in Shwepyithar Industrial Zone in Yangon is interested to provide technical support for processing, distributing, packaging or exporting products from Kayin state.

There are two very small-scale roasted coffee producing places in Thandaung region, selling to the domestic market. One is the well-known “Thandaung Coffee” brand in new Thandaung (near the 13th mile stop), and the other is small-scale family processing.

Small government military-owned tea factory in Thandaunggyi – using raw materials from the 220 acres still under cultivation – produces black tea for the army.


d. Telecoms

Overview Cell phone coverage in Kayin state remains limited only to urban or peri-urban areas. Even in the capital Pha-an, cell phone signal is often lost within a ten-minute drive outside the town. In remoter areas of Kayin state, GSM connection is limited to elevated areas immediately proximate to a tower. Landlines remain the main telecommunications channel in the region and, in the most remote part of Kayin state – north of Pha-pun – communications is by satellite only and used almost exclusively by the KNLA. According to data provided by the Ministry of Home Affairs, of the total population of approximately 1.4 million (see page 3), an estimated 66,000 – or 4.7% - have access to some form of telecommunications. In terms of geographic area, cell phone coverage stands at a mere 0.04% in Kayin state. Background The recent liberalization and expansion of telecoms throughout Myanmar is a State-led, centrally-driven presidential objective. Motivated by the possibility of providing ‘quick wins’ to the masses in order to secure his legacy – and potentially also secure votes in the 2015 elections – President Thein Sein has overhauled the sector, removing the previous monopoly held by Myanmar Posts and Telecommunications (MPT), the state-owned enterprise under the Ministry of Communications and Information Technology (MCIT). While two foreign operators (Norway’s Telenor and Qatar’s Ooredoo) have been awarded tenders, as of October 2013, they are still negotiating the terms of their licenses with Nay Pyi Taw. A large part of their ongoing discussions is likely centered on expansion of the network to the rural, remote, and post-conflict areas. At this stage, it appears that firms will focus on central urban and government-controlled areas first, before expanding to more rural government-controlled areas, and eventually to conflict-affected or non-state controlled areas. It is unclear, however, how expansion will be managed in conflict areas. There is no doubt that the indirect benefits to the economy are enormous. Given that building towers is a highly specialized technical process, it is unlikely that local interests will have direct gains from the expansion. That being said, secondary businesses along the value chain have the potential to capture incomes, for example, local logistical companies, security firms, and wage labourers. Prior to the recent liberalization of the sector by the President’s Office, MPT had contracted Shwe Than Lwin – a domestic Myanmar media conglomerate – to build telephone towers in Mon and Kayin states. This was part of the ‘30 Million Mobile Project’ kicked off in 2011 to increase mobile capacity. MPT provided the design and model for the tower and base station, while Shwe Than Lwin invested and was granted the license to serve as the local service provider for those regions. Looking forward There is clear potential for projects with the operators, vendors and telecom tower construction sub-contractors once the allocation of responsibilities is clearer in Kayin state. It is necessary to


establish and maintain an ongoing dialogue with these telecoms players, as plans for the state continue to crystallise. In local communities – and within the KNU – there is also strong support to improve telecommunications access for rural communities. Local civil society and human rights groups say it will dramatically improve information-gathering and emergency response. For this reason, once a network is in place, there will be a lot of scope for rights-based community networks, information-sharing or communications development projects, potentially also tied to nascent local ethnic media or radio services. Key developments:

In March 2013, Shwe Than Lwin finished building a number of stations and towers. There are now a total of 31 Base Transmitting Stations (BTS) in Kayin state:

o Three WCDMA towers of 2,000 capacity o 28 GSM stations with 3,000-subscriber capacity in Pha-an, Kaw Kayeik,

Myawaddy, Three Pagodas pass, Hlaing Bwe, Kyainseikkyi and Myaing Gyi Ngu. o Fibre-optic CDMA connection – of variable capacity – in Thandaung, Myaing Gyi

Ngu, Hlaing Bwe, Zwekabin, Pha-an, Kyainseikkyi, Kaw Kayeik and Myawaddy.

There is also a GSM tower in Kyaukkyi, which falls within Bago Region – rather than Kayin state – and so was not included in the figures provided by the MPT Manager for Kayin state. The tower in Kyaukkyi provides a strong service to cell phone users in the area.

Two new telecom tower sites have been marked off on a remote 70-mile stretch of road between Pha-pun – Kamamaung, according to the Karen Human Rights Group. It is not clear who marked the area – although likely it was done by MPT, as foreign firms have not yet enunciated plans for Kayin state.

MPT has made a request to KNU 2nd Brigade for three locations for GSM towers in the Thandaung area just two months ago in August 2013. No information about where the sites will be has been released yet.

There is strong interest among local communities to develop local-based radio stations – particularly in Thandaung, where connection to other regional FM stations is limited. This kind of project – while not directly linked to telecommunications specifically – would support the development of a stronger communications network in rural areas of Kayin and presents strong income generation potential for community and municipal funds from advertising.

KNU Economic Committee is very interested in how telecoms will benefit local communities but does not have any developed ideas or policies yet. There is also no KNU department that deals with telecommunications or technology generally. The most relevant KNU department may likely be the Department of Information.

A new program may be initiated in October or November 2013 by a Japanese NGO consortium called Japan Platform on Telecoms for Basic Human Needs (BHN). The proposal has already been submitted to the government to support the installation of address systems, solar battery systems, and local skills-training for installment and maintenance.


III. Recommended projects

In the section below, 14 recommended projects are presented that could be implemented in Kayin state or areas where KNU has a presence. These are grouped by sector – Tourism, Agriculture, Manufacturing and Telecoms – and marked as belonging to one or more of the following categories: Business, Livelihoods or Policy. Business projects are considered to have greater prospects for short-term investment returns, while the Livelihoods category includes mostly market-based development projects with strong social investment returns in the short-term. Projects categorized as ‘Policy’ support or facilitate some aspect of KNU and government dialogue on broader policy direction. Stakeholders repeatedly noted the importance of integrating different types of administrative areas – which have long been riven by conflict – into a common supply chain. It was suggested that fostering greater economic reliance between communities – previously unable to interact – may have the strongest impact on demonstrating peace dividends. In contrast, a project which focuses only on business in KNU or in government controlled areas may further entrench pre-existing divisions and fail to demonstrate dividends from the peace process. For this reason, most of the projects below focus on connecting community groups across the different types of administrative areas – from KNU-control to mixed-administration to government-control. Where a project is considered to be weak on this aspect, it is specifically flagged below.


Map of project sites

Original source: Myanmar Information Management Unit (MIMU)


Table of projects

Tourism

Project Possible partner(s) Activity Category

1 Comprehensive Support to the Development of Sustainable and Community Based Tourism in Kayin State Site: Pha-an; Kyaukkyi; Thandaung; Myawaddy Opportunities: Fostering cooperation and buy-in from a wide variety of actors, Pha-an identified in the Tourism Master Plan as a site with enormous potential for tourism development – especially for cultural tourism – but no clear plan has been enunciated. Challenges: Large areas of restricted access, landmined access roads and paths in upland areas, need for comprehensive vocational training efforts

Kayin state government KNU Central Executive

Committee KNU companies – Thoo Lei and

Moe Ko San KNU’s Thoo Lei Foundation KNU Brigade and local KNU

Township leaders Government of neighboring

States including Mon, Kayah, Bago Region

Union Ministry of Hotels and Tourism and Ministry of Forestry

Myanmar Peace Centre (MPC) CSOs – from Yangon, Pha-an and

Thailand Donors and INGOs already in

Kayin – especially those working on mine risk and vocational training (ADB, ILO, NPA and NRC)

Hans Seidel Foundation – assisted MOHT to write Tourism Master Plan in June 2013

Travel agencies – especially those already in Kayin (Khiri Travel, Asia Holidays)

Phase 1 (3 – 6 months): Secure buy-in for cooperation. This is a long term and comprehensive endeavour that PN cannot undertake on its own. It requires high-level agreement with KNU and close cooperation with multiple NGO stakeholders to avoid overlap with others’ projects.

Policy; Business; Livelihoods

Phase 2 (3 – 6 months): Develop a plan and work streams that include:

location of hotels, identification of sites of interests and potential

leisure activities, support to the growth of local handicrafts

including weaving, a promotion campaign for the State, a dialogue with tour operators so they are

convinced to send some travelers there

Phase 3 (6 – 12 months): Lobby Ministry of Hotels and Tourism – with assistance from Myanmar Peace Centre (MPC) if necessary – for policy changes required to facilitate the agreed framework for tourism development, particular around hotel zoning policy and restrictions on homestays in remote areas for tourists

2 Tourism vocational training school Site: Pha-an

Ministry of Hotels and Tourism – for official guide accreditation

KNU tour companies Thoo Lei and Moe Ko San – already

Phase 1 (3 – 6 months): Open dialogue with key donors and INGOs – particularly ILO and ADB

Livelihoods; Policy

Phase 2 (3 months): Lobby Ministry of Hotels and Tourism for guide


Opportunities: Youth employment, support growing tourism sector, rehabilitation of soldiers as guides in remote areas, tour access to previously restricted areas Challenges: Guide accreditation still required to come from Ministry of Hotels and Tourism’s Yangon office, overlapping vocational training programs planned in Kayin, securing buy-in and cooperation from KNU and civil society stakeholders

secured one training from MOHT for accreditation of 30 guides

KNU’s Thoo Lei Foundation ILO – touted as likely recipient of

USD 18 million fund from Swiss government to build vocational training programs in Kayin

ADB – support for women’s livelihoods in the East-West Economic Corridor (EWEC)

ADRA – planning vocational training programme in partnership with government technical high school and college

Centre for Vocational Training (CVT) – based in Yangon, providing hospital training

The Border Consortium (TBC) – currently carrying out Small Business Training for handicrafts stores/restaurants in refugee camps

Civil society especially KYO, KWO, KAC, KWAG, and KYDG

accreditation to be awarded in Kayin state, rather than in Yangon

Phase 3 (3 – 6 months): Develop curriculum and programmes in partnership with CVT, TBC and ADRA for:

tour guides in urban areas of Kayin, rural tour guides (linked to trekking, kayaking

tours linked to 4 below), Small Business Training for restaurants and

shops in targeted areas for adventure tourism Service staff for hotels and restaurants

Phase 4 (3 – 6 months): Work with local civil society to identify students and ensure broadly drawn from areas of government-control, KNU control and mixed areas.

Phase 5 (6 – 12 months): Develop internships and other on-the-job training programmes to link trained guides to travel agents and tours – including those offered by KNU companies Thoo Lei and Moe Ko San.

3 Comprehensive support to development of integrated adventure tourism development plan Site: Pha-an; Thandaung; Kyaukkyi Opportunities: Incorporate into other national tours, rehabilitation of soldiers and increase access Challenges: Restricted areas for

KNU Central Executive Committee especially KNLA Chief of Staff

KNU companies - Thoo Lei and Moe Ko San

Civil society – KWO, KYO, KAC Travel agencies – Khiri Travel Advertising agencies – promotion

of Kayin state Ministry of Hotels and Tourism NPA – working on de-mining

programs in Kayin

Phase 1 (3 months): Work with KNU and local civil society to identify and agree on different bases in Kayin state for trekking, biking, kayaking, climbing.

Livelihoods;Policy; Business

Phase 2 (3 – 6 months): Work with KNU and vocational training providers – potentially within 3 above – to train suitable local guides, including former combatants.

Phase 3 (3 - 6 months): Integrate Kayin state adventure tour options into a state promotion campaign and into deals offered by existing travel agencies, tour groups and hotels – including those offered by KNU companies Thoo Lei and Moe Ko San.

Phase 4 (6 – 12 months): Lobby Ministry of Hotels and


tourists, landmined areas

Tourism – and MPC – for change in policy to permit network of homestays attached to trekking/ kayaking/ biking routes.

4 Mid-sized boutique hotel Site: Pha-an Opportunities: Few suitable rooms for foreign tourists in Pha-an, Pha-an likely to become the future base for tours to rest of Kayin, potential to link to adventure tours, handicrafts projects Challenges: Hotel zoning policy, skilled staff, identify and access sites of interest, secure buy-in from armed groups, entrenched interests in local business community

Companies with interests in constructing new hotels in Pha-an – UMH, Thoo Lei, Mya Htay Kywe Linn, Ngwe Moe

Chief Minister of Kayin state – need his support and granting permission

Hotel and Restaurant Owners Association – national level

Kayin State, part of UMFCCI Hotel Owners’ Association –

Kayin state level, sub-group within Kayin State Chamber of Commerce

Kayin State Chamber of Commerce – members are hotel owners in Pha-an

Phase 1 (1 – 3 months): Meet with Chief Minister, key members of local government, KNU and local hotel owners representatives to secure land, permission, partnerships.

Business; Policy

Phase 2 (6 – 12 months): Lobby Ministry of Hotels and Tourism to reconsider informal hotel zoning policy – on the grounds that it won’t encourage tourism and or broader community benefits from the sector.

Phase 3 (6 – 12 months): Develop site, open discussions with travel agents and tour providers to integrate hotel promotions into existing packages

Phase 4 (6 – 12 months): Lobby Myanmar Peace Centre (MPC) and Myanmar Investment Commission (MIC) – maybe even escalating to President’s office – for investor incentives in Kayin and other conflict areas, eg: tax breaks, electricity provision.

Agriculture


5 Fruits processing in remote communities and roadside market Site: Myawaddy – Pha-an highway Opportunities: Main road from Myawaddy to Pha-an or Mawlamyaing, potential to develop highway hub for selling local hill produce (as exists on the Thai side on main road to Tak from Maesok) Challenges: Upland areas heavily landmined – including paths villagers

Chief Minister of Kayin State KNU Department of Agriculture –

oversight on agricultural activities in KNU-controlled areas

NRC – implementing pilot vocational training at village-level in Hlaing Bwe for fruits processing

ADB – beginning to consider options to support women’s livelihoods along East-West Economic Corridor (EWEC)

East-West Seed – hybrid seed company offering agro-trainings to develop farmers’ capacity.

Phase 1 (3 – 6 months): Initiate dialogue with key donors and NGOs – especially ADB – to integrate into broader plans to encourage women-focused SMEs along the Asia Highway.

Livelihoods

Phase 2 (3 months): Identify suitable horticultural communities across variety of administrative areas near main road, with assistance from KNU Department of Agriculture, other armed groups in the area and local civil society

Phase 2 (3 – 6 months): Implement vocational training for fruit processing, planting, and Small Business Training to encourage roadside commerce – with assistance from NRC, TBC, and East-West Seed.

Phase 3 (6 – 12 months): Work with travel agencies and


use to access larger market towns

bus companies to integrate stops at roadside markets/restaurants/shops into travel agendas for tour groups; pair with a marketing campaign to support hill produce.

6 Food and spice processing in remote communities Site: Thandaung Opportunities: Large supply of raw material, strong domestic market in Pha-an, as well as nearby Naypyitaw and 115 mile rest stop near Taungoo, only three hours drive from Yangon, existing small-scale processing facilities, bamboo shoots, ginger, turmeric, coffee, tea, fruit variety – grapes, lychees, durian Challenges: Cardamom monocropping, hills near Thandaung heavily landmined – including paths villagers use to access larger market towns, local partners lack technical skills, capital, packing training. Also given the low domestic market for cardamom spice, it would need to be exported, requiring export license. KNU imparts large taxes upon farmers – potential barrier to growth.

KNU Department of Agriculture – oversight on agricultural activities in KNU-controlled areas

KNU 2nd

Brigade and local KNU Township leaders

Karen Baptist Convention and local church-based networks

NRC – implementing pilot vocational training at village-level in Hlaing Bwe for fruits processing; built shelters for IDPs in Thandaung

East-West Seed – hybrid seed company offering agro-trainings

Kanae Htoo General Food Stuff Enterprise – currently operating small processing business for grape juice and jams, founded by Joseph Phaw – graduate in Chemistry who used to work for the Ministry of Co-operatives and received training for wine-making, could provide more local trainings

Linn Shin company – based in Shwepyithar Industrial Zone in Yangon, interested in processing, distributing, packing or exporting products from Kayin

Phase 1 (3 months): Identify target upland areas and implement horticultural assistance programs to diversify cardamom mono-cropping, with assistance from KNU Department of Agriculture, other armed groups in the area and relevant civil society

Livelihoods

Phase 2 (3 – 6 months): Implement vocational training for fruit processing and planting – with assistance from NRC, Kanae Htoo General Food Stuff Enterprise and East-West Seed.

Phase 3 (3 – 6 months): Support development and expansion of existing small-scale processing facilities in Thandaung with technical skills, capital investment, marketing and packing training.

Phase 3 (6 – 12 months): Identify domestic markets and distribution partners in nearby Naypyitaw, at 115 mile rest stop near Taungoo, in Yangon.

Phase 3 (12 – 24 months): Work with KNU companies Thoo Lei and Moe Ko San and other travel agencies to integrate agro-tours into tourism development in Thandaung, paired with a marketing campaign to support hill produce.

7 System of Rice Intensification (SRI) Site: Kyaukkyi

MPSI – already initiated improved dialogue with IDPs, currently limited to humanitarian aid; project ending December

Phase 1 (1 – 3 months): Initiate dialogue with potential NGO partners and with KNU Central Executive Committee, Thoo Lei Foundation, Bago Regional Government, Brigade level and Township level KNU

Livelihoods


Opportunities: Contribute to food security for IDP communities, most villagers working on paddy fields in the area, build on improved ceasefire conditions and previous trust-building by MPSI Challenges: Lack of human capital and training-of-trainers, high levels of local mistrust, imperative to deliver dividends, large long-displaced populations (from conflict and Shwegyin dam), market access. Rice is subsistence, not usually for profit.

PDSG – Peace Donor Group is the new implementing partner taking over from MPSI

KNU Department of Agriculture – oversight on agricultural activities in KNU-controlled areas

Partners Relief and Development – plan to implement SRI in Kyaukkyi

Proximity Designs – social enterprise designing and selling affordable irrigation systems and providing trainings to farmers

leaders.

Phase 2 (6 – 12 months): Develop model farm and work with Partners and Proximity Designs to identify network of potential trainers

Phase 3 (3 – 6 months): Provide capital and technical support to implement an extensive training program, including mobile units

Phase 4 (6 – 12 months): Work with local civil society – KORD and CIDKP – to identify vulnerable food-insecure communities in IDP areas and provide trainings and input support to targeted areas

8 Shrimp farming Site: Gyaing River at Kyondoe, near Pha-an Opportunities: Appropriate mix of salt and freshwater, export opportunities from Mawlamyaing port and to Thailand Challenges: Transport infrastructure, export license, unclear peace dividends – low or zero impact in KNU-controlled, IDP conflict areas

Ministry of Livestock and Fisheries – required for licensing

Myanmar Fisheries Federation Myanmar Shrimp Association Kayin State Chamber of

Commerce – potential local partners

Phase 1 (3 – 6 months): Feasibility studies, identify markets in Thailand and specific site identification

Business

Phase 2 (3 – 6 months): Identify potential local partners through dialogue with Myanmar Fisheries Federation (MFF)

Phase 2 (6 – 12 months): Develop sites, paired with dialogue with Kayin state government and Township-level government officials – and potentially with KNU 6

th or 7

th Brigade depending on site choice

Phase 3 (12 – 24 months): Develop processing facilities with power from newly-upgraded Mawlamyaing IPP power plant nearby

Manufacturing


9 Animal feed factory Site: Myawaddy Industrial Zone (IZ)

KNU Agriculture Department Implementing Partners –

establishing dairy farm south of

Phase 1 (3 – 6 months): Lobby Ministry of Commerce, MPC, Thai government for free flow of exports produced in IZ to Thailand at cross-border special

Business


Opportunities: High volumes corn grown, aligns with Chief Minister’s goals to develop 2,000 acres of corn in partnership with Mekong Institute Challenges: Border cooperation with Thailand and Myanmar for export, feasibility study required

Myawaddy Ministry of Commerce –

regulates import/export licensing Ministry of Livestock and

Fisheries – oversees variety of livestock programmes in country

Chief Minister – interested to support 2,000 more acres of corn in Kayin

Nyi Naung Oo – Selling all plots in Myawaddy IZ

economic zone

Phase 2 (6 – 12 months): Identify suitable corn-producing communities across variety of administrative areas around Myawaddy and with assistance from KNU Department of Agriculture

Phase 3 (12 – 24 months): Develop small collection sites and corn-drying facilities at village-level linked to processing facility at IZ after connected to national grid in 2015

10 Garments factory Site: Myawaddy Industrial Zone Opportunities: Coming onto national grid in 2015, can use export facilities in Bangkok Challenges: Securing export license, lower salaries compared to Thailand so potentially difficult to retain staff

NRC – planning to implement vocational training in Myawaddy; likely including a garment-making component

UMH Company – operating existing garment factory in Pha-an and two others in Yangon

Moe Ko San – interested to acquire two plots in zone, one for garments

Nyi Naung Oo – Selling all plots in Myawaddy IZ

Phase 1 (12 – 24 months): High-level dialogue between Myanmar and Thai government for cross-border exports from Myawaddy Industrial Zone

Business

Phase 2 (1 – 3 months): Dialogue with Kayin state Chief Minister and Kayin state government to secure permission to purchase plots

Phase 3 (1 – 3 months): Purchase plots from Nyi Naung Oo after infrastructure development completed and linked to national grid in 2015

Phase 4 (3 – 6 months): Develop facilities in the zone and train workforce – potentially linked to a dialogue with KNU to train former combatants and their family members and UNHCR to provide jobs to returning refugees and IDPs

11 Support SME development and market integration Site: Kyaukkyi Opportunities: Build on improved ceasefire conditions, high peace-building dividend potential, high supply of raw materials, existing small-scale processing of housing

MPSI – already initiated improved dialogue with IDPs, currently limited to humanitarian aid; project ending December

PDSG – Peace Donor Group is the new implementing partner taking over from MPSI

East Lives – supporting small-scale processing of traditional soaps and shampoos in 50 villages

Phase 1 (1 – 3 months): Dialogue with KNU Central Executive Committee, KNU 3

rd Brigade and Kyaukkyi

Township leaders, key donors and NGOs – particularly NPA and Peace Secretariat.

Livelihoods; Business

Phase 2 (6 - 12 months): Provide funding and support for:

Small Business Training,

technical assistance,

inputs not locally-available

training for quality-checking and packaging.


and consumer goods, strong domestic consumer demand Challenges: Market integration beyond the Kyaukkyi area, technical skills and packaging, capital

around Kyaukkyi Meitta Foundation – funding East

Lives KDN – providing peace-building

training Gaia – Institute for Sustainable

Development already provided trainings in the area

Advertising firms – Yangon-based (Mango)

Phase 3 (3 – 6 months): Identify markets, distribution networks and retailers in urban centres in Myanmar, especially Yangon, Mandalay and Naypyitaw

Phase 4 (3 – 6 months): Pair with a promotional TV, radio and billboard campaign for locally-produced natural organic products with minimal chemicals using locally-sourced raw materials.

12 Network of bamboo handicrafts workshops Opportunities: New hotels needing furnishing, provide peace-building dividends by engaging local stakeholders in economic development Challenges: Not strong potential to appeal to tourist market

Site: Thandaung

KNU 2nd

Brigade and local KNU Township leaders

Karen Baptist Convention and local church-based networks

Phase 1 (3 – 6 months): Initiate dialogue with key donors and NGOs – especially ADB. Secure cooperation with multiple stakeholders in identified areas, including with local and Township-level KNU leaders

Livelihoods

Phase 2 (3 – 6 months): Work with vocational training partners – local civil society, ADB, ILO, NRC and ADRA – in producing bamboo products:

furniture, reclining chairs, mats, room dividers

lampshades, blinds,

hats, baskets, car seat covers

Site: Pha-an


Mya Htay Kywe Linn – operating furniture factory in Pha-an IZ currently, links to distribution networks

ILO, NRC and ADRA – all relevant for vocational training, especially in Pha-an area

Phase 3 (6 – 12 months): Pair with promotional campaign for locally-produced bamboo furniture in Kayin state, link to markets on Asia Highway and at 115 Mile rest stop on Naypyitaw – Yangon highway.

13 Network of weaving handicrafts workshops Opportunities: Integrate into tourism development plans (1 above). Strong community-based networks in Kyaukkyi.

Site: Kyaukkyi

KNU 3rd

Brigade and local KNU Kyaukkyi Township leaders

KWO – large women’s network in upland IDP areas

KYO – strong youth network in nearby upland IDP areas

KYDG – strong youth networks in nearby lowland areas

KBC – opened Karen Women’s

Phase 1 (1 – 3 months): Initiate dialogue and build cooperation with multiple stakeholders in identified areas, including with local and Township-level KNU leaders

Livelihoods

Phase 2 (3 – 6 months): Identify upland areas practicing traditional weaving methods to link to tourist market. Work with vocational training partners – local civil society, ADB, ILO, NRC and ADRA – in developing


Provide peace-building dividends by engaging local stakeholders in economic development Challenges: Need high-level stakeholder agreement on target areas (see 1 above); cooperation with KNU local leaders

Training Centre in Kyaukkyi weaving handicrafts for domestic and tourist markets.

Site: Pha-an


Local weaving shops and weavers in Pha-an, including in Eindu area

ILO, NRC and ADRA – all relevant for vocational training, especially in Pha-an area

Phase 3 (3 – 6 months): Pair with promotional campaign for traditional Kayin woven goods, link to markets on Asia Highway, including those in 5 above.

Phase 4 (12 – 24 months): Work with the Ministry of Hotels and Tourism and tour operators to promote and incorporate these areas into regional and national handicrafts tours. In Pha-an, possibility to develop a handicrafts boat tour on the Salween river. In Kyaukkyi, potential to link upland areas practicing traditional weaving methods to tourist market drawn by trekking and beauty sites.

Telecoms


14 Dialogue with Telecoms actors to identify areas of cooperation Site: Kayin state and all other areas KNU has a presence (northern Mon state, eastern Bago Region, Tanintharyi Region) Opportunities: Support the development of a transparent KNU policy that can incentivize service providers to expand network and improve communications in remote areas, facilitate improved cooperation between government and Karen armed groups, high peace-building dividends potential

KNU Central Economic Committee – driving development of general KNU economic cross-sector policies

KNU Department of Information – likely KNU Department with biggest stake in Telecoms sector

Other Karen armed groups, including DKBA, Border Guard and Peace Council

MPT – state-owned telecoms provider

Newly-awarded foreign tender winners Norway’s Telenor and Qatar’s Ooredoo

Japan Platform – submitted proposal to support local skills-

Phase 1 (1 – 3 months): Initiate dialogue with foreign telecoms operators and MPT to understand their plans to roll out networks in Kayin state and other areas where KNU has a presence

Business

Phase 2 (1 – 3 months): Support a Karen Telcoms Forum to assist KNU Central Economic Committee, relevant KNU departmental heads and all other armed groups in Kayin state to develop a comprehensive and transparent policy on telecoms development – with input from Karen civil society. This will ensure that armed groups are in a stronger position to offer incentives for incoming service providers to extend network to remote regions – like land for towers. It will also support broad trust-building among Karen stakeholders by generating a transparent dialogue around a sector for which there is broad cross-stakeholder support.


Challenges: Land ownership disputes, landmines, lack of priority placed on rural and remote conflict areas by foreign service providers

training for installment and maintenance of telecoms towers.

Asia Foundation – supporting efforts to modernize Myanmar’s telecoms policies with MCIT and MCF

Phase 3 (3 – 6 months): Support dialogue on KNU Telecoms policy between KNU and government stakeholders, including MPC, MCIT and State government.

1/12/2018 Karen Minister Envisions Development Through Coal Power

https://www.irrawaddy.com/in-person/karen-minister-envisions-development-coal-power.html 1/11

In Person

Karen Minister Envisions DevelopmentThrough Coal Power



By MOE MYINT 28 November 2017

Karen State, 283 kilometers southeast of Yangon, has been devastated by years of

fighting between ethnic Karen armed groups and the government army. Peace was

restored to the region in 2012. The state is home to more than 1.5 million people and

relies mainly on border trade with neighboring Thailand. But only two foreign

companies, employing about 880 people, have started up since the end of the Thein

Sein administration in 2010.

The National League for Democracy (NLD) government has been in power for almost

two years, but economic growth in the state remains slow. To attract foreign investment,

the state government is attempting to address power shortages by building a coal-fired

Karen State Chief Minister Daw Nan Khin Htwe Myint. / Moe Myint / The Irrawaddy



power plant. The Irrawaddy interviewed Nan Khin Htwe Myint, chief minister of Karen

State, at her office over the weekend about her commitment to economic reform.

“Don’t even think about development without electricity,” she said.

The NLD government has been in power for two years. What significant

improvements have there been since you took office?

We have precise policies for the transportation, electricity and agriculture sectors. To

deal with our state’s electricity requirements pragmatically, we want a coal-fired plant to

provide power quickly and are still contacting [companies] to set up hydropower

projects as a long-term solution for electrification. Some interested investors have also

come to observe the situation on the ground.

I think the state government can implement [the project] in early 2018 because we have

completed 90 percent of the paperwork and are just awaiting a final decision from the

Union government.

When will you start work on your first project?

The coal-fired plant will start in early 2018.

Will the plant be able to power the entire state?

It can supply the whole state, all seven townships.

Which sector provides the state with the most revenue, for example agriculture or

trade?



At the moment we basically export about $80,000 [worth of goods] to Thailand and

import nearly $2 million every day. We have only three, maximum five, types of

products for export to Thailand, but the traders import about 45 to 50 [types of]

products.

If I am not wrong, we earned 300 million kyats [about $220,000] in revenue last year.

The agriculture sector is not very satisfied with us, so I can say border trade is the main

source of income for the state.

Do you have any plans for the state’s economic reform?

I think we can transform seven townships if we really have electricity in the coming

years. For example, the Myawaddy, Kwakareik and Hpa-An regions could be

designated economic zones. Thandaung and some regions of Hpapun are dominated

by agriculture. So we want to improve the agriculture sector, for example by cultivating

coffee that grows like a tree and bamboo plantation as well. We can lease land to

interested companies in the forest and on vacant land.

I do believe that if we can overcome the region’s power shortage then factories and

industrial zones will arrive automatically, and I hope they can offer lots of jobs to locals,

especially those who are working abroad. But the Kyain Seik Gyi region still needs to

remove landmine if we are keen to expend the agriculture sector there.

What are the main challenges facing your state government at the moment?

One of the major challenges is simply manipulation of uneducated people. For

instance, most locals have no idea about coal-fired plants. They would agree with the

government’s plans to carry it out, but a group of people is purportedly undermining

our ambitions, probably for political reasons and business interest, probably companies

from the neighboring country who sell electricity to our state, and also maybe some



political parties that want to disrupt our success. It has become a big obstacle for us at

the moment.

What type of coal is the plant going to burn? Will it be lignite or something else?

I don’t know about technical issues as I mainly focus on policy guidelines. I think the

relevant ministries can explain the specifics. As far as I know, our state possesses

lignite coal.

Where is that coal located?

There are at least three coal-rich sites in our state. We can get coal in the Kyauk Khet

region of Myawaddy Township, Hpa Pun and Kyain Seik Gye. But the rest of them are

not legally approved for mining projects as the regions were [restricted] for years.

Peace has been restored to those regions now, so we can legally allow mining projects.

The explosive power of Karen State’s coal is much higher than that of Shan coal.

Certainly there is sufficient lignite for the company in the state, but the company will

import from abroad, maybe from Indonesia.

Does that mean the government would allow coal mining in those regions?

Of course we must allow it because we have coal resource in the state. It will be very

helpful for Karen State. If the price and quality of imported coal and domestic coal are

the same, then we prefer to use the local product.

Have experts told you about the advantages and disadvantages of generating

electricity from coal?



We studied [coal plants] ourselves instead of consulting with experts because we

observed them with our own eyes [referring a visit to the Tijit coal plant]. We must have

a business perspective if we want economic growth. It’s impossible to have economic

development without electricity.

Coal is a quick path to bringing economic growth to the state if we can sell the

electricity to others. And we can get a share of the revenue from it when our state

becomes a federal state; as you know, ethnic people are demanding democratic

federal union.

Has the Toyo Thai Power company explained the potential advantages and

disadvantages of the clean coal technology that will be used at the plant?

From what I have learned about clean coal technology, it cannot prevent harm to the

environment 100 percent. Any kind of project has negative impacts on our

environment. But we have to understand that our country has done worse things

before this clean coal project.

Can you give some examples of the worst cases?

For example, the cement factory that currently operates in Karen State; it produces 900

tons of cement but emits a lot of carbon because it uses limestone. A new cement

factory — capacitive 4,000 tons — can pollute too, but it’s not much if we compare it

with the old one because it uses the latest technology.

We went to see the Tijit coal-fired plant in Shan State and it had been upgraded in

recent years. We learned that the situation in Shan is better even though the coal plant

is not applying the latest technology. We will try to have a clean-coal plant and have

already instructed the company to meet Japan’s standards on clean coal. And we will



also allow interested experts to check the quality of the coal plant if there are any

accusations about the plant in the future.

The previous government was planning to build the Hatgyi hydropower project on

the Salween River but delayed it for several reasons. What is the status of that

project now?

That place is located in an area controlled by the Karen National Union Brigade No. 5,

and we haven’t reached an agreement regarding the hydro project. It seems they are

not willing to do it even though they have signed off on the Nationwide Ceasefire

Agreement (NCA) with the government. Because the issue is controversial I don’t want

to go into details. We are looking for some areas for hydropower projects that are

located in peaceful regions and have found four or five places. They are studying the

details. But we can’t get many megawatts from them; they might be 15-20 megawatt

mini-hydro projects.

What is the situation of foreign direct investment in Karen State and which country

dominates in that sector?

China and Thailand are the main investors here. Mostly they are interested in investing

in electrification projects such as hydropower, coal-fired plants, solar panels and wind

turbines. But very few companies have come to inquire about wind turbine projects.

Solar power projects do not meet our requirements because sunlight is available for

only seven months a year. If they distribute electricity in practice, one unit could cost

around 400 kyats. So it was canceled. On the other hand, foreign companies are not

interested in investing in small-scale megawatt projects, such as 30 or 40 [megawatts].

So we have only a big [coal plant project] with Japan. You know the Japan International

Corporation Agency (JICA) and Nippon Foundation helped us a lot with the peace

process; they even provided structures for displaced people.



The Hong Kong-owned Fulltex Sweater factory currently operates with 800 employees

in our state. That’s the only big foreign company here. Another one, an underwear

company, is from Thailand; it has only 80 workers. We have some small businesses like

candle and concrete blocks producers. Nothing special here; that’s it.

Topics: Business

Moe Myint

The Irrawaddy

Moe Myint is Reporter at the English edition of The Irrawaddy.

Burma

ANP Chairman Aye Maung Resigns

https://www.irrawaddy.com/authors/moe-myint

1/12/2018 Homepage (EN)

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The Border Consortium (TBC)TBC is the main provider of food, shelter and other forms of support to approximately 92,000 refugees from Burma/Myanmar living in nine camps in western Thailand. It alsosupports recovery and community-driven development in conflict-affected areas in southeast Burma/Myanmar.

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Reflecting on TrendsDonors and diplomats joined TBC’s board of directors, member organisations and senior staff in mid-November to reflect on contextual and programmatic trends.

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Joining the Digital EconomyA digital-cash pilot programme in two camps provides refugees with more control over their food choices, and upgrades grocery shops.

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1/12/2018 Thai-Myanmar News

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HomeHome KPC & G ThailandKPC & G Thailand USA RepresentativeUSA Representative Myanmar The CountryMyanmar The Country Bus Opportunities in MyanmarBus Opportunities in Myanmar

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Industrial Zone Kayin StateIndustrial Zone Kayin State Thai-Myanmar NewsThai-Myanmar News Hpa-An, Kayin StateHpa-An, Kayin State Mining Companys InterestMining Companys Interest

Nay Pyi TawNay Pyi Taw What Myanmar NeedsWhat Myanmar Needs Capital Market FXCapital Market FX Currency TradingCurrency Trading Myanmar Kyat ExchangeMyanmar Kyat Exchange

Thai-Myanmar NewsThai-Myanmar News

For all your enquiries about business in Myanmar, call our office in Bangkok. KPC & G International (Thailand) Tel: 662 9163591 - 4 *******************************************************************

Foreign tourists will soon be permitted to enter Myanmar through border trade centers in the Kayin State bordering Thailand,said Chief Minister U Zaw Min at the ASEAN Economic Forum held on May 19 in Hpa-an, its capital city.

“As a preparation for the ASEAN Economic Community (AEC) in 2015, the foreign tourists will be allowed to enter the countrythrough the newly opened border trade centers such as Mawtaung, Hteekhee, Myawady and Pharathonesu in the state,” hesaid.

Currently there are few foreign tourists who entered the country through the centers and only one-day trip is allowed.

“There is a bridge built across Thaung Rin River between Myanmar and Thailand. As much as I know, the number of foreigntourists entering the country through the border is not much now.

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Chansak Fuangfu is photographed besidethe map showing Bangkok Bank'sinternational network which nowincludes Myanmar.

Thai Banks Interested in Myanmar(Burma) With Myanmar liberalising itsfinancial sector, Thai banks especiallyBangkok Bank are hopeful that theywould get a sizable share of business inthe country. For Bangkok Bank, ithopes that the 17 years of experience inthat country will raise its profile amonginternational and local companiesenthusiastic about obtaininginvestment information andestablishing a presence in the market.Achieving bank-branch status is nowthe goal, to improve service to Thaicompanies and clients in the 13countries where BBL is operating, saidsenior executive vice presidentChansak Fuangfu.

For decades, no foreign bank has beenable to obtain a full-branch licence inMyanmar, a country where 80 per centof the population does not have a bankaccount amid the virtual absence of anyelectronic-payment system. Most

But opening like this will likely attract more of them. And Thailand has received a lot of tourists currently. The tourists are alsointerested in visiting Kayin,” said a Myanmar resident from Maesot, a town in western Thailand.

******************************************************************

Email: [email protected]

mailto:[email protected]



transactions in the cash-basedcountry were entirely in the hands oflocal banks, led by the state-ownedMyanmar Foreign Trade Bank.

1/12/2018 Business for Peace Forum Held in Karen State « Karen News

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Published September 20, 2017 • Author - Nan Way Phyo Zar • Posted in Articles, Recommended Tags: business, development project, Karen State

Business for Peace Forum Held in Karen State

Karen State is open for business and ready for investment to pave the way for development, participants

at a recent “Business for Peace” forum heard.

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The state’s Minister of Planning, Finance and Municipal Affairs U Than Naing said the state is now stable andbrimming with business prospects that the government, in collaboration with ethnic armed organizations, iseager to capitalize on.

“When the ethnic armed organizations launched businesses in the past five years, we gave them businessopportunities and they carried them out with foreign companies. Now, business persons from the ceasefireorganizations have established companies with us and all the taxes will flow into the state without flowingoverseas,” said U Than Naing.

He added that as new companies are established in the state, more job opportunities will be created for thelocal population. State officials have previously expressed concern over “brain drain” with a sizeable portionof the working aged population heading over the border for more lucrative and readily available jobs inThailand.

The September 14 “Business for Peace” event, held in Hpa-an, attracted around 500 attendees, includingmembers of the Kayin State government, the Pa-O National Liberation Organization, Karen armedorganizations, non-governmental organizations and local administrators.

The discussion was led by U Aung Tun Thet, chair of Myanmar’s chapter of the UN’s Global CompactNetwork, which helps guide responsible business practices.

“Investment is needed to carry out development,” said U Aung Tun Thet. He urged the government tosupport investment, including by offering financial support where necessary.



Many organizations in Karen State have resisted the idea of development before political settlements and thelines of ethnic autonomy have been finalized.

Rights groups have said that moving ahead with development projects before political agreements can leadto the displacement of ethnic communities, marginalization of ethnic voices, land disputes and even freshconflict. Last year, Karen Rivers Watch blamed the contested Hat Gyi dam for fueling fighting between theTatmadaw and Democratic Karen Buddhist Army, which displaced thousands of people.

Former leaders of the Karen National Union (KNU) have previously vocally opposed any large developmentprojects in Karen State until a “stable peace” could be achieved. The KNU signed a bilateral ceasefire withthe government in 2012 and was one of the eight ethnic armed groups to join the nationwide ceasefireagreement in 2015.

Related Posts:

Worried Community Opposes Power Plant Proposed to Run Myaing Galay Cement PlantLocal Residents Block Farm Road to Lun-Nya MountainKaren Residents Voice Concerns over Coal-fired Power PlantNew Sub-station Expected to Light up Karen State VillagesKaren State Residents Oppose Coal-fired Power Plant through Petition

Tags: business, development project, Karen State

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1/12/2018 Building new opportunities in Burma's Karen State - BBC News

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Building new opportunities in Burma's Karen StateBy Jonathan HeadBBC News, Karen State, Burma

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Many local residents travel long distances to work in Rangoon or Thailand

Hpa-an, the little capital of Kayin, or Karen, State is setamong jagged, green limestone hills along the banks of theSalween River.

It's a glorious location and a strategic one too - about 60km (37miles) upstream from the port of Moulmein on the AndamanSea, and around 150km from the Thai border.

There's plenty of traffic in the early morning around the busstop, close to the old clock tower in the town centre.

But most of the people are leaving, not arriving; young Karenwomen, squeezed into converted pick-up trucks, heading toThailand to work in garment factories or as domestic servants,and men transferring from the overnight bus from Rangoon, off to work on construction sites inBangkok.

For all of Kayin State's promising potential, the only jobs there have been in the antiquated andbadly-paid agricultural sector.

That is not just due to the chronic under-development which afflicted all of Burma under militaryrule. Much of the state has also been a war zone for the past 60 years, its forested frontier areas

Burma's Transition

Myanmar sets general electiondate

Myanmar votes to keep militaryveto

Profile: Myanmar President TheinSein

Profile: Aung San Suu Kyi

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battlegrounds between government forcesand Karen insurgents.

The border with Thailand has offered the onlyeconomic lifeline; as an escape toemployment, however menial, or as a routefor smuggling. Men who did not take thosechoices often ended up fighting, either asinsurgents for the Karen National Union (KNU)and other splinter groups, or as soldiers forthe Burmese army.

Fifty-year-old widow Hla Win is typical. Herhusband was a government soldier killed in battle 25 years ago. She is waiting in the back of apick-up truck for the rough, six-hour ride to Myawaddy. From there she will walk across the borderto the Thai town of Mae Sot, and take a bus to a smaller town where she works as a house-maidfor around $100 (£61) a month.

"If possible of course I would love to come back and live here," she said. "But I don't have a job, Idon't have a house - where would I live?"

'Local jobs needed'

But a few kilometres outside Hpa-an, the sound of hammering, drilling and sawing heralds thepromise of a new era in Kayin State.



Investment is starting to trickle in as Burma continues to reform

In an area of scrubby ground that was still subject to occasional skirmishes between the army andthe KNU just a year ago, the foundations are being laid for Hpa-an's first industrial estate. The veryfirst factory opened in early November, employing 150 local people.

The man who built it is U Myint Htay, a Burmese entrepreneur who founded a garmentmanufacturing company, UMH, in 1996. He already has two garment factories operating inRangoon.

The story of the Burmese clothing industry is closely tied to the country's recent political journey.



After the mass uprising against the eccentric, isolationist military regime of General Ne Win in1988, which was brutally put down, the ruling generals realised they needed foreign investment toend Burma's dire poverty, and they changed the law to make this possible.

With cheap labour, and a location close to global transhipment ports like Singapore, clothing wasan ideal first step, and offered investors an alternative to China.

Companies, mainly based in Hong Kong and South Korea, built factories doing the simple tasksknown in the industry as CMP (cutting, making, packing), where the materials were all imported,and simply sewn and then re-exported, mainly to Europe and the US.

At the industry's peak, in the year 2000, there were around 300 garment companies in Burmaemploying around 300,000 workers.

But the imposition of US and EU sanctions from 2003, together with consumer boycott campaigns,hit the industry hard. Some went out of business. Others, like UMH, managed to switch to newAsian markets. Today U Myint Htay makes garments exclusively for the Japanese market.

Investing in Hpa-an would have been unthinkable without the political changes in Burma over thepast 18 months. The new government has launched initiatives to end the ethnic conflicts, whichhave continued since independence in 1948, resulting in a ceasefire a year ago, and peace talksbetween the government and the KNU.

It is still a very uncertain environment in which to invest more than $1m. But U Myint Htay sees twostrong reasons to do so.

"I want the people of Kayin State to be able to find jobs here, close to their families, rather than goacross to Thailand where they do not have real security," he said. But he also sees the potential ofHpa-an's geographical position.



Young women are being taught the basics of garment production

He has opened a sewing school to train local people who have never done any kind of industrialwork before. But he is also benefitting from workers choosing to come back from Thailand, bringingtheir skills with them.

Among the women busy at their machines in his factory was 22 year-old Myat Weet Yeewai, whoused to work with her two sisters at a factory in Mae Sot. She said she was much happier now shecould live close to her mother in Hpa-an. Her pay is lower than it was in Thailand, but so are herhours.



Myanmar sets general election date Myanmar votes to keep military veto

The UMH factory in Hpa-an is producing very basic white clothing, for Japanese restaurants andhospitals, although U Myint Htay says their standards are very high. His margins are very tight, andshipping out of Rangoon port is expensive, because its facilities are limited. Shipping throughThailand, even with bad roads, saves him significant costs.

'Wait and see'

Another sign of the changes in Kayin State is the KNU liason office in Hpa-an, whererepresentatives from the insurgent group can interact with those of the Burmese government. Itsestablishment in September has been a source of dispute inside the KNU, some of whose factionsstill do not trust the government.

Inside I met the deputy head of the office, Captain Mann Thein, who has been fighting for the KNUin the jungle since 1976. Now, looking slightly uncomfortable in his civilian surroundings, he isgiving the new government some credit for its changed stance.

"I can see the government is doing a lot for our state, bringing us development," he said. "But westill have to wait and see how far this peace process will go."

Burma's unhappy history inevitably preaches caution. But the sight of rows of humming sewingmachines in what, until last year, was a battleground, is reason enough to believe that life for thepeople of Kayin State is improving.

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1/12/2018 News Review of Rubber Industry in Myanmar - Royal Thai Embassy, Yangon, Myanmar

http://www.thaiembassy.org/yangon/en/business/5949/65287-News-Review-of-Rubber-Industry-in-Myanmar.html 1/5

News Review of Rubber Industry in Myanmar

News Review of Rubber Industry in Myanmar

In Myanmar, hundreds of thousands of hectares of land are leased to investors for rubber plantations, often in controversial circumstances. Only 8percent of the total production is used within Myanmar, with the rest exported to China: 70 percent of which is of low quality.

Japan is providing state of the art technology to process raw rubber and boost local production in a bid to find a new supply for its tyremanufacturing industry. According to an MoU between the Myanmar Rubber Planters and Producers Association and Japanese manufacturers, Japanwill provide technology to produce high-quality raw rubber from plantations.

Myanmar rubber is not good enough to export, even growers complain that the price of $300-400 per tonne is unfairly low, according to U KhaingMyint, Secretary of the Myanmar Rubber Planters and Producers’ Association. Due to growing demand in the global rubber commodity market,Myanmar rubber can be sold at standardized prices.

Myanmar's first central rubber market will be built at Mawlamyine in Mon State as authorities seek to help the industry amid low prices andsluggish sales. Mon State is the country’s top rubber producer and the commodity is considered a “promising export” in Myanmar’s NationalExport Strategy (NES). However, local planters have struggled to sell in the international market, due to issues with quality and falling global prices. TheNES highlights the need for a central rubber market. The central rubber market is set to be built in a compound on Ministry of Commerce-owned land inMawlamyine, and will be jointly managed by the Ministry of Commerce, the Ministry of Agriculture and Irrigation, and the Myanmar Rubber Planters andProducers Association (MRPPA). The establishment will help rubber planters to sell their wares. Exporters will be able to buy rubber through an auctionsystem at the market. Planters can refuse to sell if they are not happy with the bid, though exporters will be blacklisted if they do not buy at their biddingprice.

Mon State, Tanintharyi, Bago and Ayeyarwady regions are the major rubber producers. However, Mon State is the first choice for a market, as itis the largest producer. If the rubber market in Mon State is successful, the Department of Export Promotion will consider establishing rubber markets inother states and regions. The Mon State rubber market will be based on an MRPPA study of rubber markets in Thailand and will be built duringthe next fiscal year, starting on 1 April 2016. A related law is being drafted and a regulatory body will also need to be formed.

With help from Japan, a laboratory for testing the quality of rubber has been set up in Yangon, and Myanmar is also applying for membershipat the International Rubber Association (IRA) in Malaysia. “It is quite difficult to get a certificate from IRA. Our laboratory is necessary to become amember, as every product certified by the laboratory is globally recognized,” stated the Department of Export Promotion.

Myanmar’s rubber growers have struggled to produce high-quality products. Out of the four tyre factories in the country, only one – theYangon Tyre factory – is able to export, according to the MRPPA. Three of the country’s four tyre factories are owned by the state, two by theMinistry of Industry and the others by the military-owned Myanmar Economic Cooperation.



Yangon Tyre Factory, the only privately owned plant, has been exporting to Malaysia for two years, in batches of 800, by sea. The company hasearned about US$200,000 by exporting a total of 3200 tyres at $60 each. Rubber growers believe this kind of success indicates the need for morefactories capable of exporting, and promote more factories of this kind.

References: http://www.mmtimes.com/index.php/business/17536-rubber-market-to-be-built-in-mawlamyine.html(http://www.mmtimes.com/index.php/business/17536-rubber-market-to-be-built-in-mawlamyine.html) Latest News (http://consult-myanmar.com/category/latest-news/), Foreign Companies (http://consult-myanmar.com/tag/foreign-companies/), foreign investment (http://consult-myanmar.com/tag/foreign-investment/), International Rubber Association (http://consult-myanmar.com/tag/international-rubber-association/), investment(http://consult-myanmar.com/tag/investment/), Ministry of Commerce (http://consult-myanmar.com/tag/ministry-of-commerce/), Myanmar RubberPlanters and Producers Association (MRPPA) (http://consult-myanmar.com/tag/myanmar-rubber-planters-and-producers-association-mrppa/), naturalresources (http://consult-myanmar.com/tag/natural-resources/), special economic zone (http://consult-myanmar.com/tag/special-economic-zone/), tyreindustry (http://consult-myanmar.com/tag/tyre-industry/), U Htin Kyaw Oo (http://consult-myanmar.com/tag/u-htin-kyaw-oo/), Latest News (http://consult-myanmar.com/category/latest-news/) , Japan’s Rubber Trade Association (http://consult-myanmar.com/tag/japans-rubber-trade-association/), Japanesemanufacturers (http://consult-myanmar.com/tag/japanese-manufacturers/), Khine Myint (http://consult-myanmar.com/tag/khine-myint/), MyanmarRubber Planters and Producers Association (http://consult-myanmar.com/tag/myanmar-rubber-planters-and-producers-association/), Raw Rubber(http://consult-myanmar.com/tag/raw-rubber/), Technology (http://consult-myanmar.com/tag/technology/), tyre manufacturing industry (http://consult-myanmar.com/tag/tyre-manufacturing-industry/), Yoshio Kanai (http://consult-myanmar.com/tag/yoshio-kanai/), Latest News (http://consult-myanmar.com/category/latest-news/), Economy (http://consult-myanmar.com/tag/economy/), export (http://consult-myanmar.com/tag/export/), MyanmarRubber Planters and Producers Association (http://consult-myanmar.com/tag/myanmar-rubber-planters-and-producers-association/), Ribbed SmokedSheets (http://consult-myanmar.com/tag/ribbed-smoked-sheets/), RSS (http://consult-myanmar.com/tag/rss/), Rubber (http://consult-myanmar.com/tag/rubber/), Trade (http://consult-myanmar.com/tag/trade/), U Khaing Myint (http://consult-myanmar.com/tag/u-khaing-myint/), LatestNews (http://consult-myanmar.com/category/latest-news/), Daw Theingi Myint (http://consult-myanmar.com/tag/daw-theingi-myint/), Kayin State(http://consult-myanmar.com/tag/kayin-state/), Mon State (http://consult-myanmar.com/tag/mon-state/), Myanmar Rubber Planters and ProducersAssociation (http://consult-myanmar.com/tag/myanmar-rubber-planters-and-producers-association/), Myanmar Times (http://consult-myanmar.com/tag/myanmar-times/), Rubber prices (http://consult-myanmar.com/tag/rubber-prices/), Tanintharyi Region (http://consult-myanmar.com/tag/tanintharyi-region/), Tokyo (http://consult-myanmar.com/tag/tokyo/), U Khin Kyu (http://consult-myanmar.com/tag/u-khin-kyu/), UKhine Myint (http://consult-myanmar.com/tag/u-khine-myint/), Zabudate rubber plantation (http://consult-myanmar.com/tag/zabudate-rubber-plantation/).

http://www.mmtimes.com/index.php/business/17536-rubber-market-to-be-built-in-mawlamyine.html

http://consult-myanmar.com/category/latest-news/

http://consult-myanmar.com/tag/foreign-companies/

http://consult-myanmar.com/tag/foreign-investment/

http://consult-myanmar.com/tag/international-rubber-association/

http://consult-myanmar.com/tag/investment/

http://consult-myanmar.com/tag/ministry-of-commerce/

http://consult-myanmar.com/tag/myanmar-rubber-planters-and-producers-association-mrppa/

http://consult-myanmar.com/tag/natural-resources/

http://consult-myanmar.com/tag/special-economic-zone/

http://consult-myanmar.com/tag/tyre-industry/

http://consult-myanmar.com/tag/u-htin-kyaw-oo/


http://consult-myanmar.com/tag/japans-rubber-trade-association/

http://consult-myanmar.com/tag/japanese-manufacturers/

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http://consult-myanmar.com/tag/myanmar-rubber-planters-and-producers-association/

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http://consult-myanmar.com/tag/technology/

http://consult-myanmar.com/tag/tyre-manufacturing-industry/

http://consult-myanmar.com/tag/yoshio-kanai/


http://consult-myanmar.com/tag/economy/

http://consult-myanmar.com/tag/export/


http://consult-myanmar.com/tag/ribbed-smoked-sheets/

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http://consult-myanmar.com/tag/rubber/

http://consult-myanmar.com/tag/trade/

http://consult-myanmar.com/tag/u-khaing-myint/


http://consult-myanmar.com/tag/daw-theingi-myint/

http://consult-myanmar.com/tag/kayin-state/

http://consult-myanmar.com/tag/mon-state/


http://consult-myanmar.com/tag/myanmar-times/

http://consult-myanmar.com/tag/rubber-prices/

http://consult-myanmar.com/tag/tanintharyi-region/

http://consult-myanmar.com/tag/tokyo/

http://consult-myanmar.com/tag/u-khin-kyu/

http://consult-myanmar.com/tag/u-khine-myint/

http://consult-myanmar.com/tag/zabudate-rubber-plantation/



Myanmar Rubber Plantation and Production (2014-2015 FY)

No Region/StatePlanted Area

(Acre)Productive Area

(Acre)Average Productive (Per

Year/Acre/Pound)Production

(Pound)

1. Nay Pyi Taw

2. Kachin State 76,537 1,846 500.65 942,657

3. Kayah State 36

4. Kayin State 260,838 121,728 762.53 92,821,079

5. Chin State 9

6. Sagaing Region 12,622 283 424.12 120,025

7. Thaninthayi Region 334,051 121,773 554.20 67,486,164

8. Bago Region 115,129 39,053 619.91 24,209,202

9. Magwe Region 80

10. Mandalay Region 114

11. Mon State 489,053 313,893 730.65 229,346,381

12. Rakhine State 36,523 2,000 530.39 1,116,458

13. Yangon Region 42,233 9,688 425.17 4,109,083

14. Shan State 183,320 28,416 559.27 15,892,331

Shan State (South) 1,128 98 692.81 67,895

Shan State (North) 81,308 21,092 536.48 11,305,442

Shan State (East) 100,884 7,226 628.00 4,508,994



Myanmar FY Year Planted Area (Acre) Productive Area (Acre) Production (MT)

2005-06 558,565 267,180 64,239

2006-07 728,329 303,907 73,355

2007-08 935,800 342,930 88,528

2008-09 1,057,395 356,437 93,207

2009-10 1,143,427 411,688 111,673

2010-11 1,246,531 460,767 127,921

2011-12 1,342,202 490,151 149,619

2012-13 1,435,931 527,693 164,425

2013-14 1,506,867 572,737 176,915

2014-15 1,584,115 639,482 198,024

2015-16 (plan) 1,611,386 734,436 227,533

15.Areyarwaddy Region 33,570 700 728.73 510,837

Source: Myanmar Rubber Planters and Producers Association (MRPPA)

Myanmar Rubber Planted Area and Production

Source: Myanmar Rubber Plantersand Producers Association(MRPPA)

Myanmar Rubber Export (2005-06 to 2014-2015)

Myanmar FY Year Export (MT) Export Value (Million USD)

2005-06 52,800 63.42

2006-07 46,930 76.55

2007-08 61,610 116.49

2008-09 40,070 73

2009-10 78,785 133.19

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2010-11 92,677 304.41

2011-12 78,881 312.46

2012-13 86,881 265.26

2013-14 84,299 196.13

2014-15 77,018 111.85

Source: Myanmar Rubber Planters and Producers Association (MRPPA)

Myanmar Rubber Export Price (15 January 2016)

Rubber Type/Per Ton Cost (USD)

R.S.S (1) 1000-1100

R.S.S (2) 950-1050

R.S.S (3) 900-1000

R.S.S (4) 850-950

R.S.S (5) 800-900

Crepe Rubber 700-800

M.S.R (3) 1150-1250-

M.S.R (10) 900-1000

M.S.R (20) 850-950

M.S.R (50) 750-850

R.S.S: Rubber Smoke Sheet, M.S.R: Myanmar Standard Rubber Source: Myanmar Rubber Planters and ProducersAssociation (MRPPA)

******************

1/12/2018 Myanmar’s Energy Sector - Royal Thai Embassy, Yangon, Myanmar

http://www.thaiembassy.org/yangon/en/business/5948/65288-Myanmar%E2%80%99s-Energy-Sector.html 1/4

Myanmar’s Energy Sector

Myanmar’s Energy Sector

* Policies and Regulations

- The Myanmar National Electrification Plan aims to achieve 100% electrification by 2030. According to the Ministry of Electric Power(MOEP), full electrification would require more than 7.2 million households to be connected over the next 16 years.

· Myanmar is working on 17 new power plant projects that are due for completion in 2016, 10 others were completed between 2013and 2014, and there are plans to construct another 87 power plants that can supply 54,608 MW of installed capacity.

· President Thein Sein, in his monthly radio address, stated: “as of 2014, we have managed to provide electricity to 243 townshipsout of the 398 townships from the national power grid and the remaining 155 townships by other alternative ways… Needless to say,regular supply of electric power is an essential component in developing a country’s economy. Furthermore, electricity is also a crucialinfrastructural need for education and healthcare sectors. As such, we have tried to the best of our ability to improve the performance ofthe electricity sector.”

- In addition to the FDI law, the acts and laws related to the energy sector include

· the 1914 Companies Act (currently under revision), includes several statutes related to labor issues,

· recently approved mining laws,

· and multiple laws governing the oil and gas sector, including the Oilfields Act (1918), the Petroleum Act (1934), the Oilfield Rules(1936), the Petroleum Rules (1937), the Essential Supplies and Services Act (1947), the Oilfields (labor and Welfare) Act (1951), thePetroleum Resources (Development Regulation) Act (1969), and the Environmental Conservation Law (2012).

· In December 2012, Myanmar submitted an application to join the Extractive Industries Transparency Initiative (EITI), and was admittedas an EITI candidate in July 2014. Myanmar’s participation in EITI requires compliance with international standards on transparency for allits oil, gas and mining earnings, which can include disclosure of information relating to company ownership, contract terms, state-ownedextractive industries and revenue allocation.

· National Energy Policy: accomplished with the help of the Asian Development Bank (ADB) (7 energy related ministries arecooperating under the National Energy Management Committee, under the patronage of the Vice President)

· Electricity Law: legislated on 27 October 2015, by-laws are also ongoing

* Challenges

- Challenges to entering Myanmar’s energy market include the lack of both human and physical capacity, an opaque and ever-changinglegal system, lack of coordination among the multitude of energy-related ministries, and remaining U.S. sanctions.



- The distribution of energy is also another challenge facing the Myanmar government and investors: even after the necessary capital hasbeen secured, successful projects must develop and execute an appropriate strategy to reach all communities.

- Despite these challenges, Myanmar has tremendous potential in its energy sector and, if developed properly by all involved, will not onlybring much-needed power generation and wealth to its people and investors, but also become a major regional energy hub.

- The Myanmar Investment Commission issued a directive in August 2014 to expand the sectors that could be 100% held by foreigninvestors, including small and medium sized hydropower and coal-fired power projects, but did not extend this privilege to the oil and gas sector.

- Even beyond legal and regulatory hurdles, falling oil prices have dulled excitement for this sector.

- Reputational issues can also impact investors’ decision to enter the Myanmar market. Fears of local protesters, potential JV partners andentire industries plagued by corruption, an opaque legal system, and the possibility that the country could backslide to its military past all temperinvestor enthusiasm.

* Opportunities

- Infrastructure and equipment: rehabilitating or building roads, pipelines, and other infrastructure

- Technical assistance and capacity building: Myanmar’s government and its population strongly desire an energy sector that adheres tointernational standards. Government officials, managers, and laborers need training to be able to draft appropriate legislation, comprehendcomplex production sharing agreements and contracts, build a physical and corporate infrastructure that complies with international anddomestic regulations, and provide workers with necessary skills.

- Environmental and social impact assessment consultancy services: conducting in-depth studies on the environmental and social impactof projects could mitigate potential social issues and alleviate concerns about environmental degradation.

- Business Monitor International (BMI) predicts that Myanmar’s consumption of transport fuel (particularly gasoline and diesel) will grow by65% over the next ten years, and that the increase will rise from 45,300 barrels per day (bpd) in 2015 to 74,400 bpd by 2024.

- Surging domestic demand has overwhelmed the country’s three small refineries, which can now only meet about 30% of diesel andgasoline needs. The other two thirds has to be imported, raising end-user costs (Mizzima Issue 4, Vol. 5 Jan 28 2016).

Energy Sector Potentials

Oil and Gas

- Myanmar’s oil and gas industry has up to 3.2 billion barrels of oil and 18 trillion cubic feet (Tcf) of natural gas reserves (with unprovenresources potentially expanding that figure). Gas comprises 90% of total Myanmar petroleum products.

- Myanmar is the 10 largest producer of natural gas in the world.

- According to the U.S. Energy Information Administration, Myanmar has estimated proven gas reserves of 10 Tcf, and proven oil reservesof 50 million barrels.

th



- U.K. Trade & Investment noted that Myanmar’s oil and gas sector received over US$14.3 billion in FDI by the end of the third quarter ofthe 2014/15 fiscal year, and currently accounts for about 36.3% of the country’s total foreign investment.

Hydropower

- Myanmar also has great hydropower potential through its major rivers, which drain the four main basins of Ayeyarwaddy, Chindwin,Thanlwin, and Sittaung Rivers - capacity is estimated to be more than 100,000 MW.

Coal

- An estimated 400 coal occurrences have been identified in Myanmar, with significant occurrences in the Ayeyarwaddy and Chindwinriver basins and in Shan state. (ADB)

- Coal has mainly been found in the Sagaing, Magwe, and Tanintharyi Divisions. Most of Myanmar’s coal resources were formed duringthe Tertiary period, and are the most valuable type in terms of quality (lignite to sub-bituminous).

- Coal found in Shan state tends to be of lower quality (sub-bituminous). The 33 major coal deposits have estimated reserves totalingsome 488.7 million tons in various qualities. Only 1% of this estimated potential has been confirmed, however.

Solar

- Renewable energy in Myanmar has recently been a focus of NGOs and social enterprises that are looking to bring clean energy sourcesto villages without power, but are concerned with environmental damage from coal or hydropower-related projects.

- In 2014, U.S.-based ACO Investment Group announced plans for a US$480 million solar power project in the Mandalay region that isprojected to provide up to 12% of the country’s future power generation.

- Last year, the ADB announced a plan to bring power to 25 off-grid villages in the country through a US$2 million grant project to expandclean energy use, including through solar power.

* Activities and Financial Support to provide opportunities

- Thailand and Myanmar signed an MoU on energy cooperation, specifically in the petroleum and electricity sectors in June 2015 (TheMyanmar Times: June 17, 2015)

- Since 2011, offshore and onshore oil and gas blocks have been awarded to major oil and gas companies, and international businessesand financial institutions, including the ADB, which have sought power generation opportunities throughout the country.

- Foreign investors from Singapore, Thailand, China, the U.S., Japan, the U.K., Norway and other European and Asian countries areworking in the energy sector, including in the oil and gas, coal, and hydropower industries.

- In September 2015, the World Bank approved a 400 million USD loan to support the Myanmar government’s National Energy Policy(NEP), which aims for universal electricity access by 2030. In the first phase of NEP, electricity will extend to over 1 million households, 60% ofwhich will connect to the national grid and 40% will obtain off-grid electricity by 2021.



- Other international donors – including the ADB, UN agencies, and development agencies from Germany, Japan, Italy, Norway, India, andother countries – are making significant investments in this area.

- In addition, international oil and gas companies, such as Total and Chevron, now have corporate social responsibility (CSR) activitiesaddressing Myanmar’s rural electricity access; private charitable foundations are scoping potential projects as well. With this influx of interestand resources, local and international nongovernmental organizations (NGOs), social enterprises, and renewable energy service providers arepositioning themselves to implement pilot projects and, if successful, to launch longer-term, commercially viable initiatives.

References:

1) Myanmar’s Energy Sector by Erin Murphy (August 6, 2015)

( http://www.crossroadsmyanmar.com/focus/myanmars-energy-sector (http://www.crossroadsmyanmar.com/focus/myanmars-energy-sector) )

2) Myanmar Power Sector by Mandalay Capital Research June 18, 2014

3) Short and Long term Power Development Plant by MOEP

4) An overview of the Electricity Industry in Myanmar by Vikas Sharma, Associate Director, Public Sector & Government Practice, Frost & Sullivan

5) Myanmar’s Path to Electrification: The Role of Distributed Energy Systems – Rachel Posner Ross (Oct 2015)

6) http://www.elevenmyanmar.com/business/oil-and-gas-tops-investment-list (http://www.elevenmyanmar.com/business/oil-and-gas-tops-investment-list),

7) http://www.mmtimes.com/index.php/business/17287-government-reveals-energy-production-figures.html(http://www.mmtimes.com/index.php/business/17287-government-reveals-energy-production-figures.html),

8) http://www.mmtimes.com/index.php/business/18332-woodside-discovers-offshore-gas-deposit.html(http://www.mmtimes.com/index.php/business/18332-woodside-discovers-offshore-gas-deposit.html)

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http://www.crossroadsmyanmar.com/focus/myanmars-energy-sector

http://www.elevenmyanmar.com/business/oil-and-gas-tops-investment-list

http://www.mmtimes.com/index.php/business/17287-government-reveals-energy-production-figures.html

http://www.mmtimes.com/index.php/business/18332-woodside-discovers-offshore-gas-deposit.html

05/07/60

1

Source: NESDB

http://www.nesdb.go.th/main.php?filename=QGDP_report


05/07/60

2

Source: NESDB

Source: PDMO

Source: BOT

Source: MOTS

Source: MOC


http://www.pdmo.go.th/index.php

https://www.bot.or.th/Thai/Statistics/Pages/default.aspx

http://www.mots.go.th/more_news.php?cid=420&filename=index

http://www.ops3.moc.go.th/thtrade/sarup.htm

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Source: MOC

http://tradereport.moc.go.th/

https://www.globalinnovationindex.org/

http://www.doingbusiness.org/reports/global-reports/doing-business-2017

http://reports.weforum.org/global-information-technology-report-2016/networked-readiness-index/

http://www.imd.org/wcc/world-competitiveness-center-rankings/world-competitiveness-yearbook-ranking/

https://publicadministration.un.org/egovkb/en-us/reports/un-e-government-survey-2016

http://www.e-unwto.org/doi/book/10.18111/9789284418145

https://www.weforum.org/reports/the-global-competitiveness-report-2016-2017-1

http://unctad.org/en/pages/publications/World-Investment-Prospects-Survey.aspx

https://www.bloomberg.com/news/articles/2017-03-03/these-countries-are-getting-more-miserable-this-year

https://www.usnews.com/news/best-countries/best-start-a-business

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Thailand's Economic Factsheet

Economic Figures

GDP per capitaUSD

6,035.1Nominal GDP

407.1Trade & Tourism

Foreign Reserves

Public Debt Per GDP

42.6%

184.1

Unemployment Rate

1.09%

Policy Interest Rate

1.5%%

In�ation1.3%

bil. USD

2016

(as of May 2017)

(as of April 2017)

(as of Q1/2017)

Top 10 Import Origins

Top 10 Exports1. Auto Parts & Accessories 2. Computer, Equipment, & Parts 3. Precious Stones & Accessories 4. Rubber Products 5. Plastic Pellets 6. Electronic Integrated Circuits 7. Chemical Products 8. Machinery and Parts 9. Rubber 10. Re�ned Fuels

1. Crude Oil 2. Machinery & Parts

3. Electrical Machinery & Parts 4. Chemical Products

5. Jewelry 6. Iron, Steel, & Products

7. Electrical Integrated Circuits 8. Auto Parts & Accessaries

9. Other Metal Ores 10.Electrical appliances

Top 10 ImportsImport Value

93.26 88.21 +5.05Export Value

Trade Balance

Trade Statistics (Jan-May 2017: bil. USD)

Department of International Economic Affairs

Tourism

Jan-May2017

foreign tourists

14.6million

Top Tourists (Ranking by Number)1 2

(Jan-May 2017)

(Jan-May 2017)

GDP Q1/2017 3.3%

as of May 2017

Top 10 Export Destinations

(as of April 2017)

China Malaysia South Korea

2014 2015 2016

YEAR

GD

P G

row

th

2017 GDP Growth Forecast

Bank of Thailand

Fiscal Policy Of�ce

3.4

3.6

3.5

3.2

3.03.33.3

ADBWorld Bank

IMFSiam Commercial Bank

Kasikorn Bank

as of May 2017

as of May 2017

bil. USD

43

0.9

2.9 3.3

Russia

NESDB 3.3-3.8

Economic Policies

Infrastructure Plan

DigitalEconomy

Plan

Hard Infrastructure

Soft Infrastructure

Service Infrastructure

Digital EconomyAcceleration

Digital Society

Digital Workforce

Inter-city rail network

Highway network link withneighbouring countries

Public transportation network

Air transport capacity enhancement

Maritime Transport development

Digital Thailand

New Engine of Growth

Next - Generation Automotive Smart Electronics Af�uent, Medical and Wellness Tourism Agriculture and Biotechnology Food for the Future

Robotics Aviation and Logistics Biofuels and Biochemicals Medical Hub Digital

Firs

t S-C

urve

New

S-Curve

develop future industries

from current industries


knowledge l ethics and virtues

Value Based Economy

moderation reasonablenessInnovation Technology

Service Sector

Suf�ciency Economy Philosophy

Thailand 4.0

Agriculture1.0

Light Industry2.0

Heavy Industry3.0

Value-based Economy4.0

Middle Income Trap

High Income Country

prudence

Eastern Economic Corridor Development ProjectU-Tapao international

airport200,000 million baht ($5.7 Bill USD)

Map Ta Phut port10,150 million baht ($0.3 Bill USD)

Laem Chabang port35,300 million baht ($1 Bill USD)

High-speed train158,000 million baht ($4.5 Bill USD)

New Cities / Hospitals400,000 million baht ($11.5 Bill USD)

Tourism

200,000 million baht ($5.7 Bill USD)

Industry

500,000 million baht ($14 Bill USD)

Motorway35,300 million baht ($1 Bill USD)

Dual-track railway64,300 million baht ($1.8 Bill USD)

Combined Public and PrivateInvestments at least 1.5 Trillion

baht ($43Billion USD) in thefirst 5 years

EEC

Tak

Chiang Rai

Nong KhaiNakhonPanhom

Mukdahan

Sa Keow

Trat

NarathiwatSong Khla

Kanchanaburi

Phase 1Phase 2

Super Clusters

Other Clusters Targeted Industries

1

Strong Economic Fundamentals

Excellent Infrastructure

WHY Thailand?

& Connectivity

Business-friendly Environment Attractive Incentives

Strategic Location

Investment293BOI

1.8TOTAL bil. USD

2

3 4 5Investment Promotion Strategy

Sustainable Development

More Competitive Economy

National Competitiveness

Environmental-Friendly

Border Provinces in Southern

ThailandSEZs

Digital

Medical

1. Agricultural, �shery and targeted industries 2. Ceramic products 3. Textile, garment, and leather industries 4. Manufacture of furniture 5. Gems and jewelry 6. Medical equipment

7. Automotive, machinery, and parts 8. Electrical appliances and electronics 9. Plastics 10. Medicine 11. Logistics 12. Industrial estates/zones 13.Tourism related industry

Each zone with different targeted activities depending on competencies

Automotive and Parts

Electrical Appliances,Electronics andTelecommunicationEquipment

Eco-friendlyPetrochemicals and Chemicals

Food Innopolis

Agro- processing

ProductsTextiles and

Garment

Incentives

Activity-based Merit-based

1. CompetitivenessEnhancement

Thai Overseas Investment

Clusters

BOI's eligible

activities

1. Agriculture & Agricultural Products 2. Mineral, Ceramics & Basic Metals 3. Light Industry 4. Metal Products, Machinery & Transport Equipment 5. Electronics & Electrical Appliances Industry 6. Chemicals, Paper & Plastics 7. Service & Public Utilities

Classi�ed incentives based on importance of activities

Grant additional incentives to encourage investment that bene�t

the country or overall industry

2. Decentralization3. Industrial Area

Development

0 - 8 years of CIT

Exemption

Exemption of import duties on

machinery

Tax and Non-TaxIncentives

Exemption of import

duties on raw materials for use

in production for export

including...

Special Economic Zones (SEZ)

- INCENTIVES - 8 years of CIT

Exemption + 50% reduction for

further 5 years

Border SEZs

- INCENTIVES - 3-8 years of CIT

Exemption + 50% reduction for

further 5 years

+ many more


in 2017 (as of March)projectsapproved

300% tax deduction

on R&D investment

Eastern economic corridorTHAILAND'S

Thailand’s flagship specialeconomic zone, located in Rayong,Chachengsao and Chonburi

Facilitate and attract investmentin 10 targeted industries

Connect Indian Ocean with PacificOcean, CLMV, South China: via multi -modal linkages and Free TradeAreas(FTAs)

Excellent infrastructure linkage (200 kms from Bangkok through highway linkages, Laem Chabang commercial port, Map Ta Phut industrialport, U-Tapao international airport)

Strategic Location

Core areas-Investment project

DigitalInfrastructure - Digital Park - Data Center

EECi Innovation Hub

Next-generationautomotive (EV/AV)

Aviation industry Robotics, Smartelectronics

Advanced petrochemicaland Bioeconomy

Medical hub

Global Business Hub/ Free EconomicZone

New Cities, Inclusivegrowth

Public Utilities

infrastructures Business, Industrialclusters and

Innovation hub

TourismNew cities and communities

U-Tapaoair port andaircraft maintenance Sattahipcommercialseaport

Laem Chabang portphase#3

Map Ta Phut portphase#3

High-speed rail–eastroute

Double-track railway

Highways and motorway

10 targeted industries

RoboticsNext - GenerationAutomotive

Smart Electronics

Affluent, Medical andWellness Tourism

Agriculture andBiotechnology

Food for the Future

Aviation and Logistics

Biofuels and Biochemicals

Medical Hub

Digital


First S-Curve New S-Curve

investment incentives Maximum incentives for qualified investment projects

Exemption of corporate income tax for up to 15 years

Exemption of import duties

target

on machinery/raw or essential materialsimported for use in production forexport/goods for R&D

Matching Grantsfor investment/R&D/innovation/humanresources development for targeted industries.

Permission to own land for BOI promoted projects

Rights to state's land lease for 50 years

renewable upon approval for a further 49 years

15% personal income tax rate, the lowest rate in ASEANfor foreign executives working for regional headquarters orinternational trading companies, treasury centres, along withregional R&D centres.

One-stop service center to facilitate foreign investorsprovide useful information, and issue permits for trading,export and import all in one location.

Strategic Target Center (STC)

U-Tapao internationalairport

to attract investors, experts and scientists from aroundthe world.

Dual-track railway

Map Ta Phut port

158,000 million baht ($4.5 Bill USD) 64,300 million baht ($1.8 Bill USD)

Laem Chabang port

High-speed train

New Cities / Hospitals

Tourism

Industry

Motorway

EEC10,150 million baht ($0.3 Bill USD)







Combined Public andPrivate Investments atleast 1.5 Trillion baht

in the first 5 years

[ ]

MAZDA POWERTRAIN MANUFACTURING (THAILAND) CO., LTD.

HITACHI TOCHIGI ELECTRONICS (THAILAND) CO., LTD.

FORD MOTOR COMPANY (THAILAND) LTD.

BRIDGESTONE METALPHA (THAILAND) CO., LTD.

GENERAL MOTORS POWERTRAIN (THAILAND) LTD.

AIRBUS OPERATIONS LTD.

TOYOTA MOTORS CO., LTD.

TESLA MOTORS INC.

LAZADA SOUTH EAST ASIA PTE. LTD.

AlIBABA GROUP HOLDING CO.,LTD.

INTERNATIONAL BUSINESS MACHINES CORP.

SEAGATE TECHNOLOGY PLC

FUJI PHOTO FILM CO, LTD.

SAAB ASIA PACIFIC CO. LTD

BAVERISCHE MOTOREN WERKE AG

SUZUKI MOTOR CORP.

HUAWEI TECHNOLOGIES CO. LTD.

GOOGLE ASIA PACIFIC PTE. LTD.

HON HAI PRECISION INDUSTRY CO, LTD.,

PTT GLOBAL CHEMICAL PUBLIC COMPANY LTD.

SHANGHAI GENERAL MOTORS CO, LTD.

KUKA ROBOTICS CORP.

RELIANCE INDUSTRIES LTD.

OTSUKA PHARMACEUTICAL CO, LTD.

DAIMLER AG

THE BOEING COMPANY

Foreign investors in eec*


Eastern Economic Corridor Of�ce (EECO) Ministry of Industry 75/6 Rama VI Road, Ratchathewi,Bangkok10400, Thailand E-mail [email protected]

($43Billion USD)

THAILAND BOARD OF INVESTMENT Head Of�ce: 555 Vibhavadi-Rangsit Rd., Chatuchak, Bangkok 10900, Thailand Tel. (+66) 2553 8111, Fax: (+66) 2553 8222, Website:http://www.boi.go.th, E-Mail: [email protected]

For more information, please contact: * Partial listing comprising of globalcompanies that have expressed interests or

already undertaken investment in EEC

Overseeing Committee on Thailand 4.0 Policy and Strategy

Project Management Team Working Group on “Development Agenda” under Thailand 4.0 Policy and Strategy

Thailand 4.0

Agenda 1: Preparing Thais 4.0 for a First World nation

Agenda 5: Integrating with ASEAN and Connecting Thailand to the Global Community

Agenda 4: Strengthening Internal Economy through Mechanisms of 18 provincial clusters and the 76

Agenda 3: Incubating Entrepreneurs and Developing Networks of Enterprises driven by innovation

Agenda 2: Development of Technology Clusters and Future

Adjusting Public Sector Administration to Support Thailand

Agenda 2.1: Agriculture, Food and Biotechnology

Agenda 1.3: Measures to support Refill and Reform Strategy to improve the Status of Thais 1.0 - 2.0

Agenda 1.2: Set up Skills Development Program

Agenda 2.2: Health, Wellness and Medical Technology

Agenda 3.4: Creating Ecosystems that Nurture Startups

Agenda 2.3: Smart Devices & Robot - Mechatronics

Agenda 2.5: Creative Economy, Culture and High Value Services

Agenda 2.4: Digital, Internet of Things, Artificial Intelligence and Embedded System Technology

Agenda 5.1: Positioning Thailand as a Trading Nation and one of Asia’s Business Centers

Agenda 4.4: Undertaking “Province 4.0” Strategic Plan

Agenda 4.3: Establishment of an Innovation Hub at a Regional Level

Agenda 4.2: Strategies and Guidelines for 18 Provincial Clusters

Agenda 4.1: Basic Infrastructure, Market Systems and Trade Rules

Agenda 2.6: Thailand’s Manpower Strategic Framework

Agenda 5.3: International Business Models in the 21st Century

Agenda 5.2: Economic Development in the Context of CLMVT

Agenda 1.1: Reforming the Education System to prepare Thais for a First World nation

Agenda 3.3: Development of High Value Services

Agenda 3.2: Enhancing the Competitiveness of SMEs

Agenda 3.1: Smart Farmer Development

Agenda 2.7: Research and Development Reform towards Thailand 4.0

Create YourOwn

Infographic

The 12th Social and EconomicDevelopment Plan

(2017-2021)

su�ciency economy

sustainable development people-centered development

Infrastructuredevelopment

10 development strategies 6 strategies correspond to the 20 year National Strategy

4 supporting strategies

1 Human capitaldevelopment

2 Reducing inequality

3 Strengthening theeconomy

4 Green growthdevelopment

5 Enhancing nationalsecurity

6 Good governance

Promoting research and innovation

Development of localeconomy

Internationaldevelopment cooperation

7

8

9

10


1/12/2018 Chief minister says Kayin State ready to move ahead | The Myanmar Times

https://www.mmtimes.com/business/14287-chief-minister-says-kayin-state-ready-to-move-ahead.html 2/12

EduCentreElection 2015

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1. Home2. » Business3. » Chief minister says Kayin State ready to move ahead

Chief minister says Kayin State ready to move ahead

Chief minister says Kayin State ready to move ahead

Su Phyo Win 05 May 2015

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Machinery is displayed at one of Kayin Region’s modern factories. Photo : Thiri Lu / The Myanmar TimesChief minister says Kayin State ready to move ahead

Kayin State’s economy is ready to take off after decades of instability and isolation, with hopes resting on development of infrastructure

leading to closer integration with Thailand and the Mekong sub-region, according to the state’s chief minister.

Speaking to The Myanmar Times in the state capital Hpa-an, U Zaw Min said conflict in Kayin, formerly called Karen State, had led to a massmigration of workers and human resources, mostly to Thailand.

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Kayin was “too sensitive and vulnerable,” during that period, he said. But that era is hopefully coming to a close with progress made towardsigning a nationwide ceasefire accord. “Once that stage is finished, then the region will develop well,” he said.

“If one is going to another country to get a job, if he is already fully educated and finds a good position with higher salary, that would be fine.But for those who are not well educated and migrate without options, we have to create opportunities in our country,” he said.

According to a 2009-2010 UN study, Kayin State, with a population of some 1.5 million, has about 17 percent of households living below thepoverty line, against a national average of 26pc. Almost 30pc of children are stunted and nearly half do not complete primary school on time,with 13pc having no access to schooling at all.

The state compares particularly badly on health and sanitation issues with other areas of Myanmar, with 26pc of households lacking what theUN defined as ‘improved” sanitation and 8pc not using toilets.

The chief minister spoke of the need to develop vocational training for workers in the newly opened Hpa-an industrial zone, which covers 400hectares but so far has only seen a handful of factories constructed. He said there were also plans to build low-cost housing for workers inthe zone.

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Kayin State chief minister U Zaw Min speaks to reporters. Photo: Thiri Lu / The Myanmar Times

Much of the minister’s optimism hinges on Kayin State benefiting from its location along the route of the East-West Economic Corridor, aproject backed by the Asian Development Bank that is years behind schedule on the western Myanmar end of the proposed “corridor”. A1450-kilometre (900-mile) highway, in various stages of development, is intended to link Vietnam starting in Da Nang with Laos and Thailandand then pass through Kayin state to the port of Mawlamyine at the mouth of the Thanlwin (Salween) river.

Jamie Leather, ADB transport specialist, said the project would improve connectivity within Kayin State and with Thailand.

“Improved connectivity will stimulate and sustain economic development, reduce travel times, and support economic development within thecorridor and beyond, lifting many in this poor region of Myanmar out of poverty,” he said.

The ADB is providing financial support for improvement of 66km of road in Kayin State between Eindu and Kawkareik. The completed roadwill have two traffic lanes with wide paved shoulders for improved safety, as well as being raised to cope with flooding.

The minister said a 45km stretch from Kawkareik to the border crossing of Myawady, a key trading point with Thailand, was 90pc complete.

Electricity transmission lines are being laid from Mawlamyine to Myawady and distribution transformers have already been installed under thegovernment’s budget, the minister added.



“We want low interest loans and assistance from other countries, but sometimes we have to start with our government budget to finish theprojects in time,” U Zaw Min said.

MPT and its foreign rivals Telenor and Ooredoo are expanding their telecommunications networks in the state. Tourism is also developingwith more hotels and restaurants opening.

The chief minister said economic growth for the fiscal year 2014-15 reached its target of 15.4pc. This year the growth target is 10.4pc but theminister says he is confident it will be surpassed.

U Khin Kyuu, Bamar nationality minister and owner of the Zabudate Rubber Plantation, notes that more than 60pc of state income comesfrom agriculture, particularly rubber plantations, which cover 400,000 acres, and coffee.

Conflict in the area is known as one of the world’s longest-running civil wars, and bilateral ceasefire agreements signed between armed ethnicgroups in Kayin State and neighbouring Mon State with the government still break down from time to time. The instability was a factor indelaying development of Hpa-an’s industrial zone.

Karyin groups protested last year that industrial investment plans focused on expanding transport networks were a cover to facilitate militaryoperations. But there are hopes that the draft nationwide ceasefire accord signed with the government in March will lead to the start of a realpolitical dialogue and a more enduring peace.

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Coal-fired power plant project in Hpa-An...

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1/12/2018 China, Thailand invest in hydropower | The Myanmar Times

https://www.mmtimes.com/business/5712-china-thailand-invest-in-hydropower.html 2/9


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1. Home2. » Business3. » China, Thailand invest in hydropower

China, Thailand invest in hydropower

China, Thailand invest in hydropower

Soe Sandar Oo 25 Mar 2013China, Thailand invest in hydropower

China and Thailand are interested in investing in hydropower projects in the Thanlwin River, said a senior official from the Ministry of

Electric Power’s Department of Hydropower Implementation on March 20.











“They [China and Thailand] are interested because they are worried about future electricity demand. Due to increasing populations anddevelopment, the production rate cannot meet the consumption rate of electricity in these countries,” he said.

There are six hydropower projects scheduled to be implemented in the Thanlwin River. In northern Shan state there is the 1400 megawatt(MW) Kounloan project, 1000 MW Noungpha, 200 MW Manthaung and 7110 MW Mountone projects.

Additionally there is the 4000 MW Yourthit project in Kayar state and the 1360 MW Hatgyi proect in Kayin state.

“It is just at the research stage. There are so many stages that need to be done in order to implement a hydropower project. But somepeople think we are starting and they want to protest against the projects for the sake of environment,” he said.

Chinese companies Hanergy Holding Group Ltd, Hydrochina Corporation, China Three Gorges Corporation (CTGC), China Datang OverseasInvestment Co, Ltd (CDOI) and Sinohydro Corporation have each signed a Memorandum of Understanding with local companies.

Thailand’s EGAT International (EGATI) is interested in a build operate transfer agreement with a local company and has already signed anMoU with local companies and investors.

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Thailand has begun to worry about its long term future power sources after it was announced on March 6 that the Yadana offshore block willstop exporting gas to Thailand from April 4 to 15 for some maintenance work, the official said.

“If we have no plan management to uncover the public for SIA and EIA, we will not continue the projects. This is a new era and everythingwill go on very openly and we will listen to what the people say,” he said.

There have been rumours that the excess water from the dams would flow to Thailand, causing activists from the country to demand theprojects be cancelled.

The Deputy Minister of the Ministry of Electric Power, U Myint Zaw, said at the sixth regular sectional meeting of the first Pyithu Hluttaw thatthe rumours are not true.

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Banking on satellite communicationsKang Wan Chern 10 Jan 2018

Yangon to build toll gates at 11 townshipsAye Nyein Win 10 Jan 2018

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1/12/2018 Myawaddy - Wikipedia

https://en.wikipedia.org/wiki/Myawaddy 1/4

Myawaddy မြဝတ

Myawadi

Main Street looking east

MyawaddyMyawaddy (Burmese: မြဝတ; Thai: เมยวด; RTGS: Mia-wadi; S'gaw Karen: မၣဝတၣ) is a town in southeastern

Myanmar, in Kayin State, close to the border with Thailand. Separated from the Thai border town of Mae Sot by

the Moei River (Thaung Yinn River), the town is the most important trading point between Myanmar and

Thailand. It is the second biggest among Myanmar’s 15 border trading posts.[1]It is 170km east of Mawlamyine,

the fourth largest city of Myanmar and 426km northwest of Bangkok, the capital of Thailand.[2]

Economy

Tourism

Places of interest

Health care

Bombing

See also

References

External links

The border-crossing is a major route for the export of Myanmar's gems,[3] many of which have their provenance

changed once across the border.[4]The Mae Sot to Myawaddy is the main border crossing trade route between

Thailand and Myanmar and according to Thailand’s Chamber of Commerce, the monthly trade between the two

countries in 2015– through the Mae Sot to Myawaddy crossing was worth over 3 billion baht.[5]

Coordinates: 16°41′16″N 98°30′30″E

Contents

Economy

https://en.wikipedia.org/wiki/File:Myawaddy_street.jpg

https://en.wikipedia.org/wiki/Burmese_language

https://en.wikipedia.org/wiki/Thai_language

https://en.wikipedia.org/wiki/Royal_Thai_General_System_of_Transcription

https://en.wikipedia.org/wiki/S%27gaw_Karen_language

https://en.wikipedia.org/wiki/Myanmar

https://en.wikipedia.org/wiki/Kayin_State

https://en.wikipedia.org/wiki/Thailand

https://en.wikipedia.org/wiki/Border_town

https://en.wikipedia.org/wiki/Mae_Sot

https://en.wikipedia.org/wiki/Moei_River

https://en.wikipedia.org/wiki/Mawlamyine

https://en.wikipedia.org/wiki/Bangkok

https://en.wikipedia.org/wiki/Provenance

https://en.wikipedia.org/wiki/Geographic_coordinate_system

https://tools.wmflabs.org/geohack/geohack.php?pagename=Myawaddy&params=16_41_16_N_98_30_30_E_region:MM_type:city



Location in Myanmar (Burma)Coordinates: 16°41′16″N

98°30′30″E

Country MyanmarDivision Kayin StateDistrict Myawaddy

DistrictTownship Myawaddy

TownshipPopulation(2014)

195,624

• Religions BuddhismTime zone MMT

Under the new agreement between Thailand and Myanmar

governments, travelers who cross the border from Myawaddy-

Mae Sot Friendship bridge are allowed to stay in Mae Sot areas

for seven days. The new agreement has been effective from

October 1, 2016.[6]

The crocodile temple (Myikyaungon in Burmese), anoutstanding piece of architecture with a 65m-long crocodile-shape building.

A giant standing Buddha

Golden bell tower complex (Shwe Muay Wan)

Neat entry gate

Outdoor market

Myawaddy District Hospital is a public hospital that serves

people in Myawaddy township and its surrounding

area.[7]Operation Theater Building for Myawaddy Hospital was

constructed by the Japanese Government under the Japanese

Government’s Grant Assistance for Grassroots Human Security

Projects (GGP).[8]However, local people are still used to cross

the border to seek help at Dr Cynthia Maung's Mae Tao Charity

Clinic in Mae Sot for better service.[9]

On 6 August 2010, a bomb exploded in the car park of a

crowded market in Myawaddy, killing two men and seriously

injuring four others.[10]

Myawaddy

Friendship Bridge linking Myawaddy withMae Sot.

Tourism

Places of interest

Health care

Border GateBombing

https://tools.wmflabs.org/geohack/geohack.php?pagename=Myawaddy&params=16_41_16_N_98_30_30_E_region:MM_type:city

https://en.wikipedia.org/wiki/Myanmar

https://en.wikipedia.org/wiki/Administrative_divisions_of_Myanmar

https://en.wikipedia.org/wiki/Kayin_State

https://en.wikipedia.org/wiki/Districts_of_Myanmar

https://en.wikipedia.org/wiki/Myawaddy_District

https://en.wikipedia.org/wiki/Myawaddy_Township

https://en.wikipedia.org/wiki/Buddhism

https://en.wikipedia.org/wiki/Time_zone

https://en.wikipedia.org/wiki/Myanmar_Standard_Time

https://en.wikipedia.org/wiki/UTC%2B6.30

https://en.wikipedia.org/wiki/Operating_theater

https://en.wikipedia.org/wiki/Government_of_Japan

https://en.wikipedia.org/wiki/Cynthia_Maung

https://en.wikipedia.org/wiki/Mae_Tao_Clinic

https://en.wikipedia.org/wiki/File:Myanmar_adm_location_map.svg

https://en.wikipedia.org/wiki/File:Thai-Myanmar_friendship_bridge.jpg

https://en.wikipedia.org/wiki/Mae_Sot

https://en.wikipedia.org/wiki/File:The_road_to_Myawaddy_through_the_Dawna_Mountains_37.jpg



(UTC+6.30)

Border Guard Forces

1. "Myawaddy Border Trade Continues Despite Clashes" (https://www.mmbiztoday.com/articles/myawaddy-border-trade-continues-despite-clashes). Myanmar

Business Today. Retrieved 2017-10-05.2. PCL., Post Publishing. "Bangkok Post article" (https://www.bangkokpost.com/print/783601/). www.bangkokpost.com. Retrieved 2017-10-05.3. Chien, Choo Tse (2004) "Border Areas & Into Burma Photo Gallery" (http://www.pbase.com/tsechien/into_burma_) at pbase.com, archived here (https://we

b.archive.org/web/20050209023855/http://www.pbase.com/tsechien/into_burma_) on 9 February 2005 by Internet Archive4. Naylor, Thomas (2009) "The underworld of gemstones Part II: in the eye of the beholder" Crime, Law and Social Change 53(3): 211–227,

doi:10.1007/s10611-009-9221-1 (https://doi.org/10.1007%2Fs10611-009-9221-1)5. "Traders Excited By Start of Construction of New Friendship Bridge Between Mae Sot and Myawaddy « Karen News" (http://karennews.org/2015/06/traders-

excited-by-start-of-construction-of-new-friendship-bridge-between-mae-sot-and-myawaddy.html/). karennews.org. Retrieved 2017-10-05.6. "Myawaddy-Mae Sot Temporary Border Crossing Permit Extended From One to Seven Days « Karen News" (http://karennews.org/2016/10/myawaddy-mae-

sot-temporary-border-crossing-permit-extended-from-one-to-seven-days.html/). karennews.org. Retrieved 2017-10-05.7. "Three flu suspects found in Myawaddy | Eleven Myanmar" (http://www.elevenmyanmar.com/local/11130). www.elevenmyanmar.com. Retrieved

2017-10-05.8. "Embassy of Japan in Myanmar" (http://www.mm.emb-japan.go.jp/profile/english/news/2016/new-19.html). www.mm.emb-japan.go.jp. Retrieved

2017-10-05.9. "The road to rural healthcare reform" (http://www.dvb.no/dvb-video/the-road-to-rural-healthcare-reform/61952). DVB Multimedia Group. 2016-04-19.

Retrieved 2017-10-05.10. http://www.irrawaddy.org/article.php?art_id=19164

Myawaddy travel guide from Wikivoyage

"Myawadi Map — Satellite Images of Myawadi" (http://www.maplandia.com/burma/kawthulei-karen/myawadi/myawadi/) at Maplandia

"Myawaddy Photos: Pictures of Myawaddy, Myanmar" (http://www.travelpod.com/photos/0/Myanmar/Myawaddy.html), TravelPod

Retrieved from "https://en.wikipedia.org/w/index.php?title=Myawaddy&oldid=817783041"

See also

References

External links

https://en.wikipedia.org/wiki/Time_zone

https://en.wikipedia.org/wiki/Myanmar_Standard_Time

https://en.wikipedia.org/wiki/UTC%2B6.30

https://en.wikipedia.org/wiki/Border_Guard_Forces

https://www.mmbiztoday.com/articles/myawaddy-border-trade-continues-despite-clashes

https://www.bangkokpost.com/print/783601/

http://www.pbase.com/tsechien/into_burma_

https://web.archive.org/web/20050209023855/http://www.pbase.com/tsechien/into_burma_

https://en.wikipedia.org/wiki/Internet_Archive

https://en.wikipedia.org/wiki/Digital_object_identifier

https://doi.org/10.1007%2Fs10611-009-9221-1

http://karennews.org/2015/06/traders-excited-by-start-of-construction-of-new-friendship-bridge-between-mae-sot-and-myawaddy.html/

http://karennews.org/2016/10/myawaddy-mae-sot-temporary-border-crossing-permit-extended-from-one-to-seven-days.html/

http://www.elevenmyanmar.com/local/11130

http://www.mm.emb-japan.go.jp/profile/english/news/2016/new-19.html

http://www.dvb.no/dvb-video/the-road-to-rural-healthcare-reform/61952

http://www.irrawaddy.org/article.php?art_id=19164

https://en.wikipedia.org/wiki/File:Wikivoyage-Logo-v3-icon.svg

https://en.wikivoyage.org/wiki/Myawaddy#Q615821

http://www.maplandia.com/burma/kawthulei-karen/myawadi/myawadi/

http://www.travelpod.com/photos/0/Myanmar/Myawaddy.html

https://en.wikipedia.org/w/index.php?title=Myawaddy&oldid=817783041

1/12/2018 Thai soft loan for two-lane project to seek parliamentary approval | The Myanmar Times

https://www.mmtimes.com/business/26666-thai-soft-loan-for-two-lane-project-to-seek-parliamentary-approval.html 2/10


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1. Home2. » Business3. » Thai soft loan for two-lane project to seek parliamentary approval

Thai soft loan for two-lane project to seek parliamentary approval

Thai soft loan for two-lane project to seek parliamentary approval

Su Phyo Win 04 Jul 2017Thai soft loan for two-lane project to seek parliamentary approval

The eighth Joint Coordinating Committee (JCC) meeting was held in Thailand on June 29-30 and has decided to seek parliamentary

approval in order to ask Thailand for a soft loan to fund the two-lane project.











If approved, a task force will be formed to assess and review the development and issues caused by Italian-Thai Development (ITD) over aperiod of three months. In addition, officials from the Japanese government will take part in future JCC meetings, said U Myint San, vice chairof Dawei Special Economic Zone’s management committee.

Commerce minister U Than Myint and Arkhom termpittayapaisith, Thailand’s transport minister, are the co-chairmen of the JCC.

It is the first time the JCC meets under the NLD-led government.

Under the previous administration, seven JCC meetings were held.

Since May 2015, Thailand has offered a 4.5 billion baht soft loan for the establishment of a new road and for upgrading an existing one to anASEAN-standard highway.

The two-lane road construction of 150 kilometres from Htee Khee to the Dawei SEZ has been carried out by the ITD but the firm has tocompensate the local community for the environmental and social disruption.

“The offer is a 4.5 billion baht soft loan with a 10 percent interest rate and a rest period for 10 years – altogether you have 30 years. But thisis up to the Myanmar government.

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“We have proposed this request for some time and it has been reconsidered by the NLD-led government,” the ex-Thai ambassador told TheMyanmar Times on February 22.

U Than Myint said to The Myanmar Times yesterday that the Dawei SEZ’s management committee has decided to get the soft loan. Hence,the committee needs to propose to the government’s economic committee, and then to the cabinet, and finally to ask parliament forapproval.

“The paper process of getting a final approval from parliament will take more than three months. The decision of getting a loan or notdepends only on the parliamentary outcome.

“Thailand has already decided who will be in the task force but Myanmar has to decide who to appoint within the next two weeks,” he said.

The new task force is to examine why ITD failed to implement the project on time and will decide ITD’s future involvement in the project andthe extent of the government’s support, U Than Myint said.

There are a lot of issues at stake with the developer in the initial phase. The ITD received a contract to complete nine projects within eightyears since 2010 for the initial phase of 27 square kilometres within the SEZ.

The ITD had stopped implementing the SEZ in 2013 due to financial constraints and community complaints regarding a lack of adequatecompensation.

U Myint San said that if the government receives the loan from Thailand, it will then be a Thai company which will construct and upgrade thetwo-lane project.

He added that the Myanmar government has decided the two-lane road to be a public road so the Myanmar government will take charge ofoperations and maintenance of the lane.

U Than Myint said that the reason of the new government for pushing the project forward is that the project will contribute to the economicdevelopment of the country, Thailand and the region as a whole.

1/12/2018 Planned Karen State Coal-Fired Power Plant Moves Ahead Despite Local Opposition | Myanmar Business Today

https://www.mmbiztoday.com/articles/planned-karen-state-coal-fired-power-plant-moves-ahead-despite-local-opposition 1/11

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Planned Karen State Coal-Fired Power Plant Moves Ahead Despite Local Opposition

Author: Aung Thant | 05 Jul 2017

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Greenpeace predicts Myanmar's air pollution could become worse than China's and India's

Photo Credit : David Gray/Reuters

Construction on a controversial coal-fired power plant in Karen State is expected to begin early next year after the government con firmed plans build a al most adozen such plants across the country late last month.

Thailand-based Toyo- Thai Corporation plans to build the coal-fired power plant in Hpa-an Town ship which would supply surrounding Karen State with electricity,said Nan Khin Htwe Myint, Chief Minister of Karen State.

Construction on the 1280 megawatt power plant would begin within the first four months of 2018 with coal to be im ported from Indonesia. The company says theplant would utilise “ultra-supercritical clean coal technology” to minimize environmental impact.

Despite assurances, nearly 150 civil soci ety organizations (CSOs) across the nation have denounced the power plant and have urged the government for transpar -ency over the project’s en vironmental impact.

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“I’m ready to receive any punishment from the public if there is some negative environmental impact from this plant in the future,” said the chief minister.

Environmental activ ist Dr Tun Lwin says the negatives impacts of coal-fired power plants far out weigh the positives.

“Coral-fired power is not a solution to supplying the nation’s electricity de mand. Myanmar has many renewable energy sources with vast potential to pro duceelectricity.”

According to a report re leased by environmental group Greenpeace earlier this year, pollution from coal-fired power plants could cause 280,000 premature deaths inMy anmar in the coming dec ades as the government relies more and more on the dirty fossil fuel to meet the growing energy demand.

The government has said coal-fired power plants will account for up to 30 percent of the na tion's electricity needs by 2030. Under the same plans, wind power willac count for 5 percent.

A 2014 proposal for a 1280-megawatt coal-fired power plant in Mon State by Toyo-Thai was sus pended after opposition from locals.

Myanmar Summary:

ကရငျပညနယ၏လ ပစစက႑ဖ႔ြၿဖးတးတကရနအတြကလအပေသာလ ပစစမးဓာတအားရရရနေကာကမးေသြးသးဓာတအားထတလပေရးစက႐စမကနးကဘားအၿမ႕နယ၀တႀကးရြာအနးတြငတယထငးကမၸဏကတညေဆာကမညျဖစေၾကာငးကရငျပညနယ၀နႀကးခပနနးခငေထြးျမငကဇြန၂၁ရကတြငေျပာၾကားသည။

အဆပါစမကနးသညလ ပစစဓာအားမဂၢ၀ပ၁၂၈၀ထြကရမာျဖစေၾကာငးဆနးစစခကမားကယခႏစကနထေဆာငရြကမာျဖစေၾကာငးစမကနးကလာမည၂၀၁၈ခႏစပထမေလးလအတြငးစတငအေကာငအထညေဖာမာျဖစေၾကာငးသရသည။

စမကနးက၂၀၂၀ပထမေလးလအတြငးအၿပးေဆာကလပကာႏငငေတာ ကေရာငးခသြားမညျဖစေၾကာငးကမၸဏတာ၀နရသမားကဂပနႏငင၏အဆငျမငနညးပညာသးစကပစၥညးမားျဖငတညေဆာကသြားမာျဖစေၾကာငး၀နႀကးခပကေဒသခမားကရငးလငးေျပာၾကားခသည။

ယငးစမကနးႏငပတသကၿပးေဒသခမားႏင၀နႀကးခပတ႔ေတြ႕ဆရာတြငလြတလပမႈႏငပြငလငးျမငသာမႈရရနလအပေၾကာငးေတြ႔ဆပြသညအဓပၸာယျပည၀သည လထေတြ႔ဆပြမဟတေၾကာငးကရငျပညနယအေျခစကအရပဖကအဖြ႕အစညး၃၃ဖြ႔ကကန႔ကြကလကၿပးထကန႔ကြကျခငးကတစႏငငလးရအရပဖကအဖြ႔အစညး၁၁၄ဖြ႔ကေထာကခလကသည။

ထစမကနးေၾကာငဆးကးျဖစလာပါက ျပညသျပစဒဏခယဖ႔အသငရေၾကာငးျပညနယ၀နႀကးခပနနးခငေထြးျမငကပတ၀နးကငဆငသကေရာကမႈဆငရာIA ဆနးစစေလလာျခငးလပငနးစဥအျဖစအထကပါရကစြတြငေဒသခမားႏငပထမအႀကမေတြ႔ဆေဆြးေႏြးပြတြငေဒသခမားကကတေပးေျပာၾကားခေသးသည။



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ျမနမာႏငငမာစစဥထားသညအတငးေကာကမးေသြးသးလ ပစစဓာတအားေပးစက႐မားတးခ႕တညေဆာကခမညဆပါကအဆပါေကာကမးေသြးစက႐မားေၾကာငလာမညဆယစႏစအတြငးလေပါငး၂သနး၈ေသာငးခန႔အထအသကေသဆးႏငေၾကာငးeenpeace သဘာ၀ပတ၀နးကငထနးသမးေရးအဖြ႔ကအစရငခစာတစရပကၿပးခေသာေမလကေဖာျပခသည။

ျမနမာအစးရဟာတငးျပညတြငးလ ပစစမးမလေလာကမႈက၂၀၃၀ျပညႏစမာအၿပးသတေျဖရငးႏငရနေကာကမးေသြးသးဓာတအားေပးစက႐စမကနးကအဓကအားထားမ၀ါဒခမတထားေၾကာငးသသည။

မးေလ၀သပညာရငေဒါကတာဦးထြနးလြငကေကာကမးေသြးသးဓာတအားေပးစက႐တညေဆာကျခငးႏငပတသကၿပးအခကရစခကျဖငေထာကျပခသည။ဦးထြနးလြငက လ ပစစဓာတဟာတငးျပညအတြကအလြနလအပတာကလကခေၾကာငးသ႔ေသာ ေကာကမးေသြးသညထခကမႈမားေၾကာငး(ရာသဥတ၊ကနးမာေရးစသျဖင)ပဆးသညမာျမနမာျပညကထြကသညေကာကမးေသြးမာစတတအဆငအတနးအစားမ႔ပၿပးညစညမးေၾကာငးေကာကမးေသြးစက႐လပမညဆပါကတာ၀နယမႈ၊တာ၀နခမႈေတြအမားႀကးလအပေၾကာငးလ ပစစရရနမာေကာကမးေသြးသညတစခတညးေသာနညးလမးမဟတေၾကာငးျမနမာႏငငမာလ ပစစရႏငသညRenewable Energy Source Potentialsေတြအမားႀကးရေနေၾကာငး Renewable Energyႏငပတသကသညေလလာမႈအစရငခစာအႀကျပခကေတြအမားႀကးရေၾကာငး Renewable Energyျဖစသညေနစြမးအင၊ေလစြမးအငမားသညကနဦးတနဖးအရငးအႏးမားေသာ လညးေရရညမာအျခားနညးလမးေတြထကကနကစရတသကသာေၾကာငး

(ဥပမာ WWF, REAM, GREENPEACEအစရငခစာမားစသျဖင) ေထာကျပခသည။

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1/12/2018 Japanese businesses express no interest in Dawei or Kyaukphyu SEZ | The Myanmar Times

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1. Home2. » Business3. » Japanese businesses express no interest in Dawei or Kyaukphyu SEZ

Japanese businesses express no interest in Dawei or Kyaukphyu SEZ

Japanese businesses express no interest in Dawei or Kyaukphyu SEZ

Thompson Chau 05 Jul 2017









https://www.mmtimes.com/author/thompson-chau



Katsuji Nakagawa, JCCM chair and country head of Sumitomo Corporation Group. Naing Wynn Htoon / The Myanmar TimesJapanese businesses express no interest in Dawei or Kyaukphyu SEZ

Interview with Katsuji Nakagawa from the Japan Chamber of Commerce and Industry in Myanmar

Japanese businesses have not indicated any interest in Dawei SEZ or Kyaukphyu SEZ, and see the lack of reliable power supply as the biggestchallenge in Myanmar, the chair of the Japanese Chamber said.

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Katsuji Nakagawa, chair of Japan Chamber of Commerce and Industry in Myanmar (JCCM) and country head of Sumitomo Corporation Group,spoke to The Myanmar Times about the concerns and development of Japanese investments and businesses on June 9 in his office.

In an honest revelation, he said that Japanese companies, unlike Western firms, do not face public pressure on human rights issues, and thatJapanese businesses in Myanmar have not expressed a desire to be involved in Dawei or Kyaukphyu SEZ.

After the “Conflict in Myanmar: Impact on Investment and Business” panel discussion on May 30 organised by the British Chamber ofCommerce Myanmar, Vicky Bowman, director of Myanmar Centre for Responsible Business told The Myanmar Times that investments inMyanmar are unlikely to be considered a reputation risk for Asian companies.

“Since the Rohingya issue is increasingly the dominant newspaper story about Myanmar in the media, not just in the West but in the region,this is colouring perceptions of the country and political risk.

“The difference is that Asian companies, unlike Western companies, rarely encounter shareholder and media activism on human rights, andtherefore investments in Myanmar are unlikely to be considered a reputation risk for them.

“The Chevron shareholders resolution which will be voted on at their annual general meeting on 31 May is an example of this. I doubt youwould see such a resolution facing an Asian company,” she said.

Ms Bowman was referring to the US-based Chevron resolution vote. A small number of shareholders at Chevron singled out Myanmar in aresolution vote on May 31, requesting Chevron to issue a report by the end of November 2017 examining the feasibility of adopting a policy




of not doing business with the Myanmar government.

The Myanmar Times asked the JCCM chair whether it is true that Japanese companies do not face the same public pressure on human rightsissues.

“I’ll tell you not [no]. No public pressure. No public pressure in Myanmar and no public pressure in Japan. Our headquarters in Japan also donot have the pressure,” Mr Nakagawa said.

Peace process impact on business “not so big”

Many commentators have argued that, given Trump’s shift in foreign policy and the reputation risks of western companies investing inMyanmar, Myanmar is tilting towards China, Japan and other Asian neighbours for investment and support. The Myanmar Times asked himwhether the Japanese investment approach is different from the Chinese or other Asian countries.

“I don’t see any difference. Myanmar is a new frontier market. Japanese companies are very keen to contribute to Myanmar society and to itspeople.

“Japanese businesses understand that Myanmar is a big potential market. Historically, we have had a good relationship with Myanmar,” hesaid.

He went on to say that, during former president U Thein Sein’s tenure, the Japanese government expected democracy and changes to takeplace in Myanmar, and supported private companies to venture into the market.

“Japanese government and private companies have started coming back to Myanmar during the military days. This is supported and initiatedby the Japanese government.

“The Japanese government knew that a new Myanmar government would come in soon.

“The NLD [National League for Democracy] party would win the election and a new democracy would start – the Japanese governmentunderstood and expected this prospect,” he added.

Mr Nakagawa expressed his bemusement as to why the US did not lift the sanctions during U Thein Sein’s tenure.

“At that time, the US still kept the sanctions on Myanmar under U Thein Sein’s government.



“I don’t know why – maybe they judge the situation very strictly, or maybe they couldn’t understand the situation well.

“But the Japanese government was aiming and expecting that democracy would be coming during U Thein Sein’s time,” he said.

The JCCM chair explained that major sectors which Japanese businesses are involved include agriculture, construction, logistics, services,banks and insurance and heavy industries.

But he added that heavy industries would take more time to develop, due to the lack of power supply and lack of clarity in regulations.

Yohei Sasakawa, Nippon Foundation chair, was appointed by the Japanese government as a special envoy for national reconciliation inMyanmar to engage exclusively to facilitate the peace and reconciliation process. Tokyo has taken Myanmar’s peace process very seriously.

When asked about the importance of peace process to foreign direct investment (FDI) climate, Mr Nakagawa said that the “effect” of peace is“not so big” for businesses.

“Of course, it [peace process] is an important issue. It is the first [top] priority for State Counsellor Daw Aung San Suu Kyi.

“But, for businesses, frankly, the effect is not so big,” he said, adding that the Japanese government has been very keen to support the causeand highlighting Tokyo’s humanitarian contribution.

The JCCM chair also named the lack of power supply as the biggest obstacle in doing business in the country.

No interest in Dawei expressed

Japan’s Prime Minister Shinzo Abe confirmed back in 2014 he would support the economic zone, a joint project between Thailand andMyanmar that aims to link the Andaman Sea to Bangkok and the Gulf of Thailand.

In February 2017, Tanintharyi Region finance minister and vice president of the Dawei special economic zone (SEZ) Management CommitteeU Phyo Win Tun told The Myanmar Times that Japan was becoming more interested in the project, which would likely restart soon.

But there has been no specific announcement on Japan’s investment in the zone.

Separately, the Myanmar government has asked the Japanese government for help in drawing up the Tanintharyi Region’s developmentmaster plan along with a comprehensive development plan for the Dawei SEZ.



The JCCM chair said that the chamber is not aware of any interest from Japanese businesses regarding the Dawei project. He said Japanesecompanies in Thailand might be interested, but not for businesses in Myanmar.

“Those companies [who have expressed an interest in Dawei] are working in Bangkok.

“But here in Myanmar, at least among JCCM members, we did not have any comments like ‘oh we want to support Dawei’.

“Maybe the situation is different in Bangkok. But the JCCM here does not have any comments on Dawei,” he remarked.

The same applies to Kyaukphyu project, according to Mr Nakagawa.

“Kyaukphyu – not so much. We have never heard of any Japanese companies supportive of Kyaukphyu,” he noted.

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1/12/2018 Glimpses of the Thailand-Myanmar border - New Mandala

http://www.newmandala.org/glimpses-of-the-thailand-myanmar-border/ 1/8

Glimpses of the Thailand-Myanmar border

INDR─Ч BAL─НAIT─Ч , GUEST CONTRIBUTOR - 01 SEP, 2012

My �rst direct encounter with Burma starts in Thailand. The overnight coach from Bangkok’s Morchit terminalto Mae Sot in the Northwest stops at several Thai army checkpoints where soldiers with bulletproof vests andsurgical masks survey passengers’ identity cards. With the �rst check in process, four people quietly slip off thebus and, once the of�cer is out of sight, equally discreetly return to their seats. In the early morning, we reachanother checkpoint, but this time they fail to escape on time and all four are escorted from the bus. As the onlywhite foreigner (farang), I am of no interest to the representatives of the Thai state – the of�cer motions not tolook for my passport. It will be a different story on the other side of the border.[1]

Mae Sot in Tak province, Thailand

Once in Mae Sot, nicknamed ‘Little Burma’, the futility of the “�ght against illegal immigration” is revealed.River Moei (called Thaungyin in Burma) serves as Thailand-Myanmar boundary between the Thai province ofTak and Myanmar’s Kayin (Karen) State. Border checkpoints are located on the opposite sides of the mightyThailand-Myanmar Friendship Bridge (opened in 1997), all fenced off with chicken wire. At the Thai borderpost, queues of people coming from Myawaddy on the Burmese side do not seem to die down the whole day.

http://www.newmandala.org/author/indre/



Below the bridge, a riverbank is complete with a concrete pathway and razor wire. Pairs and groups of people,many with thanaka paste on their faces, wearing longyi and carrying bundles scuttle in both directions past thefew shacks and makeshift vendor stands located in the dry stretch of the riverbed, on the other side of thespiralling razor wire. A short walk leaves the checkpoint behind a river bend and soon reveals the source anddestination of this commotion – a wooden staircase attached to the pathway. A step away a Thai soldier ischatting to someone, but nobody seems to care about him as people descend the staircase and squat by thewater waiting, their eyes �xed on a boat being loaded on the Myawaddy side. The boat arrives in a few minutesand quickly �lls up again.

http://www.newmandala.org/wp-content/uploads/2012/09/1-Queues-of-people-before-the-Thai-immigration-post-in-Mae-Sot.jpg



At least in the dry season, River Moei has never posed a formidable obstacle for the unceasing movement ofgoods and people. Even when the Myanmar government, annoyed at some Thai decisions, decides to ‘shut theborder’ (meaning the closure of checkpoints), petty trade goes on, although prices of Thai produce thusimported rise in Burma at such periods. Last time the border was closed between July 2010 and December2011 as the Myanmar government was allegedly worried that Thai construction of the concrete embankmentencircled with razor wire could affect the borderline[2].

http://www.newmandala.org/wp-content/uploads/2012/09/2-River-Moei-Thailand-Myanmar-border-houses-on-the-other-side-are-in-the-Burmese-town-of-Myawaddy.jpg



Back to the surroundings of the Friendship Bridge, Moei riverbank hosts a bustling market, hordes of songtaewminibuses and motorcycle taxis. It looks livelier than the centre of Mae Sot. However, even in the town centreitself traces of Burmese presence (probably more than half of the population) abound: longyis, thanaka makeup, Burmese eateries, signs in Burmese script alongside Thai and occasional English or Chinese, dif�culty to getby in Thai at times, buildings decorated with stars inspired by past and present Myanmar national �ags…

The predominantly Karen-Burman-Thai population mix is infused with people from further a�eld. For decades,dozens of Karen and Burmese exile organisations operating semi-of�cially in the town have been attractingvolunteers from developed countries sympathetic to the plight of the Karen insurgents and those displaced bytheir con�ict with the repressive Burmese military government. Local and international humanitarian aid NGOsemploying overseas staff have sprung up along the border since the 1980s to cater for the swelling refugeecamps on the Thai side. Both foreign staff and volunteers have helped to advocate organisations’ causes,including dissemination of information about the human rights violations in Burma.



In fact, foreign engagement with the section of the Karen (called Kayin in Burmese) speaking the Sgaw dialect

predated the civil con�ict that �ared up in 1949. 19th century British and American Christian missionaries in theKaren Hills brought a world religion, script, formal education and ideas of national consciousness that mouldedthe Sgaw Karen “imagined community”, eventually uniting them against Burman domination in the newlycreated Burma Union. Two centuries after the �rst Western missions, the international community is still morewilling to listen to the vocal Karen National Union (KNU) leadership (mostly Christian, Sgaw-speaking and well-versed in English) in exile in Thailand and its satellite organisations than to the ‘other’ Karen, namely thoseliving inside Burma[3], predominantly Buddhist, speaking other dialects such as Pwo and actually accounting

http://www.newmandala.org/wp-content/uploads/2012/09/3-Baskets-in-a-Mae-Sot-guest-house-remind-of-the-reality-across-the-border.jpg



for the vast majority of the Burmese Karen population[4]. Many Karen have stayed away from the Kareninsurgency, while others have aligned themselves with the Democratic Buddhist Karen Army, a splinter groupof KNU that has cooperated with the Burmese army since 1994.

Hpa-an (Pa-an) in Kayin State, Myanmar

Staff from Mae Sot-based NGOs talk of going ‘inside’ when travelling to Burma. Although adjacent to the Takprovince, the Kayin State (except for the border town Myawaddy) is not accessible for third-country nationalscoming overland from Thailand. When travelling to Kayin State from within Myanmar, the state capital Hpa-anand its surroundings are the only place that foreign tourists are allowed to visit. Given that due to the long-term civil con�icts similar restrictions exist along all Myanmar’s borders, the country is still physically closed offfrom the outside world, whereas the rest of South East Asia is crisscrossed by international railway and roadnetworks.



On the 6-hour bus journey from Yangon to Hpa-an I am again the only white passenger. This time it isspeci�cally because of me that the otherwise bored-looking of�cer with an Immigration badge on his uniformsleeve stops the bus after it has crossed the River Thanlwin (Salween). The of�cer heads straight to me, asksfor my passport and scrutinises my visa. Tourists are a recent occurrence in this region where Myanmar centralgovernment is eager to show it is in control despite contentious history: newly-installed billboards in the towncentre remind of the “three national causes” and the “true spirit of patriotism”; a clumsy colourful sculptureadorning a roundabout pictures a Karen couple with a victorious Myanmar Army (Tatmadaw) soldier. Whenasked about long-overdue peace talks with the KNU being held this year, many locals still sound cautious andmistrustful of the now nominally civilian government.

http://www.newmandala.org/wp-content/uploads/2012/09/4-River-Thanlwin-Salween-near-Hpa-an-Kayin-State-Myanmar.jpg



Unlike in Mae Sot, no foreigners live here and those staying for longer than sightseeing requires are suspicious.Also the town feels rather empty as a lot of the locals are working abroad. The Hpa-an region, mostly inhabitedby Karen people speaking the Pwo dialect, is where many of the Mae Sot migrant stories begin. Testimonies toemigration bound for Thailand are omnipresent. Newly constructed or extended houses funded by remittancessit side by side with modest bamboo huts thatched with palm leaves. A bunch of cheerful well-dressed womenvisiting the Kyauk Kalap stupa perched on a rock in an arti�cial lake are eager to show off their Thai skills totalk to me. So is my taxi driver. A woman running a street side stall with her two daughters turns out to havemet her Karen husband while working in Thailand. So has another woman who has recently come back to hernative village near Hpa-an after spending 10 years in Bangkok as a housemaid.

http://www.newmandala.org/wp-content/uploads/2012/09/5-Billboard-in-Hpa-an-Kayin-State-Myanmar.jpg

Burma’s natural resources. To theseinterests, Burma became a place to get richquick, and accordingly, many politicalfortunes in Thailand have rested on wealthfrom Burma’s natural resources.

Economic cooperation between the twocountries has been formalised with theformation of the Thai-Burmese Culturaland Economic Cooperation Association co-Chaired by Thai Deputy Prime MinisterChavalit Yongchaiyudh and Air MarshalKyaw Than of Burma. In late November2002 the go-ahead was announced for fourhuge projects in Burma to be carried out byThai companies, including a hydroelectricdam on the Salween River in Shan State anda large coalmine in Tenasserim Divisionopposite Prachuap Khiri Khan. Following ameeting of the association, which iscoordinating the projects, Deputy PrimeMinister Chavalit, an establishedbeneficiary of Burma’s natural resources, isquoted in the Bangkok Post as saying,“Joint development will make border areasmore open and help eliminate bad people,minority people and bad things hiddenalong the border and ensure greatersecurity.” He went on to say, “I am certainthat Thailand and Burma will be bestfriends forever. From now on, we will haveno conflicts or problems stemming fromdifferent viewpoints.”195

17.3 Thais prioritise logging interestsover support for ethnic insurgents

Before 1988, relatively small-scale logging was alreadyan important source of income for insurgent groups onthe Thai-Burma border. However, normalisation of theoverland trade in timber between Burma and Thailandbegan in 1988 when the SLORC gave four Thaicompanies logging concessions in insurgent areas. Thaicustoms subsequently opened at least 10 border passesto logging traffic.131

Later in 1988 on 14 December, General Chavalit, thethen Commander in Chief of the Thai armed forces,visited Rangoon with an entourage of over 80 militaryofficers, businessmen and journalists. The visit, comingshortly after the 1988 democratic uprising had greatpolitical significance. As General Saw Maung, theSLORC Chairman at the time, commented, GeneralChavalit became “the first foreign dignitary to visit usafter the new situation developed in Burma.”131 GeneralSaw Maung promised that Burma would give “abouttwo-thirds of trade and investment projects to Thailandbecause it has proven [to be] a true friend”.131 This visitresulted in 35 Thai companies being given 47 loggingconcessions and heralded the start of large-scale loggingon the border.131

In January 1989 after a series of natural disastersattributed to logging,196 which resulted in over 350deaths, the Thai Prime Minister, ChatichaiChoonhaven, announced a domestic logging ban. Soonafter, the Thai government stated that it would seekways to increase the import of logs from Burma andLaos to make up the shortfall.131

In May 1989 Lieutenant-General Than Shwe, thecommander of the Burmese Army, visited Thailand andtold Deputy Prime Minister Prapath Limphapandu thatBurma wanted to clear the border area as soon aspossible for ‘security reasons and for the mutual benefitof bilateral trade.’197 Now that the personal interests ofthe Thai elite were subject to continued cooperationwith the SLORC, Than Shwe could rely on a moresympathetic hearing for the SLORC’scounterinsurgency operations.

Soon afterwards, in a succession of night timemanoeuvres, Burmese troops crossed into Thailand,with the tacit approval of elements within the Thaigovernment, to attack Karen and other insurgent troopsfrom behind.17 At this time the border between TakProvince in Thailand and Burma was controlled byThai Army’s new Task Force 34, which had been set upby General Chavalit.17

Part Two: Logging in Burma / 17 The Thai-Burma Border

A CONFLICT OF INTERESTS 60

Chiang Rai

1

2

3

4

56

7

8

9

10

11

12

13

14

15

16 171819

20

2122

23

24

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Chiang Mai

Lamphun

Tak

Kamphaeng Phet

Samut Songkhram

Phetchaburi

Prachuap Khiri Khan

Chumpon

Ranong

Surat Thani

Ratchaburi

Kanchanaburi

Bangkok

Three Pagoda Pass

Mae Hong Son

Burma

Thailand

1 Thai Teakwood2 Boonsawad & Friends Enterprise Thai Sawad Import-Export3 Pathumthani Sawmill4 Thaiphong Sawmill5 Union Par6 Sirin Technology7 Santi Forestry8 Mae Sod Forestry9 Mae Moei Forestry10 Sirin Technology11 Zilar International Trading Company (ZITCO)12 Muangpana13 Pathumthani Tangkakarn14 Chumsin International15 Suwannee Industrial16 Sridenchai Suphanburi17 P.M.T.18 N & N19 Chaithanasarn20 Khumthong Sawmill21 Thip Tharn Thon22 Tanakit Timber23 Mae Sod Forestry Phaibul Pattana Ranong Victoria Point Chokephana24 Chao Phraya - Irrawaddy25 Sirin Technology26 Sirin Technology

© R. Reijers

SOURCE: KRAMER,T.(1994) “THAI FOREIGN POLICY TOWARDS BURMA 1987-1993”

17.4 The timber business and conflict on the Thai-Burma border

“Systematic and unsustainable felling was carried out inareas largely under the control of insurgent groups such asthe Karen National Army and the Mong Tai Army; both ofwhich, paradoxically, have been amongst the mostoutspoken in their denunciations of environmentaldestruction caused by the SLORC.” 17 Martin Smith, 1999

Logging along the Thai-Burmese border could not havetaken place without the various ethnic insurgents being‘compensated’ by the Thai logging companies. This ledto informal four-way trade agreements between theThai government, the Burmese government, Thaibusinessmen and insurgent groups.

Whilst Rangoon granted concessions, the loggingcompanies had to negotiate with one or more insurgentgroups and with other logging companies to operateunhindered on the ground. Insurgent groups taxed thecompanies demanding ‘passage fees’ in exchange forsafety guarantees. Soon after the concessions weregranted it was reported that of the 60 companiesoperating in insurgent-held territory, only half of themactually held concessions granted by the SLORC.198

Between 1988 and 1993, Thai companies paidbetween $200 and $240 per m3 of timber from theborder concessions. The regime itself earned $80 percubic metre, whereas insurgent groups, such as theKNU, are estimated to have been paid between $40 and$80. Other costs included $20 to the original loggingcompany, $12 to Thai Customs, $24 labour for fellingand $24 for transportation.9, 199

The logging companies initially paid the KNPPtransport fees of 1500 baht ($60) per tang (1.6 tons),which at the time they had littleoption but to accept. However, theKNPP later renegotiated this to 3000baht($120) in November 1989.x Inaddition the group earned a great dealof money from illegal logging inforests outside the concession areas.128

Mon insurgents were reported tocharge 3,000 baht ($120) in 1989 but by1990 they were charging 5,000 baht($200) per ton of wood for passage fees.At the Three Pagodas Pass passage feeswere paid to both the KNU and theNMSP.200, 201

According to the state-run newspaperThe New Light of Myanmar about150,000 tons of teak were smuggled out ofPapun, Mela (Mae La) and Wawle (Wale)regions annually between 1986 and 1994.The article also claims that 200,000 tons of“pyingadoe” (Ironwood), “in” and“kanyin” (Keruing) were smuggled

annually across the border from Phayathonzu toTaninthayi. The SPDC say that the KNU earned 400million baht, over $16 million, from this timber‘smuggling’ business; 65 million baht, over $2.6 million,from teak extraction in 1993 alone.187 It is not knownhow accurate these figures are. However, the articleappears to be blaming the Thai military, police andbusinesses for the forest destruction rather than theinsurgents. It goes on to say that the Thai companies paidthe KNU just $120 for each ton of teak, when the marketprice ranged from $500 to $800 per ton, for ordinaryclass, and from $2000 to $3000 per ton for special qualityteak.187 “Myanmar suffered much. But for Yodayas[Thais], they have gained more profits like the merchantswho buy stolen goods at low prices.”187

Insurgent groups claimed that they did not haveenough manpower to check whether logging companieswere cutting in their concession areas or to check howmuch they were cutting, and logging appeared to be out of control.

17.5 Thai Logging in Karen National Union territory

“The taking and retaking of ground in the thinly-populatedarea often has less to do with the Karen fight for autonomythan with the struggle for control over the region’s lucrativelogging business.”202 The Nation, May 1993

The Karen were prominent in the colonial forestryservice created in 1856, although they were barredfrom senior positions. In 1950, just one year aftertaking up arms, the KNU established a ForestryMinistry that used Karen foresters trained under the

British. The ministry was establishedalong colonial lines with a hierarchy ofposts ranging from guards and rangersin the field, through district andheadquarters conservators, to theMinister. The forests of Kawthoolei(the Karen name for Karen State)were divided into districts, withinwhich reserved forests were created,notably where teak was abundant.The importance of the ForestryMinistry grew according to theincreasing importance of the timbertrade compared with other forms ofincome such as taxing border tradeand mining. By the 1980s therewere 463 forestry officials workingin Kawthoolei’s forestry districtswith additional staff inMannerplaw, whose main task wasto administer teak extraction.They were also responsible forreforestation and wildlife


A CONFLICT OF INTERESTS61

Timber sale agreement between theGovernment of Kawthoolei (KNU) and ThaiField Marshall; July 1989.

x Conversion rates for 1989 $1=25 baht

protection. In the early 1990s 5,000 teak logs were saidto have been extracted from Kawthoolei, mainly fromPapun district.203 In the early 1990s, 80% of the KNU’sincome was derived from logging.203 The strength ofthe Ministry was reflected by the power of theForestry Minister Padoh Aung San second only toGeneral Bo Mya the KNU leader. The minister was aclose advisor to the general.

In February 1989, General Bo Mya declared that theThai logging companies, with SLORC concessions,would not be permitted to log in KNU-held areas unlessthe agreements with the SLORC were repudiated andnew deals agreed with the KNU. The KNU wanted toassert control over natural resources in areas under itscontrol, but was also concerned that the loggingcompanies, that had contracts with the SLORC, wouldinform on the movements of its forces. According to aformer KNU forestry officer, the KNU also deliberatelygranted concessions to overlap concessions granted bythe SLORC.204 By controlling access to the forest theKNU could engineer conflict between the Thai loggingcompanies, some of which were linked to Thaipoliticians who seemed to be vying to undermine theKNU and other Thai border based insurgents.204

At one point the KNU threatened to stop alllogging in a particular area but were warned byThailand not to interfere. General Chavalit stated that,“it may not be right for the minority group to obstructthings that are beneficial to the Thais.”205 Thailand alsothreatened to close the border, which would have cutoff the KNU’s source of income and supplies. This wasa reminder to the KNU that their future wasinextricably linked to the political and commercialinterests of others, beyond their control.203

In April 1989 the KNU announced that it hadgranted logging concessions, in areas under its control,to five logging companies making it clear that none ofthese companies had been given concessions from theSLORC. However the KNU also made it known that itwould permit these companies to sell timber tocompanies that did have SLORC contracts. Thai loggingcompanies with SLORC concessions had to subcontractto companies already operating in KNU territory, orother Thai firms without contracts from the SLORC.131

Padoh Aung San defected from the KNU in 1998when he surrendered to the SPDC. This happenedin the wake of the Salween Scandal, and amidallegations of corruption. A lot of the money thatwas earned by the KNU from logging wasmisappropriated and when the money was mostneeded large amounts that the KNU expected to call upon could not be accounted for. A sourcequoted in the Bangkok Post at the time claimed “He (P.Aung San) had a house in Mae Sot andChiang Mai and many shares with Thai Businesses…He had close links with former Thai militarypersonnel, influential people and businessmen alongthe Thai border.” 206

17.6 The end of SLORC logging concessions on theThai border

In early 1993 the SLORC announced that Thailogging concessions would be cancelled at the end ofthat year. The SLORC claimed that the main reasonfor this decision was concern about the adverseimpact on the environment that these uncontrollablelogging operations were having; the logging was asource of embarrassment to the regime that claimed itwould “never exhaust the resources without thinkingfor the future.”207 However, it was also clear thatinsurgents were capturing substantial income fromthe timber trade and that some logging companieswere providing arms and supplies to insurgentgroups.137, 128

Former Forests Minister, Chit Swe, said that grantingthe concessions on the Thai-Burmese border had been “afoolish mistake” that “produced no tangible benefit to thegovernment.”208 This might have been the view inside theForest Department, but the logging concessions hadproduced political, economic and strategic benefits forthe SLORC when they most needed it. However, since1988 conditions had changed and the regime could affordto cancel the concessions. The desperate state of theSLORC’s finances and the civil unrest it faced in 1988had improved and the SLORC was less willing to acceptthe trading terms and conditions that the 1988concessions entailed. The Thai logging companies hadbeen taking advantage of the SLORC’s relative lack ofcontrol, and general chaos on the border to break theterms of their concession agreements and essentially logwherever they wanted taking as much timber as theycould. Thai press speculated that Burma was using itscontrol over the lucrative concessions to manipulate Thaipolitics. The suggestion was that if businessmen lost outbecause of Thai government backing of the minoritygroups, public opinion would turn against the electedgovernment of Chuan Leekpai; the SLORC favoured amilitary government in Thailand.199

17.7 The Salween Scandal in Thailand

“Everyone knew what was going on – the scheme has beenwell-documented in the press – and everyone knew whowas behind it. But it was allowed to continue because theauthorities who had the power to stop it either did not careor were reaping the benefits of such illegal activities.Meanwhile, lesser officials who might have blown thewhistle were either murdered or threatened into remainingsilent.”209 The Nation, February, 1998

Since the early 1990s the Thai logging company STB,owned by Som Changkrajang, had exclusiveconcessions in several KNU-controlled areas. Both thecompany and the company’s owner are known by othernames: Sahavanakit (2499) Co. and Por Liang Somrespectively. The rise in STB logging interests in KNUareas is unclear, but it is thought that the KNU CentralCommittee wanted to reassert its control over finances



as earlier arrangements involving a number ofcompanies had resulted in money generated from thesedeals failing to arrive at the centre. Moreover STB wasprepared to pay the KNU in advance for the logs. TheSLORC has claimed that STB also supplied the KNUwith arms, ammunition and food.137 Interviewsconducted with former KNU officials suggest thatsome of the companies on the original KNU contractsresisted the takeover by STB resulting in two of thesecompanies’ employees being murdered on the orders ofthe STB Company.204

Successful SLORC offensives throughout the early1990s reduced the territory previously controlled by theKNU. As a result of these offensives STB wasincreasingly limited to where it could operate in Burmaand lost thousands of teak logs. This loss wascompounded by the fact that the logs had been paid forin advance. STB’s response was to begin logging in Thaiforests adjacent to areas they had worked in Burma,including the Salween Wildlife Sanctuary in Mae HongSon Province. This rampant illegal logging in thewildlife sanctuary took place between 1996 and 1998.

Since the logging was taking place in a wildlifesanctuary and there was in any case a logging ban inThailand at the time it was essential that the source ofthe timber be concealed; this was done in a number ofways. The logs were laundered either by transportingthem across the Salween River into Burma and then re-exported back to Thailand, or by simply obtaining thenecessary paperwork. The imports into Thailand werefacilitated by the Royal Thai Forest Department(RTFD) and labour came from the local refugee camps,some of which was organised by the KNU ForestDepartment.210

The scandal was not broken through any desire tosee due process or applying the rule of law; it waseventually exposed primarily because of a powerstruggle in Thailand, which had brought unwantedattention to the logging. In addition a bribery attempt,

intended to discourage furtherinvestigation, backfired. The deputyForestry Department chief, PrawatThanadkha, took a 5 million ($122,000)bribe from the STB logging company,and tried to hand the money over to thethen Thai Prime Minister ChuanLeekpai. The Prime Minister refused themoney and initiated an investigation. Itis generally believed that thisinvestigation would not have beencarried out under previous Thaiadministrations.

The result of the investigations wasthat six senior Royal Thai ForestDepartment employees were dismissedand several others were transferred todifferent offices. The deputy forestryChief and an STB timber trader wereprosecuted on bribery charges.211 The

RFD director general, Sahit Sawintara chose to betransferred. In an interview he was quoted as saying:

“There are many vested interests in the loggingbusiness and the RFD chief must deal with…poorlyequipped and disillusioned staff who are coerced intocollaborating with unscrupulous loggers; corrupt RFDofficials who care little about the country’s naturalheritage; and dark influences that reap the benefits fromthis situation.”212

Sahit went on to say that “A forestry official waskilled” because he stood in the way of these “darkinfluences.”212

The scandal had reverberations along the borderwith the KNU Forest Minister, Padoh Aung Sandefecting to the SPDC rather than facing corruptioncharges from the KNU.210 It is also possible he fearedbeing murdered by Thai mafia involved in the deal.204

Typically, disproportionate blame fell on the weakestgroups such as the refugees in Thailand. However, thejao por such as Som Changkrajang, government officialsand politicians remained relatively untouched. The15,000 Karen refugees that had taken refuge in theSalween Wildlife Sanctuary became the scapegoats forthe scandal and were forced to relocate to Mae Ra MaLuang and Mae Khong Kha camps.210

Research carried out in 2001 has since shown thatthe presence of refugee camps may actually contributeto the protection of the forest from illegal loggers whoprefer to work unobserved.210 In the Thung YaiNaresuan Wildlife Sanctuary, in Kanchanaburi and TakProvinces, observers of forced evictions have statedthat the eviction of Thai-Karen villagers from forestreserves is not done to protect the forests but so thatlogging activities can continue without hindrance andwith fewer witnesses.213 Many of the high-rankingofficials and businessmen involved in the SalweenScandal are still involved in illegal logging on the Thai-Burmese border.


Illegally logged timber on the Salween River, possibly from the Salween Wildlife Sanctuary; 1998.


17.8 Recent Logging on the Thai-Burma border

“The has been something of a pattern in Thailand’s logginghistory over the past three decades or so. An unexpectedscandal sets off profound anxiety that the nations forests areunder threat, and public concern is manifested in whatseems to be a national consensus: no more illegal logging.Then with three or four years, the same rituals return.”Bangkok Post April 19th, 1998

The illegal logging and the cross border trade in Takdescribed below have parallels to the ‘Salween Scandal’.The current cross border trade is also used to concealillegal logging in Thailand and today’s trade involvesmany of the same individuals. Residents on the borderconsider that illegal logging in Thailand is as much acause for concern as the drug trade214 but to date thetrade continues unabated.

Illegal logging in the forests of Tak, Mae Hong Sonand Kanchanaburi is widespread with the timber oftenbeing laundered through Burma (see Salween Scandal,page 62). To combat this problem the Thais introduceda log import ban in 1998 and the RTFD and the armysigned a cooperation agreement to protect Thailand’sforests. Under the agreement the army was given far-reaching powers as well as financial support215 but Thaibusinessmen either carried on as before, or simplyestablished new sawmills and furniture factories inBurma, near the border with Thailand, and the armyhas continued to facilitate the illegal imports. Thefactories use both Burmese timber, principally derivedfrom DKBA and KNU controlled areas, and illegallyfelled Thai timber. It is difficult to determine how muchtimber is from Thailand, but local sources have toldGlobal Witness that laundered Thai timber accounts forabout 10% of the timber imported from Burma216

although this figure is almost impossible to verify.Most of Thailand’s legal imports of Burmese timber

arrive by sea. The residual cross-border imports consistof finished or semi-finished products, such as furniture,doors, window frames and parquet flooring. This tradeis concentrated in the Thai provinces of Tak andKanchanaburi. The greatest volume of processed timberenters Tak Province, with Mae Sot, and the surroundingarea the principal point of import.

The furniture trade between Burma and Thailandhas existed since the 1970s.217 Moves were taken tolegalise it in 1999, following protests by timberimporters in Tak Province, by allowing the import of‘rare’ wooden furniture across 15 border passes.224 TheThai Forest Department claimed that this was a bid to


According to locals the sawmill had been closed for 4 years. Upon closer inspection it was found to be storing over 100m3 of processedteak, Mae Hong Son Province, Thailand; 2001.

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17.8.2 The Furniture Import BanIn December 2001, the Thai army chief, General SurayudChulanont is reported as saying that logs, processedwood and wooden furniture imported by Thaibusinessmen did not have certificates of origin issued byBurmese authorities and were therefore illegal.222 Hewent on to say that the Thai authorities must be carefulnot to allow such practices to continue or risk futureborder conflicts with Burma.222 It is not surprising thatthere were no certificates as most of the timber supplyingthis trade comes from DKBA or KNU controlled areas.

On 7 November 2001 Thailand banned the import offurniture into Tak Province.223 The Third Army, workingtogether with the RTFD, suspended furniture importsfrom four districts: Phop Phra, Tha Song Yang, MaeRamat and Mae Sot. The crackdown included theseizure, by Regional Police Bureau 6, of 2,500 teakwindows and 3,000 teak doors imported from Burma bya Thai businessman. As a result 200 furniture importersblocked Mae Sot, Tak Highway at Huay Ya Oucheckpoint in protest.224 However, in December 2001Global Witness saw that checkpoints manned by soldiersin the Mae Ramat District, Tak Province, were stillfacilitating the trade.216 In effect the crackdown presentedcorrupt officials with more opportunities to increase theunofficial taxes they imposed on Thai traders.

Illegal wood processing also takes place in Thailand.Following the November 2001 furniture import banPlodprasop Suraswadi, the then Director General of theRTFD, led raids on illegal sawmills on the border inThailand (Plodprasop was later moved from the RTFDto become the Permanent Secretary of the NaturalResources and Environment Ministry in late 2002). Heaccused local officials of being negligent in suppressingillegal sawmills and furniture factories.225 Commentingon one of the factories involved, he stated “It was thebiggest factory I’ve seen…it is located in the centre ofthe district so it is impossible that the local police did notknow about it.”

stop the smuggling of wooden products217 but it hassimply served to facilitate the smuggling of all timberspecies in processed form.

This cross-border trade is problematic for Thailandin two respects. First it exacerbates the problem ofillegal logging in Thai forests and second it has a directand adverse impact on border stability. Senior officialsin the Thai military have said that the trade is a directthreat to Thai national security, in particular because ofthe involvement of the DKBA.214, 218

17.8.1 The value of the cross-border timber tradeIn 2000 the Thailand press reported that there wereapproximately 100 sawmills along theMoei River across the border in Burma,but it is not known how accurate thisfigure is.219 These mills are producingprocessed products for a trade thatmembers of the Tak Chamber ofCommerce estimate is worth between$70,000 and $115,000 a day216 whilstbusinessmen involved in the trade claimthat it is worth $115,000 a day.220

It has also been reported that thefurniture trade accounted for more than$3.6 million in customs receipts in TakProvince for the year 2000.221 However, it isdifficult to determine the true value of thetrade because much of it goes unrecordedand many people have a vested interest ineither underestimating or overestimating itsimportance to the provincial economy.


Export of furniture from KNU controlled village opposite Mae Ramatduring the import ban imposed by Thai authorities in 2001.

DKBA-owned furniture factory in Kawkareik township, Pa’an district, Karen State; 2001.


The sawmill is operated by the wife of a localpoliceman225 and had been raided by forestry officials inJuly 2000 when 10,000 items of processed timber andfurniture were discovered. The provincial authoritiessuspended the operating licence of Thong Tharasawmill for illegal processing of timber and illegallogging.226 The factory was raided again in August 2000when the RTFD discovered it to be owned by MrsPatcharee, wife of Lt-General Mongkol Boonserm aformer officer attached to the Supreme Command.226

The Forest Industries Organisation (FIO) alsocontributes to the perpetuation of illegal logging inThailand. The FIO is responsible for auctioning illegaltimber but it is an open secret that the seizure of illegaltimber is frequently a charade: trees are logged illegally,local people are blamed, forestry officials confiscate thetimber and the FIO auctions it off cheaply to the jaopor and illegal loggers.227

Being involved in illegal logging has far more seriousconsequences for those who are not protected by theirstatus. At the beginning of April 2002, for instance, aThai military patrol shot and killed two hill tribevillagers in Tak’s Tha Song Yang district. The armyclaimed that the two men were shot after they openedfire on soldiers that were on the look out for logpoachers. Villagers claimed that the group was notcarrying firearms and were equipped only with saws andold knives and were cutting wood for household use.228

It is not only the Thai military that are armed. Inlate 2002 weapons previously held by Thai forestrydepartment personnel were transferred along with staffto the new National Park Department. This transferincluded 7,000 people, reducing the forest departmentto 1,000, and 13,000 rifles and pistols.229



17.8.3 Sia HookLogging activities and the cross border trade in timberaround the Moei River in Tak Province is largelycontrolled by leading figures in the provincialadministration, Thai politicians and in particular by Sunthorn Ratsameeruekset, otherwise known as Sia Hook.

Not only has Sia Hook been involved in illegallogging230 and illegal encroachment into reservedforests230 in Thailand but his employees have beenlinked to the supplying of drug precursors to groupsallegedly including the ‘Red Wa’ (UWSA – formercommunists) in Burma close to the Thai border.231 Mostrecently, in June 2002, he came under scrutiny inrelation to a politically motivated murder inKanchanaburi, where his son, Rangsan is the municipalmayor.232 Around the same time a school bus wasattacked by gunmen in Ratchaburi province, south ofKanchanaburi, killing two students and injuring 13others. The suspected gunmen were thought to behiding at a rubber plantation owned by Rangsan.233 TheThai press reported that incident occurred because thebus driver had failed to settle a debt of 100,000 baht($2,350) to Karen combatants in Burma that related toillegal cross border timber trade including timber.234, 235

On the business side Sia Hook has been linked toChoon Tangkakarn (Sia Choon) and his son Boonkiat,owners of Pathumthani Tangkakarn and representativesof Thai Teakwood Veneer logging companies, throughSia Hook’s association with Pathumthani Sawmill. TheThai Teakwood Company is part of a group of loggingcompanies including Thai Pong Sawmills, PathumthaniSawmills, and Pathumthani Tangkakarn. ThaiTeakwood Veneer Co. Ltd, Pathumthani Sawmill Co.Ltd, and Pathumthani Tangkakarn Co. Ltd share thesame telex numbers and it is possible they are one in thesame company.236, 237

Both Thai Teakwood Veneer and PathumthaniTangkakarn were awarded logging concessions by theSLORC in areas controlled by opium warlord Khun Saand his Mong Tai Army. Both these concessions, andPathumthani Sawmill itself are linked to Kyaw Win,founder and Chairman of the Myanmar MayflowerBank.238 Kyaw Win and Choon Tangkakarn are knownto have been business partners.171 Kyaw Win is thoughtto be chairman of both Pathumthani Sawmill Companyand Chin-Su Mayflower Plywood Industry.238

According to press reports then SLORC armycommander of Shan State, Major General Maung Ayewas also in on the deal; Maung Aye has since been madecommander of the entire Burmese army.171

Mayflower Bank has been associated with drugtrafficking and it is reported that Kyaw Win is on awatch list of the US Drug Enforcement Agency.239 Thebank also holds the zinc mining concession in MawkhiTown opposite Thailand’s Tak Province.240

It is clear that Sia Hook is a very powerfulindividual. In April 1991, for instance, Thai authorities

A piece of furniture, made in Burma opposite Mae Ramat Districtawaiting collection during the 2001 ban on cross border imports offurniture from Burma.



in Sangkhlaburi Province stopped the delivery of allfood and medicine to more than 10,000 Mon refugeesfollowing the destruction of a log truck belonging toPathumthani Company, by Mon forces the previousFebruary. The driver, who was killed, had apparentlyentered Mon territory. Deliveries to the five refugeecamps only resumed after the NMSP had agreed to paya fine of 800,000 baht ($32,000) in logs toPathumthani.131

Historically, Sia Hook’s influence has been strongestin Kanchanaburi Province. He operated a nearmonopoly on logging in areas under the control of theKNU’s 4th Brigade, opposite Kanchanaburi andRatchaburi province between 1989 and 1997 andpossibly before the SLORC granted loggingconcessions.241 However as a result of the SLORC’s

1997 dry season offensiveagainst the 4th Brigade itis thought that he lostsubstantial amounts oftimber and access toforests previouslycontrolled by the KNU.A source close to theKNU has claimed thatSia Hook once offeredhimself as a mediator inthe ceasefire talksbetween the KNU andthe regime.242 The joke atthe time was that theKNU thought that therewas not enough timberin the whole of KarenState to pay for SiaHook’s services.242

Sia Hook’s logging trucks had been used to transportKaren refugees fleeing the SLORC advance. However,when they arrived in Thailand male and female Karenrefugees were separated and trucked to areas close to theborder that were not safe from SLORC attack. In onerecorded case in 1997 Thai Border Patrol Policescreened refugees and refused entry to 500 boys andmen between the ages of 15 and 55 years.243

It should be noted that he has close links to all sidesin the conflict. Mon insurgents claim that Sia Hookcollaborated with SLORC to transport troops into battleagainst the MNLA in the 1990 battle for Three PagodasPass. He also had excellent relations to General SitMaung, once a frontline commander at the ThreePagodas Pass who went on to become the regionalcommander of the South East Command until he died in

a helicopter crash in 2001.In the late 1990s,

following the SalweenScandal (see page 62) andlosses in KNUcontrolled forests he isthought to have extendedhis field of influence intoTak Province. Sources inTak claimed that SiaHook used thedisruption of the scandaland his connection to theSTB Company toestablish himself in Takwhilst STB proprietor,Por Liang Som avoidedattention. Opinion isdivided as to whether ornot he still deals with theKNU: Global Witnesshas been told by sources

One of Sia Hook’s log trucks, KNU 4th Brigade area; mid 1990s.

Karen National Liberation Army soldiers at the Headquarters of 7th Brigade. The four principles of the KNU’sfounder Saw Ba U Gyi are on the notice board. The KNU is the largest insurgent army not to have signed aceasefire with the Burmese government.

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close to the KNU that no such link remains, otherssuggest that he is still involved in logging in KNU-controlled areas opposite Tak.241 It is also thought thatSia Hook has made several attempts, within the last fewyears, to use Karen refugee labour to work insideBurma opposite Ratchaburi province where old logs arestranded.244

Despite Thailand’s logging ban, Sia Hook has twolarge and prominent sawmills in Kanchanaburiprovince241 and in 2001 and 2002 his log trucks wereespecially active in and around Tak, near the Burmaborder.295 Global Witness has been told that Sia Hookhas MTE logging concessions in Burma and is possiblyoperating under the name Kanchanaburi SawmillCompany. He is also involved in furniture importthrough the Three Pagodas Pass, and in log export fromthe Burmese ports of Ye, Tavoy and Mergui.241 Over theyears, Sia Hook appears to have maintained goodrelations with the SPDC.

An anonymous report written by western aidworkers claimed: “The push to repatriate the refugees inthis area of the Thai-Burma border [KNU 4th Brigade

Area, opposite Kanchanaburi and Ratchaburi] asquickly as possible is perhaps related to massive businessinterests involving logging, road construction and thedevelopment of Tavoy as a deep sea port for Thaiexports.”243 Sia Hook has business interests in all ofthese and he is an adviser to the KanchanaburiIndustrial Council.245 The council is involved in the $28 million Kanchanaburi-Tavoy Road.241 The contractto build this road was given to the Kanchanaburi-TavoyDevelopment Co. Ltd, which according to projectdocuments246 was to begin logging, clearing forest andbuilding the road in March 2001.

General Chettha Thanajaro, the former SupremeCommander of the Thai Army, has been described as a‘consultant’ for the Kanchanaburi Industrial Council.246

When General Chettha Thanjaro was Commander ofthe First Region, he was integral to the opening up thelogging trade on the Thai-Cambodian border. At thetime he was quoted as saying: “We should start loggingin Cambodia, the price should be very cheap. Let it betruly Khmer timber, don’t let them cut ours.”247 GeneralChettha is currently a Thai-Rak-Thai MP.

Another of Sia Hooks log trucks travelling on the Mae Sot – Tak highway; 2001.

The gates of one of Sia Hook’s sawmills near Kanchanaburi, Tak Province, Thailand; 2001.

17.8.4 The problem of ‘Old Logs’The issue of importing old logs from Burma emerged inabout 1996. Old logs come in two forms: those thathave been cut for some time and those that have yet tobe cut. The former type of old logs, in the Thai/Burmacontext, are those that companies with SLORC-eralogging concessions were forced to abandon because offighting, or logs that have been seized from insurgentgroups by the SPDC.248 In the latter case a request tocollect and/or import ‘old logs’ is used as an excuse forrenewed cutting and the logs in question do not in factexist at the time the request was made.

Undoubtedly there have been genuine old logs onthe Thai/Burma border but their true volume is notclear. In February 2000 1,400 Karen refugees weremoved from a temporary camp in Ratchaburi districtand this appears to have been related to the presence of70,000 logs left across the border.249 People are oftenmoved not because they are really causingenvironmental damage to the area, but because theirpresence makes illegal activities less viable. Many oldlogs have already been moved or destroyed. In 2001 theKarenni National Peoples Liberation Front (KNPLF),an SPDC-allied ceasefire group, rebuilt a road near theThai border and removed logs that were previously cutby the Pathumthani and STB companies during the eraof official logging concessions. Karenni sources statethat the SPDC allowed the KNPLF to remove the logsbecause it was unable to remove the logs itself, but alsoto create tensions between the KNPLF and theKNPP.250 In May 2001, the Polpanna Company wasreported to have lost 1,000 logs in a ‘bushfire.’251


In March 1999 Thai log importers threatened to suegovernment agencies if they prevented the companiesfrom bringing in 1.41 million m3 of timber, worth morethan 30 billion baht ($810 million),y from Burma.252 InJuly 1999 the Bangkok Post reported that the Polpana,B&F Goodrich, SA Pharmaceutical, and SongkhraoSahai Ruam Rop Kaolee (Thai-Korean War VeteransWelfare Co.) companies had asked permission to importup to 1.5 million Burmese logs.253 It is not clear if thisarticle was referring to the same logs, but this is likely.Some logs were exported but not in such largequantities. In any event it is Global Witness’ view thatthe majority of the logs never actually existed.Permission was sought to import 60,000 m3 fromBurma through Mae Hong Son Province again in 2000.The four Thai firms involved in this case were Polpana,B&F Goodrich, SA Pharmaceutical and Thai-KoreanWar Veterans Welfare Co.254

Global Witness first came across SAPharmaceutical in 1996 when it was involved in asimilar scam to import ‘old logs’ from Cambodia. Logexports from Cambodia had continued until January1995 when the Royal Government of Cambodia(RGC) imposed a complete log and sawn timberexport ban. This ban was breached on numerousoccasions because Thai logging companies, using thepretext that the ban had stranded logs that had alreadybeen cut, successfully lobbied for ‘exceptions’. Theseexceptions took the form of a special permissionissued by the RGC allowing the companies to export‘old felled’ logs. The loggers would, in fact, enterCambodia and fell new logs. Typically a few months

The Kayah Pu Logging Company’s Hpasawang logging area.

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later the loggers would call for another exception,export more logs, and so on. As can be seen above, thepattern was later to repeat itself in relation tocompanies operating in Burma; some of which hadpreviously been logging in Cambodia.

In April 1996 Global Witness obtained documentsauthorising the export of 1.1 million m3 of logs fromCambodia to Thailand. The ‘Million Metre Deal’consisted of three letters signed by Cambodia’s co-Prime Ministers to the Thai Prime Minister, BanharnSilpha Archa. Further to a meeting between Cambodia’sMinister of Agriculture Tao Seng Huor and ThaiDeputy Prime Minister Chavalit, Cambodia had agreedto export 1.1 million m3 of ‘old felled’ logs to Thailand.All the logs were in Khmer Rouge (KR) held territory,making verification of their existence impossible.Global Witness’ investigations, however, showed thatthe loggers were in fact cutting to orderand paying the KR between $35-90 per m3.SA Pharmaceutical had been formedspecifically to take advantage of this quota-based deal and was in reality the samecompany as Pipat Forestry. In 2001 Pipatwas seeking logging deals with Wa ceasefiregroups in the Kengtung area of eastern ShanState241, but it is not known whether or notthese deals were ever sealed.

Whether or not companies are permittedto import ‘old logs’ from Burma has become ahighly charged political issue in Thailand.When Plodprasop Suraswadi, the Director-General of the RTFD, investigated loggingcompanies’ ‘old logs’ claims in 1999 he foundserious discrepancies, which led him to doubtthat all the timber was from Burma.255 Thelogging companies, for their part, claim that theimport ban is causing them to lose money andthat they have paid the SPDC more than 20million baht ($463,000) over the years in concessionrenewal fees and other expenses.248

In February 2000, the Director-General claimed tohave received death threats from logging companiesfrustrated by his department’s stringent import controlson ‘old’ Burmese logs. The RTFD was reluctant toallow the import of these logs as it was again concernedthat the logs came from Thailand’s forests. Reports inthe Thai press at the time claimed that an assassinationattempt on Plodprasop Suraswadi was planned to occuron his visit to inspect the logs in Burma.256

This attempt would be covered up as a clash betweenthe Burmese military and ethnic insurgents.257 The pressreports also claimed senior politicians were involved inthe plot but did not elaborate.257

Later, attempts were made to transfer PlodprasopSuraswadi from the RTFD to the Ministry ofAgriculture; to an “inactive” post of Deputy PermanentSecretary for Agriculture.258 According to the Director-General this was linked to the RTFD’s Burmese log

import ban,259 his firm stance against the smuggling oflogs from Burma and the related crackdown in TakProvince. The Deputy Agriculture Minister, PraphatPanyachartrak denied that Plodprasop’s transfer wasrelated to log imports260 but the Director-General’splanned replacement, Dhammrong Prakorbboon, whodenied having links with the logging industry,261 hasstated that he would open up the Salween WildlifeSanctuary for the transport of logs from Burma.261 InApril 2003 it was reported that there were plans to haul2,000 teak logs from the Salween Wildlife Sanctuarythat had been impounded in 1997.262

There is also speculation Plodprasop’s planned movewas connected to his ongoing investigation into the

activities of Chuchart Harnsawat, the brother of theAgriculture Minister, for alleged encroachment into anational park in Kanchanaburi Province.263 GlobalWitness is not aware of the outcome of thisinvestigation. However in April 2002, following aperiod of intense lobbying, Plodprasop was allowed tostay as the Director General until October 2002.264 Hesubsequently became the Permanent Secretary of theMinistry of Natural Resources and Environment andwas eventually replaced by Verapan Sriboonlue.

Logging companies claim that there are currently asignificant number of logs opposite Mae Hong SonProvince and Ratchaburi Province. Four of thesecompanies, the Korean War Veteran Association, S.A.Pharmaceutical, B&F Goodrich and PolpanaCompany,265 are trying to import over 50,000 m3 oftimber from Burma. By March 2002 two of thecompanies were in negotiations with the MTE.248

The Million Metre Deal.

18 KAREN STATE

“The government of Burma also has forest acts. But theBurmese military regime has in its plan a strategy toeliminate the Karen people and so it uses loggingconcessions as a strategic tactic. The SPDC has givenpermission to the DKBA, private enterprise and its ownunits in those areas saying ‘We can reforest after deforestation,but it would be difficult to reform a government after its fall’”127

Karen Environmental and Social Action Network (KESAN), 2001

The Karen are the largest ethnic family in SoutheastAsia that have not gained recognition as an independentnation state.4 Karen identity was significantly shapedduring the colonial era when many joined the colonialarmy and large numbers converted to Christianity. Ithas been argued that the identification by many Karenwith social and political advances under the Britishadministration was the beginning of a dangerous ethnicpolarisation between Karen and Burman communitiesthat has continued to the present.4 A series of violentevents during and shortly after the Second World War,when government militias killed several thousandKaren, deepened the level of mistrust between theKaren and the dominant Burman majority.

18.1 The Nature of Conflict in Karen State

“There’s no question, the Burmese are out to crush theKaren because of the goldmine they are sitting on.”266 Anon,

diplomat, April 1989

The Karen have been calling for an independent KarenState since the 1930s. But this did not result in full-scaleconflict, between Karen forces and the government, untilJanuary 1949 when the government outlawed the KarenNational Union (KNU) and Karen units defected fromthe Burmese Army. The 1947 Constitution was “riddledwith anomalies,”4, Karen State had not been demarcatedand there were serious disputes about where theboundaries should lie. In particular the Karen leadershipwas unhappy with a proposal that would give it controlonly over the portion of the eastern hills and no politicalrepresentation in the Irrawaddy Delta area where a largenumber of Karens lived. But by June 1949 the KNU hadestablished the Karen Free State of Kawthoolei, whichincluded areas in the Irrawaddy Delta, Pegu Yomas,Tenasserim, and the town of Insein just outside Rangoon.

Many areas in Karen State continue to be beset byviolent conflict, which is characterised by low-levelguerrilla activity by armed opposition groups andoffensives and forced depopulation by the SPDC. The mainprotagonists in the conflict, in addition to governmentforces, are the Democratic Karen Buddhist Army (DKBA)allied to the SPDC and the KNU. In addition there areseveral ceasefire groups that have split from the KNU. Allof these groups are motivated, to varying degrees, bypolitical ideologies and economic interests. The fight, inpart at least, over natural resources has led directly tohuman rights abuses and environmental degradation.

18.2 The Karen National Union (KNU)The KNU, formed in 1947, is the largest insurgentgroup in Burma not to have agreed a ceasefire.However after initial territorial gains it has graduallylost ground to government forces and has not held atown since the 1950s. The Four Cuts counter –insurgency campaign (see page 19) began in 1964 in theIrrawaddy Delta, spread to the Pegu Yomas Mountainsand continues today. This campaign marked thebeginning of widespread internal displacement in KarenState and led to the first wave of Karen refugeescrossing to Thailand in the mid 1970s.

The KNU retreated towards the mountains nearThailand where it established a ‘liberated zone’ along a400-mile stretch of the border. From 1974 to 1995,Mannerplaw near the confluence of the Salween and the Moei rivers was the headquarters of the KNU. Afterthe DKBA split from the KNU, and the SLORCoffensives between 1995 and 1997, the KNU stoppeddefending fixed positions and re-adopted guerrilla tactics.

The economy of the KNU was based on the bordertrade between Thailand and Burma upon which it levied a5-10% tax. The trade consisted of value-added consumergoods being imported into Burma and raw materials,including teak, cattle, precious stones and minerals goingto Thailand. The BSPP isolationist policies prohibited thelegal import of these goods, so they were only available onthe black market, mostly via the insurgent-controlledborders. The KNU established trade gates in 1964 throughwhich between one and two million baht ($40,000 and$80,000 at an average exchange rate in the 80s of 25 baht tothe dollar) of trade passed daily. Not only did this crossborder trade finance the ethnic insurgencies, it also mademany Thai businessmen and military officers rich.

At first sight the border trade would appear to havebeen disadvantageous to the BSPP/SLORC but it didhave strategic military implications that wouldeventually undermine the KNU: it tied KNU forces tofixed positions that were easier to attack and meant thatother areas were left largely undefended. It is alsothought that there have been disputes within the KNUover control of the border trade and logging operations,and the proceeds which some thought were unfairlydistributed (one of the factors that lead to the formationof the DKBA) (see page 72). From 1984 theBSPP/SLORC increasingly attacked the KNU’s bordertrade gates and by 1988 income from this trade wasdown by around 60% at several of the gates.267

Much of the border trade has been formalised butthe smuggling of many goods still banned by the SPDCis now largely controlled by the DKBA who controljetties and warehouses near the border. The view of oneprominent SPDC official is that the KNU and otherinsurgents along the Thai border are “basicallyeconomical bandits, who are living off the people byintimidating them with acts of terror, while enjoying thesupport of the western democracies who are supposedlywaging war on terrorism.”268

Part Two: Logging in Burma / 18 Karen State



18.3 The Democratic Karen Buddhist Army (DKBA)

“Rangoon has promised that if we, the DKBA, can driveKaren refugees living in Thai camps back to Burma, it willreward us with vast border areas and the freedom to ruleKarens. To help us become self-supporting, the Burmesegovernment promised to open cross-border trade betweenThailand and the DKBA.”269 To Hliang, DKBA commander, 1998

“We are not fighting against Burma, but we will retaliateagainst the DKBA because Burma lets the DKBAadminister that area, which is rich from logging, miningand drug producing,”270 Thai Army General Wattanachai

Chaimuanwong, former commander of the 3rd Army region, May 2001

“The [other] main motive for the attacks stems from theloss of lucrative profits from illegal business”…. “Thailand’scrackdown on illegal logging and untaxed goods along the border have enraged the DKBA and other interestgroups, and so they are staging sabotage activities on Thaisoil in an attempt to force Thai authorities to stop blockingtheir businesses.”269

The DKBA was formed in 1995 as a breakaway group from the KNU under the leadership of UThuzana, a Buddhist monk. The precise cause of thesplit is difficult to determine, but certainly is satisfactionamongst the, predominantly Buddhist, rank and filewith the mainly Christian leadership and lack ofprogress towards peace played a part.271 Many observersalso believe the split was engineered by the SLORC.

The DKBA quickly established an alliance withSLORC, making requests not only for protection fromthe KNU but also for help in attacks against the KNU.The SLORC obliged and in return the DKBA acted asguides in successful SLORC offensives. DKBA supportwas instrumental in the attack that led to the downfallof the KNU’s Mannerplaw headquarters in 1995 and itsgeneral decline since.

The DKBA also gave the SLORC detailedinformation into the ways that Thailand assisted theKNU.204 Although the SLORC knew much of this

already, specific details were used to further underminethe KNU position by applying selective pressure onThailand, for example, by restricting border trade.

From 1995, with the apparent complicity of parts ofthe Thai government, led by General ChavalitYongchaiyudh, the DKBA repeatedly attacked Karenrefugee camps in Thailand. In 1997 Burmese troopsguided by DKBA rebels burned three refugee camps nearMae Sot leaving 10,000 people homeless.272 The SLORCand DKBA claimed the refugee camps were used by theKNU; other accounts report that families of DKBAtroops were kept hostage in the camps.193

The DKBA largely became a proxy army of theSLORC but there is said to be a mutual lack of trustand respect between them. At the outset the SLORCsupplied the DKBA with rations, money, weapons andammunition. However, the SLORC stopped payingsalaries in 1996 and also cut back on rations, so underits own initiative the DKBA has engaged in trade andestablished businesses, some legitimate and some illicit.

The majority of DKBA income comes from logging,cattle smuggling, black market goods, and trading stolenvehicles from Thailand. There is evidence to suggest thatthe DKBA is involved in the distribution of drugs,specifically amphetamines (yaa baa), that have a largemarket in Thailand.216, 293 In 2001, a close observer of theborder near Mae Sot explained that Burma had prohibitedthe import of 32 trade items from Thailand, and that thesegoods had since become a major source of income for theDKBA who supervised imports into Burma, with thetacit approval of the SPDC.216 Like most other groups inBurma, the DKBA also establishes roadblocks and taxesvillagers. Examples from logging suggest that manyDKBA business activities rarely, if ever take placewithout partnership with various SPDC officials.

The DKBA is organised into four brigades: 333based in Thaton, 555 in Northern Pa’an, 777 in Papunand 999 the largest brigade based at KoKo on the Moei

A village built on sawdust. There are hundreds of small sawmills in Wa Le town controlled by the DKBA.

CONFLICT OF INTERESTS 72

River, north of Myawaddy, the Burmese border townadjacent to Mae Sot. The main centre of activity isaround Khaw Thaw, on the Salween River upriver fromPa’an Town, but recent reports suggest it operates as farsouth as Southern Dooplaya District.250

The command structure of the DKBA is said to bevery weak with small local DKBA groups acting ontheir own initiative or following the orders of SPDCofficers.273 The character of units depends on theirleaders with some DKBA commanders said to act aswarlords, whilst others apparently provide genuineprotection for people in their areas.273 Most accountssuggest that the DKBA has failed to deliver on earlierexpectations and that there have been many defectionsof DKBA combatants back to the KNU or to civilianlife, which has altered the constitution of the DKBAthat originally comprised of KNLA combatants.

18.4 Logging in Karen State

“A couple of weeks ago in […] z, KNU and SLORCallowed a Thai trader to cut down trees for timber, windowframes and furniture. They both get tax from him, abouttwo million baht per month. So DKBA soldiers went to theThai trader and asked for tax, but the Thai trader said, “Ialready pay SLORC and KNU, so I have no money togive you”. Then the DKBA soldiers went to SLORC andSLORC said, “Why did you go and ask for tax?” SoDKBA said, “You and KNU earn money, so DKBAshould too”, but SLORC said, “Don’t do that.” We werevery angry with SLORC. Then SLORC sent a message toKNU saying, “If you see anyone going to bother thetrader, we’d like you to attack and kill all of them”. TheKNU soldiers were very happy to hear that, and the nextday when the DKBA soldiers were on their way to thesawmill the KNU soldiers were waiting for them halfwayand shot at them. The DKBA soldiers called SLORC tosupport them with artillery, but SLORC were laughingand clapping their hands.” 271 DKBA Soldier, 1996

It cannot be said for certain how the KNU or DKBAadminister their logging areas but wherever they work theThai logging companies probably conduct the same kindof logging operations. The above quote highlights theinvolvement of all combatants and the chaos of logging inKaren State. It also shows that business interests cansometimes take precedence over battlefield allegiances,and the involvement of Thai logging companies at theheart of conflict. Although the statement was made in1996 it is arguably still valid today.

18.4.1 The KNU and Logging in Karen State

“SLORC troops are using the extensive network of loggingroads, built by Thai logging companies with KNUconcessions throughout the area, to move quickly.”274 Karen

Human Rights Group, March 1995

The KNU’s guerrilla warfare depends on the forests forrefuge, and they are quite aware that logging is beingused for strategic reasons to undermine the insurgency.

The balance of power between the SPDC and theKNU with regards to logging has been described by theKaren Environmental and Social Action Network(KESAN): “Even after a company has received legalpermission from the Burmese forestry department theymust still consult with the KNU forestry department. ThisKNU department has its rules and regulations to protectwildlife and to preserve forest and according to KNU lawand the forest act no one can conduct any activity in theForest. As the areas are also under the control of theSPDC, KNU authorities can’t do anything, and have toallow the wishes of the companies and the MTE.”

It is likely that the trade itself is being conducted onSPDC terms rather than those of the KNU, but itshould be remembered that it does provide the KNUwith an important source of funding.



Loggers sawing a felled tree in Karen State. Mone Township, Nyaunglebin District, Karen State; 2001.

z The name of the village has been removed for safety reasons.


CONFLICT OF INTERESTS 74

18.4.1.1 Villagers and logging in KNU territory

“This region is where we live on fruit tree gardens such asdurian, betel nut tree. But now due to logging practice wecan see that rainfall decreased and the gardeners are facingdifficulties. The business of logging does not prove muchbenefit to our villagers. If logging work is going on therewill be no more tree left we will face difficulty in our futurefor our shelter.”127 Yu Lo, villager, 2001

Logging began in 1999 in an area close to Light InfantryBrigades 440 and 590 in Mone Township.127 The loggingis mostly administered locally, and conductedindependently of larger logging companies. 50 Burmesevillagers are involved in logging with SPDC permissionand, reluctantly, the KNU.127 It is said that the KNU isconcerned that the logging undermines its security, butthat it is unable to prohibit Burmese villagers because,as they have permission from the SPDC, the villagersfeel that they have a right to continue.127

KNU authorities tried to ban logging in this areabut they were not able to enforce the ban and nowlogging is taxed and administered by both the KNUand the SPDC. Villagers are obliged to negotiateadvances with the KNU authorities and provide themwith a list of workers and a list of tools used. The KNUauthorities in turn give the loggers a list of KNU forestregulations.127

Villagers use simple tools in the logging process.Some are employed as ‘cutters’, ‘draggers’ and ‘floaters’,earning 300 - 700 kyat ($0.5 -1.0) per ton of timber. It isclear that villagers earn very little from the trade andthat large profits are being made elsewhere; neverthelessthis is an important source of income. The logging arearuns alongside a river and floating the timber requires35 pieces of bamboo for every ton of timber.127

In the first instance timber is taken from the loggingconcession on the banks of the Ple Lo Klo River to one of 11 small sawmills in Kyauk Kyi Pauk. The sawmills are two hours away by river or road. The price of timber is between 18,000 and 21,000 kyat($29-$34) per ton.127

The villagers’ situation is difficult because theypay multiple taxes to all combatants and face SPDCand the DKBA demands for ‘voluntary labour’; thereality is that they have very little choice.127

One farmer claimed he was forced to hand the SPDC 12 baskets of rice per acre of rice paddy.127

Under these circumstances logging is an importantsource of income to offset the heavy demands of the combatants.

It is thought that a minority of the logging carriedout by villagers is done in accordance with officialregulations of either the SPDC or the KNU forestdepartments.127 Villagers have expressed concern thatthe unregulated logging is destroying the forest andaffecting the local climate. Forest fires have becomemore frequent and they are made worse by logs andbranches left behind by the loggers. Frequent firesdestroy smaller trees, animals and herbs and thereduced rainfall is affecting villagers’ fruit gardenswhere they grow betel nuts and durian.

18.4.2 Logging and Violence in Karen StateIn Karen, and other states, logging concessions aregiven by opposing armed groups to distinct groups ofcivilians in strategically sensitive areas. From theSPDC perspective logging reduces forest cover andoften means that it can gather intelligence about theactivities of insurgent groups from those that work in the forest. These civilians frequently lackalternatives to logging and may need to raise funds topay taxes levied on their crops. In addition they faceserious risks as logging in the contested and highlymilitarised areas of Karen State can easily lead toviolence and murder.

On 6 April 2001, for instance, The New Light ofMyanmar reported that ten KNLA soldiers hadmurdered 24 woodcutters in Kyaukkyi Township,Nyaunglebin District, for ‘refusing to pay taxes.’According to the SPDC, the KNLA (the armed wing of the KNU) “ arrested 27 villagers collectingfirewood in the forest… and tied their hands behindtheir backs and took them. The insurgents slashed thevillagers to death, using grubbing hoes and wood sticksat the hillside.”275

The KNU denied the SPDC’s version and claimedthat the murders were carried out by the SPDC’sMilitary Investigation Units ‘Sa Thon Lon Apweh.’276

This notorious group operates independently of regularSPDC units, and has been operating in NyaunglebinDistrict (KNU Third Brigade) since 1998. According tothe KNU, orders had been given by the SouthernCommand to local SPDC units to seize people and

TABLE 5: TAXATION OF KNUGOVERNMENT FOR ONECONCESSIONSOURCE: KAREN ENVIRONMENTAL AND SOCIAL ACTION NETWORK(KESAN) REPORT 2001.

Kyat US DollarEquivalent

Pass for one term 100 0.2Pass for one elephant 1,200 1.9License for one chain saw 3,000 4.8License for a road

construction vehicle 10,000 16.1Log dragger 7,000 11.3Log lifter 5,000 8.1Log conveying truck 3 ton

and above 3,000 4.8Log conveying truck 7 ton

and above 7,000 11.31 ton of iron wood (pyinkado) 4,000 6.51 ton of teak 5,000 8.1

18.4.3 U Teza and the Htoo Trading Company The Htoo Company is owned by U Teza a rich businessman who lives in a teak mansion inKamayut Township in Rangoon. He maintains closerelations with very senior figures in the SPDCincluding Than Shwe, as well as other nationalentrepreneurs and is widely suspected of being one ofthe regime’s sources of arms and ammunition.283 Thecompany has business interests that include, roadbuilding,284 tourism resort development andagribusiness.285 U Teza is Vice Chairman of theMyanmar Billion Group Co Ltd286 another nationalentrepreneur group involved in logging287 and othernatural resource based businesses.288, 289

Because of the national entrepreneur status thecompany can easily import heavy machinery such astractors and heavy lifting equipment and can obtain fuel ata privileged rate.290 The company is obliged to supply somelogs to the MTE but it also exports teak and pyinkado.100,

127 However, its privileged status appears to have led to acertain disregard for public opinion. For instance, in theprocess of constructing a timber jetty on the eastern bankof the Irrawaddy River in Katha Township, SagaingDivision, the company built roads across villagers’ fieldsdestroying cultivated land as well as the crops that weregrowing on it. According to an NLD statement there wasno consultation and no compensation.291

Logging in Mone Township, Nyaunglebin District iscarried out by several groups. These include the DKBA,which began logging in the area in 1998 and hasestablished small sawmills and local SPDC units, which

machinery involved in stealing timber from the forest.The KNU claim that the MI, is under the direct controlof the Southern Command. Furthermore, the KNUclaim that the SPDC’s reporting was “politicallymotivated and with the intention of tarnishing the goodimage of the KNU.”276

In 2001 Global Witness interviewed a loggingbusinessman who claimed that: “Government troops,sent not from the Central Command, but from higherlevel, are the worst in Taungoo area. They are knownas ‘Short-trousers’ by the locals being tortured by them.Nobody dares to talk about them. We’ve been told thatthey had opened up the stomach of a man leaving himto die in front of his villagers.”277 Taungoo is just northof Nyaunglebin, and Pegu Division, where theinterview took place, borders both these districts ofKaren State.

A 1999 report by the Karen Human Rights Group (KHRG) refers to the possible arrival of ‘Short Pants’ soldiers in Pa’an District, and possiblyin Thaton District, south of Nyaunglebin. According to the group the ‘Short Pants’ “firstappeared in Nyaunglebin District in September 1998and began systematically executing all villagers whowere suspected of even the slightest possible contactwith Karen forces.” The report goes on to say ingraphic terms “They have already brutally executeddozens of villagers in Nyaunglebin District, oftencutting their throats and beheading them as a warningto other villagers.”278

‘Sa Thon Lon’ or ‘Three Ss’ ‘Sa Sa Sa’ is theabbreviation for the DDSI (Directorate of DefenceServices Intelligence), Burma’s pervasive MilitaryIntelligence headed by SPDC Secretary-1 Lt. Gen. KhinNyunt. This group is often referred to as ‘A’Htoo AhNa Ya A’Pweh’, meaning ‘Special Authority Force’.279

These soldiers, apparently under the direct control ofRangoon, have described themselves to some villagersin Karen State as ‘Dam Byan Byaut Kya’ or the‘Guerrilla Retaliation’ unit. Villagers refer to the groupas ‘S’Ker Po’, ‘Short Skirts or Short Pants, a reference totheir use of civilian clothes.280

Global Witness has been unable to ascertain theveracity, or otherwise, of these accounts but what is not disputed is that 27 woodcutters were killed in cold blood, probably in the course of cutting timber for sale.

A similar incident took place more recently in ShanState. In January 2003 The New Light of Myanmarreported the murder of 12 workers at a timberextraction site on the 18 January.281 The SPDC blamedthe deaths on the SSA(S). However, in February 2003 aShan Herald News Agency article reported that a keywitness had retracted his statement saying that he hadbeen coerced by the Tatmadaw to provide it, and thatin fact it was the Tatmadaw that had carried out thekillings.282 It is far from clear who was actuallyresponsible for these deaths.



Revenue certificate of a sub-contractor working for Htoo Company, 2000.



have granted villagers permissionto log and to operate sawmills.However, most of the logging iscarried out by the Htoo TradingCompany, which works with theMTE throughout Burma, and itsrepresentatives orsubcontractors. Logging in theseareas is particularly profitablebecause of the proximity toRangoon and the resultant lowtransportation costs.

Htoo Company has anoperational office in Toungooand a branch office in MoneTownship where it has beenworking since 1997, when itreplaced several smallercompanies. The Mone Townshipoffice is used to oversee loggingoperations in Nyaunglebin.Before Htoo Company’s arrival the logging operationswere basic but it invested significant capital, buildingroads and using chainsaws and other modernequipment, which significantly speeded up theharvesting process.

In effect, the Htoo Company has been givenpermission to log in ‘brown’ areas (insecure zones),areas contested by the KNU. Htoo Company does notdeal directly with the KNU, but its subcontractors aresaid to use a ‘communication team’ to negotiate at theNyaunglebin District level, in Mone Township. Thelogging permits are provided by SPDC officersBrigadier General Tin Aye and his second officerColonel Maung Ni.127

The Htoo Company has a logging quota from theMTE for Mone Township to extract on average 8,000 tonsof timber a year.127 In Nyaunglebin for the 2001/2002period the Htoo Company has a contract to log 15,000tons of pyinkado and 10,000 tons of teak per year.

Before commencing work in the Mone Padaireserve, Htoo Company’s subcontractors pay a ‘bond’to the KNU.127 In other areas it is understood thatHtoo Company representatives have made donations often million kyat to the KNU.292 The representatives alsoneed to pay off the SPDC battalions that operate in itsconcession in order to avoid clashes between KNLAand SPDC troops In Mone Township this is the 440 and590 Battalions, which are paid 20,000 kyat by eachHtoo Company representative before they are allowedto start logging.127 Despite the payments however, thereis said to be no guarantee that fighting will not occurbetween the KNLA and SPDC.

Htoo Co’s logging operations are conducted bysubcontractors, which are often small locally basedoutfits. Personnel involved in logging operations areissued with movement passes which must be obtainedfrom the village Peace and Development Councils

(PDCs), then township PDCs, and finally from thefrontier military office Passes cost 3000 kyat ($4.80) andare valid for one logging season.127

Subcontractors working for the Htoo Company domost of the hard work but appear to get relatively littlereward. According to one subcontractor, “This loggingwork is not so profitable as we have to pay various kindsof tax and contribution and we are able to enjoy only avery little amount left over. The major benefactors arecompanies and the MTE. They pay us quite low whereasthey earn in US dollar on exporting. For us it is notfavourable and even risky when we met with SPDC’sfront line moving soldiers.”127 Htoo builds roads in thelogging concessions and charges the subcontractors100,000 kyat ($161) each day to use them.127 Thesubcontractors receive a fixed price from Htoo for logs:15,000 kyat ($24) for a ton of teak and 12,000 kyat ($19)for a ton of pyinkado; this does not reflect the true valueof the timber.127 For instance, according to the TropicalTimber Market Report, teak logs of sawing quality werebeing sold for around $1,200. They are also responsiblefor transporting the logs, sometimes 30 miles from theforest from where the Htoo Company picks them up.127

18.4.4 The DKBA and logging in Karen State

“In the beginning the logging took only the large trees, nowthey take the medium and small trees…. There is noreplanting, there is no replanting when there is no peace.”293

DKBA battalion commander (defector to KNU), 2001

According to a DKBA defector “all the DKBA leadersare involved in logging and have become wealthy fromit.”293 The defector stated that the wealth of theleadership is a cause of dissatisfaction within theDKBA293; this is reminiscent of feelings within theKNU before the DKBA split away. Large areas offorest as well as sawmills, that were under KNU

U Teza’s house in Rangoon.

control, were captured by the DKBA/SLORC duringtheir mid 1990s offensives. The DKBA also inheritedstockpiles of logs left in the forest, and in KNU campssuch as Kawmoorah and Mannerplaw.

The DKBA also has nominal control over areas inKaren State, and logging operations on the border andfurther inland. Timber from the DKBA-controlledforests is exported to Thailand as well as via Burmesemerchants into Burma and from there on to theinternational market. Much of the timber produced fordirect export to Thailand is in processed or semi-processed form and enters via Tak Province (see page 64).

Logging in parts of Pa’an and Northern Dooplaya(opposite Tak province) reflects a potent mix of uncheckedThai logging interests and the short-term opportunism ofthe groups who participate. Most of the timber is exportedto Thailand, rather than Burma, where profit margins aregreatest. Many think that this particular area will becomeexhausted within the next few years and there is already ashortage of suitable leaves for roofing houses as teak anddipterocarps are becoming increasingly scarce.

According to a KNU officer interviewed by GlobalWitness, in the last six years huge areas of forest havebeen seriously degraded between the Moei River andthe Dawna mountain range. Most of the remaininggood forest is in the mountainous areas and, since thecurrent Thai government under Prime MinisterThaksin Shinawatra came to power, there has beenrenewed pressure from Thai logging companies to openup these areas. The area controlled by the KNU’s 7thBrigade, in Pa’an District, is mentioned in particular.294

According to a DKBA defector from 999 Brigadethere are ‘hundreds’ of sawmills in Myawaddy District,mostly operated by Thais with many employing Thaiworkers.294 In the defector’s previous area of operationThai businessmen initially negotiate with the DKBAleadership for logging concessions, after which they dealwith the local units where their concessions are located.Sawmills owners are reported to pay the DKBA 10,000baht ($222) each month and 300 baht ($7) for each dayand 300 baht ($7)aa for each night worked. The fact thesesawmills are run 24 hours a day has been confirmed byvillagers from Wa Le Town, Phop Phra District in Tak,just a short distance from Burma across the Moei River.

The defector claimed that when Burmese ForestDepartment Officials visited DKBA-controlled areasand ordered the DKBA to close sawmills, the requestswere ignored.293 It is thought that overall permission forthe logging comes from the SPDC even though theForest Department may have little control over specificoperations and it is thought that there have been noofficial agreements. Global Witness has been told thatthe deals are struck at regional command level, in thisinstance the S. E. Regional Command, but this has notbeen confirmed.293 Taxes are said to be shared betweenthe Regional Command and the Military Intelligence.293

Some DKBA combatants work for the loggingcompanies providing labour and security. As the area is stillcontested it is probable that DKBA security would protectthe sawmills from KNU combatants demanding taxes.

In May 2003 it was reported in the media that aBuddhist leader and a colonel from DKBA BattalionNo. 906 were involved in cutting teak near the ThreePagodas Pass border town. According to the newsagency’s source the DKBA sold 17 tons of teak in April2003 at a price of 18,000 baht ($430) per ton. Some ofthe teak is sold to local traders, made into furniture andexported to Thailand.296

18.4.4.1 The DKBA and logging in Karen State awayfrom the border

Although logging is heaviest near the border, the DKBAis also involved further into Burma where it dealsdirectly with timber merchants and larger companiessuch as the Htoo Company. These companies havelogging concessions granted either by the centralgovernment or by the S.E. Command, possibly both.Many DKBA-controlled areas are still actively contestedby the KNU, and are deemed to be insecure zones.When a logging concession is granted in an insecurezone the DKBA arranges for the timber to be cut andtransports it to ‘handing over points’ where it is passedto the company that has the logging concession.292

Timber from these concessions enters the Burmesetimber market via the MTE and private timbermerchants. The DKBA is reportedly paid 10,000 kyat($16) per ton of timber officially extracted from theirareas, which appears to be an agreement between theDKBA and the SPDC.292

As with other ceasefire groups that are givenpermission to log for development or maintenancepurposes, the DKBA has a 5,000-ton logging allowanceper year for the upkeep of Myaing Gyi Ngu, the DKBAheadquarters.292 The Buddhist monk, U Khay Mi Ka, isresponsible for dealing with the DKBA’s official timberincome. It is not certain if the 10,000 kyat payment, perton mentioned above is limited to this 5,000-tonallowance that the DKBA has been given.

The DKBA derives further income by loggingunofficially, for instance with SPDC army units or bycharging private individuals who want to build sawmillson the edge of insecure zones where logging isconducted.292 This is said to be particularly profitablefor the local DKBA and SPDC units as most of themoney is retained instead of being passed to higherlevels of command.127, 292

The DKBA and individual DKBA officers ownsawmills and furniture factories in Kawkareik and MyaingGyi Ngu where the DKBA also has a timber jetty on theriver. The DKBA sells teak to traders who come up fromMoulmein. Timber traders also use the DKBA to transportillegal timber to Rangoon to avoid checkpoints.292



aa $1 = 45 baht in 2001.



18.4.4.2 DKBA/SPDC and logging inKyaukkyi and Shwegyin Townships

In Kyaukkyi and Shwegyin Townships thereare no official concessions from either theSPDC or the KNU. Instead the logging inKyaukkyi and Shwegyin is mainlycontrolled by SPDC and DKBA battalionsbased in the area. DKBA and SPDC officersown the majority of sawmills and theirpermission is required by any civilianwanting to run one.

There are 10 battalions of SPDC troops inShwegyin Township. Each battalion has tosend 50,000 kyat ($80) each month to theirdivision (“daign” in Burmese). In order toraise the money the battalions run manylogging and gold mining businesses in the area.However despite the battalions’ best effortsthe money is not always passed up: “AllSPDC, DKBA and Burmese individualsworked on logging enjoyed the benefit by theirown and nothing was benefit [sic] to theirhigher authorities.”127 After milling, eitherpyinkyado or teak, a ton of sawn timber canbe sold for 90,000 - 100,000 kyat ($145-$160).

In Shwegyin part of the No. 66thDivision, Light Infantry Brigade 4commanded by Colonel ‘Nyi Nyi’, hasoperated logging operations in the KyotuForest Reserve.127 Logs are floated down the Maw Dta Ma River to the Sittang Riverand onto Pegu.

SPDC soldiers also hire, and sometimesforce, villagers to transport logs usingoxcarts, to the river or to the PeguHighway for 1,500 kyat ($2.4) per ton.Here timber merchants from Rangoon andMandalay purchase the logs for 15,000-20,000 kyat ($24-$32).127 Soldiers also hirevillagers to drag logs, using their buffaloes,from forest areas to sawmills owned byDKBA and SPDC officers. For example theDKBA operates two sawmills inP’yalaygone and three sawmills in YangmyoAung.127 SPDC officers and Burmesecivilians operate four sawmills in Yangkyi Aung and others in places such asYangmyo Aung.127

Burmese villagers can apply for loggingpermits from SPDC military officers; the legalstatus of these permits is not known. InKyaukkyi, Karen villagers are paid 30 kyat perplank on a four hour journey. In Shwegyin theSPDC units hire villagers for 400 kyat per dayfor cutting timber. As in Mone Township, thehigh level of taxation on villagers’ crops meansthat employment in the logging industry is animportant additional source of income.

MAE TETE

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N'Bweh Gone

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SUPALIKO.591

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KEY

Karen name is in brackets

Town / Village

SPDC Army Camp

DKBA Camp

District Boundary

Township Boundary

River

Paved Motor Road

Unpaved Motor Road

Railways

Reserved Forest

Logging Concession

Charcoal Concession

Gold Mine

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TAUNGOO (TAW OO) DISTRICT

PAPUN (MUTRAW) DISTRICT

KYAUK KYI (LER DOH) TOWNSHIP

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THATON (DOOTHATU) DISTRICT

MONE (MU) TOWNSHIP

8 miles

NYAUNGLEBIN (KLER LWEE HTOO) DISTRICT,KAREN STATE, 2001.SOURCE – KAREN ENVIRONMENTAL AND SOCIAL ACTION NETWORK (KESAN)



18.6 Charcoal Making in Nyaunglebin District

Charcoal making is a major cause of deforestation in Kyaukkyi and Shwegyin Townships, in Nyaunglebin District. The relationshipbetween conflict and charcoal making is clear, as the trade is an important source of funds for both SPDC and DKBA units.Charcoal making is also taxed by the KNU but as it is relatively weak in this area it can tax only a small part of the trade. TheSPDC and the DKBA each charge villagers 600 kyat ($1) a month for a permit to operate a charcoal oven.127 Where it can, theKNU taxes 5000 kyat per year. In some places villagers pay taxes to the SPDC, DKBA and the KNU.

The SPDC and the DKBA also operate charcoal ovens where villagers are forced to work.127 The charcoal ovens are fired twicea month and produce 60-200, 50-kilogram sacks of charcoal each month. The cost of hiring a bullock cart to carry the charcoal toa collection point is 50 kyat per sack. The SPDC and the DKBA have charcoal collection points at Yangki Aung (DKBA), P’yalagone(SPDC and DKBA) and Yangmyo Aung (SPDC).

The price that charcoal makers receive, 350 kyat persack, is controlled by the SPDC and the DKBA and isartificially low.127 However, as the SPDC units squeezevillagers for resources, through forced labour, forcedporterage and tax on crops, charcoal burning has becomean important means for villagers to make ends meet.

Many of the charcoal makers are Karen villagerswho were relocated by the SPDC from hill areas toKyaukkyi and Shwegyin townships on the sub plateau ofthe Sittang River plain. These villagers have complainedthat there is not enough cultivatable land here and thatthis is exacerbated by flooding. “Because of a hugenumber of people and no land for cultivating and raisinganimals, region people had their fields destroyed byflood, so they started to do charcoal business.”127

18.5 Logging and Landmines in Karen State

“The DKBA soldiers came to stay in my village. They are planting landmines to protect their logging…so we dared not stay.” 164 Anon, Karen villager, 1999.

Mines are used by all sides in the conflict. They are most often deployed to obstruct enemy troop movements, to block supplylines, to seal escape routes, to defend positions and to deny villagers access to their land after they have been forcibly relocated.In Karen State there were more landmine casualties in 1999 than for the whole of Cambodia, one of the most heavily minedcountries in the world.297

However the use of landmines is not restricted to military purposes. Defectors from the DKBA described to Global Witness, inNovember 2001, how they use landmines in their logging operations.293 This has been corroborated by Nonviolence International(Southeast Asia)bb, 298 through the collection of accounts from landmine victims from Burma, being treated in Thailand, forLandmine Monitor. cc Civilians inside Karen State have also described to Global Witness an incident of Burmese logging merchantspaying the Tatmadaw to remove landmines, so that logging could commence. U Soe Myint, a wealthy timber merchant, has beenallowed to extract 2,000 In – Kanyin (Keruing) and 500 Pyinkado (Ironwood) trees from an area three miles uphill from Daung-yavillage in Bilin Township, Mon State. The permit was issued by the SPDC. In turn, U Soe Myint has given the Tatmadaw 60 lakhs (6million kyat, or roughly $9,700) to clear mines that they planted in this area.299

In DKBA-controlled territory within Karen State landmines are frequently used to control regions of forest that are going tobe logged, particularly those controlled by the 999 Brigade in Pa’an district.293, 300 Landmines are used to demarcate loggingconcessions, to stop loggers operating outside their concessions and to stop the KNU from taxing or disturbing the loggingcompanies.293 In some cases Thai businessmen hire former combatants to lay the mines.293, 297 Active DKBA combatants also laylandmines in what appears to be part of a range of services, including protection and road building, that they provide the loggingcompanies; their main source of income.293 Thais are said to provide the explosives and detonators.293, 297 Not only do theselandmines kill and maim combatants and civilians but their presence also severely impacts on people’s livelihoods throughrestricting access to forest resources and killing their livestock.

Ironically logging is sometimes carried out by SPDC units for welfare purposes in some cases to assist handicapped soldiersincluding mine victims, injured in a conflict that has much to do with control over logging.127

bb An NGO that provides assistance to individuals, organisations and governments globally seeking nonviolent means to achieve their social and political goals.cc Landmine Monitor is a civil society based reporting network to monitor systematically and document nations’ compliance with the 1997 Mine Ban Treaty,

established by the International Campaign to Ban Landmines.

Part Two: Logging in Burma / 19 The China-Burma Border

19 THE CHINA-BURMA BORDER

“We are surrounded by resource hungry nations that havebeen syphoning off our valuable resources, by fair means or foul.” U Myat Thinn, SPDC employee, Chairman, Timber

Certification Committee (Myanmar), January 2003

Resource rich, and hemmed in by the two mostpopulous nations in the world, China and India,Kachin State has been described as one of the mostvaluable pieces of real estate in the world.301 In a littleover a decade Kachin State has been transformed froma marginalised, war-torn region of north east Burma,to a natural resource storehouse for development inChina. In contrast the Chinese have already exhaustedmost of Shan State’s forest reserves. Thetransformation in Kachin State has taken place againstthe backdrop of ceasefire deals that removed many ofthe obstacles to rapid resource exploitation thatexisted during the insurgency period. The loggingtrade has boomed because of two prime factors:Chinese demand for timber and political instability inKachin State.

19.1 Chinese-Burmese Relations

“The Burmese leaders have repeatedly indicated their wish for us to be involved in the development of resourcesin northern Burma.”302 Peng Yongan, Chinese academic et al

“Today, they have gained control over the whole ofnorthern Burma. They control our resources, our markets.But what can we do?”303 Anon, local person, on the Burma-China

border, 1991

In the aftermath of the violence of1988 the military leaders of theSLORC faced ostracism by theinternational community. China wasthe first country to recognise theregime, and the continued lack ofengagement by the majority of othernations lead to an intensification ofthis relationship. China’s sustainedsupport gave the SLORC time tostrengthen its domestic position;without this support the regime maywell have collapsed.186, 304, 308

In 1988 the two countries signedexpansive agreements on bordertrade. In December 1989 the thengovernor of Yunnan Province, HeZiqiang, led a delegation to Burmaand signed 11 trade agreements,including forestry deals.302 In 1991the SLORC Minister of Finance andPlanning, Brigadier-General DavidAbel, led a delegation to Yunnanduring which the SLORC “extended

a welcome to the Yunnan side to examine and discussgold mining…. and carried out in-depth discussions oncooperation in jade and forestry.”302 This visit took placeprior to the KIA ceasefire but after the NDA(K)ceasefire.

China has also facilitated the massive expansion ofBurma’s armed forces through the supply of militaryhardware and the provision of training. Military salesfrom China to Burma between 1988 and 1998 areestimated at between one and two billion dollars. Mostof this has been bought at discounted prices, throughbarter deals and interest-free loans.10, 305

Fundamentally China is expanding its economicspace, contributing primarily to the border regions butalso to the national economy as a whole. In the process,severe disparities in economic growth between thesouthern coastal regions and the landlocked inlandprovinces and the resultant threats to national securityhave been somewhat relieved. China needed Burma’snatural resources to fuel future economic growth in theborder provinces and in this context the Burmeseinsurgencies became a hindrance to China’sdevelopment, by blocking access to natural resources,trade and communications.

It is not known for certain what role the Chinesehad in the ceasefire agreements but it is highly likelythey were involved in some way. For example it hasbeen claimed by some Kachin that China appliedsignificant pressure to the KIO to sign a ceasefireagreement with the Burmese regime, although this isofficially denied by KIO. Other Kachin sources havegone further than this stating that China made it clear

Jinxin company log stock pile near Gudong, 2001.




to the KIA that they must sign a ceasefire.306 Certainly,after the collapse of the Communist Party of Burma in1989 and the signing of subsequent ceasefireagreements, border trade between the two countriesincreased, and border towns in Yunnan such as Ruiliand Tengchong boomed from the trade in Burma’snatural resources. China also secured access to theBurmese market, providing China’s then failingindustries with an outlet.

There has also been an influx of Chinese intonorthern Burma, including many businessmen,especially into Mandalay. Estimates vary from hundredsof thousands up to over one million people, and 30-40% of Mandalays population of 1.2 million is saidto be ethnic Chinese.307 This has caused resentmentamongst many in Burma who see this as an invasion byChina; part of a plan to take over parts of the country.Many of the Chinese interests in Burma remain veiledin secrecy so the full extent of Chinese influence isdifficult to gauge.

The SPDC is aware of the risks in depending toomuch on China. From its point of view Burma’sadmission to ASEAN in 1997 was a means ofproviding balance. The SPDC has also recentlybought military hardware from countries other thanChina, most recently MiG fighter planes from Russia(see Bartering page 28). Burma has also strengthenedits ties with India. These moves have irritated China.However, it will be difficult to reverse China’sinfluence not least because of Burma’s strategic andeconomic importance to a country that will not wantthis to happen.308

19.2 Chinese-Burmese relations andNatural Resource Colonialism

“As for the exploitation of forest resourcesfrom Northern Myanmar for export to China,transportation is much easier, costs are low andit is convenient to bring Chinese labourers intoMyanmar to cut trees ... Myanmar has madeseveral requests to us for the exploitation of itsforest resources jointly with China....Importing timber from Myanmar has manyadvantages. Firstly, there are many species oftrees, in good quality, obtainable at a cheapprice; secondly using timber from this sourcecan support the increasing demands fromChina’s domestic markets and reduce theamount of the forest cut in Southwest China,thus protecting our environment. Thirdly, wecan develop our timber processing industries(cutting of teak, producing wood fibre, papermills, furniture manufacturing), and assistlocal economic development ... Myanmar is theonly country in which we do not have to payforeign currency (we can pay directly inChinese yuan), for imported timber ... In fact,Myanmar is playing the leading role incompensating for the short-fall in theconsumed volume of forest of Yunnan.”309

Chenwen Xu, academic, 1993

China has four per cent of the world’s forest cover,ranking it fifth in global terms. However, with 22% ofthe world’s population China has one of the lowestforest area per capita figures at 0.11 ha, compared to theworld average of 0.77 ha.310 The situation is similar interms of both farmland and mineral resources. Thisweak resource base contrasts sharply with China’sincreasing resource requirements in terms of its owngrowing and increasingly wealthy population and itsincrease in exports. China’s economy now stands atover $4.5 trillion,3 22 times larger than it was in 1978311 and continues to grow at about 8% per year. In 1997 Yunnan’s economy was 100 times larger than it was in 1987.

China needs Burma’s natural resources and it is thisneed for timber, gold and other minerals that has helpedshape China’s policy towards the regime in Rangoonand the insurgent groups along the China/Burmaborder. Natural resource extraction in Burma hasfuelled development in China’s Yunnan Province andChina’s ability to import timber freely has been evenmore important since the imposition of its own loggingban (see page 83). It appears that in the minds of theChinese policy makers the environment ends at theborder, as they have shifted the ecological burden ofChinese development to the people of Burma, inparticular those living in Kachin State.

It is also likely that a number of the deals are struckat a county or provincial level but it is not known towhat extent these are influenced by the authorities inBeijing. The situation obviously has parallels with that

Road building in China close to the Burma border. The truck is carrying timber from Kachin State.



on the Thai/Burma border but in this instance, giventhe rapidly increasing demand in China, theimplications for Burma’s forests and people are evenmore serious.

It should be noted that despite China’s high demandfor timber, its average timber consumption is only 0.12 m3

per person per year, less than one-fifth the globalaverage.312 Consumption in the UK is eight times thisfigure, and that of America 19 times making them theworld’s largest consumers of wood products per capita.

Nevertheless, China’s population is growing at 0.88%per year3 and consumption patterns are changing,especially for timber. In the larger cities consumption isbelieved to match the global average.312 Houses havebecome larger and contain decorative features such aswood flooring and wooden doors. In Shanghai, over200,000 new homes are built each year.313 Eachhousehold consumes almost 2.5 m3 of timber a year,totalling 500,000 m3 per annum. By 1998 the importvalue of wood products to China ranked first, surpassingfor the first time petroleum and steel products.

Despite the dire implications, the forest exploitationin northern Burma has been largely unreported.However, a report entitled “Research on theComplementarities of Economic Development in theChinese-Burmese Border Regions”, part of a seriesdealing with the opening up of border trade and fundedby the Chinese National Foundation of NaturalSciences, explains in great detail the need to developtrade, particularly in natural resources with Burma:“With the surrounding undevelopedcountries…Yunnan, which has developed itsindependent industrial structure…needs their

resources/raw materials to fill the needs of Yunnan’sown industrial development”302…“In [our] borderareas, because of the lack of resources, the people wholive below the poverty line up till the present number inthe millions. It is difficult to shake off the poverty ...Burma’s land resources, forest resources, biologicalresources and mineral resources are very rich, and theseare precisely the important resources that we urgentlyneed302… the forests have not been developed for use,maintained a primordial state, urgently beckoningpeople to develop and use them.”302

There is even a section entitled, “Yielding WonderfulEcological Benefits”302 within which it is explained howlogging in Burma will “lessen the level of extraction ofour country’s [China’s] forest resources, bringingecological benefits”. The same section provides agraphic description of the terrible effects of logging inthe Nujiang Valley, near the town of Fugong wheremany of the logs from the N’Mai Hku Project aredestined (see page 104).

In relation to mineral resources the report goes onto say: “Our country lacks raw minerals, and has aspecial demand for Burma’s resources.” Although Chinaranks third in the world in terms as a source of mineralresources it is only 80th in terms of resources availableper person, hence the huge demand.302

It is clear from these reports that China’s soleconsideration is the further development of China,especially Yunnan Province. Burma and in particularKachin State is seen as part of the solution to China’sresource needs. There is no mention of the people wholive in these forest areas and the biological and culturalvalue of the forests has been ignored.

Pian Ma, Yunnan Province, China; 2001.



19.3 The impact of logging in China

“Protection of natural forests is pressing work, and bydelaying efforts by even one day, our losses will add up byone inch, and our Yellow and Yangtze rivers will not giveus peaceful days.”314 Zhu Rongji, Chinese Premier, 1999

The development strategy of post revolution China had aserious impact on China’s environment, particularly itsforests. Forest cover fell from 21% in 1949 to only 14%in 2003. However, it is now on the increase, as Chinamakes efforts to reverse the deforestation of the pastwith extensive afforestation programmes, mainlythrough plantations. Afforestation and territory greeninghave been defined as a “common duty of society.”

In 1996 and 1997 floods cost Yunnan 3.2 billionyuan ($402,500,000) and 4.5 billion yuan ($542,170,000)respectively.315 Severe flooding on the Yangtze River in1998 affected one-fifth of China’s population in 29provinces, killing more than 3,600 people anddestroying about 5 million hectares of crops. Economiclosses throughout China were estimated at over $36billion.316 Soil erosion caused by logging in thewatershed of the Jinshajiang River, which flows throughnorth eastern Yunnan and western Sichuan, led to theriver depositing 280 million tons of sediment into theYangtze every year.315 This was found to be a majorcontributory factor to the flooding.317 These floodsprompted China to recognise the importance ofprotecting its remaining natural forests, leading to theintroduction of a nationwide logging ban in 1998.

Yunnan also suffers from mudslides that killhundreds of people each year. In Yingjiang Countyopposite Kachin State, in August 2000, a mudslidedestroyed a hydroelectric power station with 45 peopleinside, killing at least 14 people.318 The damage wasestimated at $2.4 million.319 A similar event is reportedto have happened in Kachin State recently with a KIOhydropower project.344

19.4 The impact of China’s logging ban

“Logging in China is forbidden, it is a very serious offence,even to cut a small tree ... If you look around Tengchong,you can see that they are planting trees everywhere.” Anon

KIO officer, 2002.

Before the logging ban, Beijing had ordered somecounties in Yunnan to stop logging, in part due to thefear of further mudslides. Following the 1996 loggingban in Yunnan major forest enterprises decreased theiroutput by two thirds. But despite the ban smallerenterprises continued logging, taking the view that“The sky is high, and the emperor is far away.”

In 1998 China imposed a country wide logging banon natural forests in specified regions of 18 provinces,approximately two-thirds of the country. Chinarecognised that the deterioration of the ecologicalenvironment in major watersheds had become a limitingfactor for its continued economic development.310 Soonafter the imposition of the ban on a visit to Yunnan theChinese Premier, Zhu Rongji, said that the “protectionof forests should be viewed from the vantage of theentire nation’s economic and social development, andfrom the height as something that concerns the Chinese

people’s long-term development.”320

The Chinese authorities are makingevery effort to enforce their own logging ban.In Yunnan in 1999 “forest police handledover 10,000 cases related to poaching wildanimals and destroying forest resources. And16, 000 people were dealt with according tothe law;”321 or as one Chinese official,referring to the dismissal of bureaucratscaught permitting logging in Yunnan, put it“the felling of one tree now costs one head toroll.”315 But this is ultimately at the expenseof other timber producing countries asdiverse as Indonesia and Liberia, and in thecase of China’s near neighbours concern forthe environment appears to end at the border.

This ban is part of the “Natural ForestConservation Programme” (NFCP) that,amongst other things, aims to reduce logextraction in natural forests in China from

Chinese slogan pillar, on the road from Luzhan to Pian Ma, China; 2001. Translation:“Protecting the Gaoligonng Mountains is protecting our own garden; Protecting the forestry resource isglorious: Damaging the ecological balance is shameful; Protecting the forest and maintaining ecology is anachievement in the present era: Profit in centuries; To set fire to the mountain forests, to poach, to steal and cuttrees and deforest is strictly prohibited.” Propogated by the peoples government and the administrative bureauof the nature reserve of Lushui county.

1990 1992 1994 1996 1998 2000 2002

Millions of cubic metres

0

5

10

15

20

25

IMPORTS OF TIMBER INTO CHINAFROM ALL COUNTRIES AND OF ALLCATEGORIES SOURCE: CHINESE CUSTOMS DATA


32 million m3 in 1997 to 12million m3 in 2003. Timberimport tariffs were alsodecreased on a national basisfrom 50% to about 5% tofacilitate imports.322 In Yunnan,which imports most of Burma’stimber, the import tariffs mayhave been lower.

China is the world’s onlydeveloping country that is amajor net timber importer andis the world’s fastest growingmarket for tropical timberproducts. In 2001 commercialtimber consumption in Chinawas about 95 million m3 perannum.323 Since the logging banChina’s imports of logs haverisen from less than 5 million m3 in 1998, to over 10million in 1999. In 2001 log imports stood at around 16million m3.322 According to recent Chinese customs datatimber imports, comprising mainly logs and sawn woodgrew significantly in 2002 as a result of strong GDPgrowth at 8% per annum and huge growth ininvestment. China imported 24.333 million m3 of logsvalued at $2.138 billion during 2002, up 44.3% involume terms and up 26.2% in value terms compared tothe same period of the previous year. Imported sawnwood totalled 2.52 million m3 worth $ 550 millionduring the first half of the year, up 39.3% in volumeand 22% in value respectively over the same period for2001.324 Coniferous log imports at 15.78 million m3

represented 64.9% of the total, an increase of 72.6%compared to 2001. Hardwood log imports accountedfor 8.553 million m3 or 35.1% of the total, an increase of10.8%. China imports both coniferous and hardwoodspecies from Burma.325

But the NFCP has added to China’s unemploymentproblem. In Yunnan alone, 63,000 loggers lost their jobsand nationwide 1.2 million people were laid off. As aresult, China looks more than ever to Burma as a rich

source of natural resources. As one KIO Officer put it,“China has thanked the KIO several times, they saidfrom Ruili to Tengchong, Yingjiang, Changkong, and upto Kunming, the whole province has profited from Kachinresources, jade, wood. The Chinese used to say because ofyour resources we have improved and developed ourarea, which is recorded in our history.”326 AmongstChina’s politicians and security forces there is mountingconcern that the growing ranks of the unemployedrepresent a pool of discontent and a potential source ofsocial instability. Burma’s forests are viewed, in thiscontext, as an opportunity to find employment for someof these timber workers. There are currently believed tobe over 20, 000 otherwise unemployed Chinese workingas loggers and road builders in Kachin State.327

The Chinese logging ban presented the SPDC withan ideal opportunity to increase its revenue from timberexports by raising the unit price. However, the unitprice of timber being imported by China has remainedsteady at approximately $90 per m3 since the mid1990s.328 This is extraordinarily low and may representthe quid pro quo for the extensive financial, militaryand political support that China provides to the SPDC.

One of several multi-million dollar wood processing factories located near Tenchong Town, China. This factory makes doors and window frames for export.

Log trucks parked up in Yingjiang Town, China; 2001.


19.5 The timber trade on the Chinese side of the border

The end of open fighting in Burma on the Chinaborder, in 1994, allowed the local Chinese authorities toimplement the border trade plans that they had devisedin the early 1980s. In 1985 for example they had drawnup “Decisions Concerning Opening Up the WholePrefecture as a Border Trade Area”, even though at thetime the border was not under the control of theBurmese government. In the same year the BeijingReview published an article “Opening to the Southwest:An Expert Opinion” which discussed finding an outletto the sea through Burma.

Trade, particularly the timber trade boomed. InDehong Prefecture there were 13 wood-processingfactories in 1988, each with an annual output ofapproximately 10,000 yuan ($1,200).329 By 1996, thishad risen to 74 factories, with an annual average outputof more than 100,000 yuan ($12,000), and a total ofabout 80 million yuan ($10,000,000). China’s officialtrade figures, which are likely to be underestimates,show that 840,000 m3 of timber were imported fromBurma in 2000 (see Timber Statistics page 39).

Previous research in Yunnan, such as a detailed

timber trade and wood flow study, commissioned by theMekong River Commission, highlighted several factorsthat hampered data collection including: “inadequateaccess to forestry statistics” and a “lack of importanceplaced on accurate statistics.”96 This lack of availableYunnan import data meant that all foreign trade data hadto be compiled from sources in the exporting countries.The scarcity of data is not because there is no data. Infact the collection of data by local, county, levelgovernments on the border is extremely systematic. Atalmost every border crossing that Global Witness visitedthere were one or more checkpoints that taxed andregistered log import as well as checkpoints to ensurethat logs have come from Burma rather than Yunnan’sown protected forests. Notably, Yunnan authoritiesdenied to timber trade researchers in 1999 that there areany significant wood imports to the province.330

Nujiang, Boshan and Dehong districts of YunnanProvince border Kachin State in Burma; Licang Simaoand Xishuangbanna border, for the most part, Wa-controlled areas of Shan State.

19.5.1 Nujiang Lisu Autonomous Prefecture

19.5.1.1 Pian MaPian Ma (Burmese: Hpimaw) has been a major east-westtrade route for centuries, and is home to around twothousand mainly ethnic minority people. This changedafter the NDA(K) (see section on NDA(K) logging, page94) was granted logging concessions as part of its ceasefiredeal. Pian Ma now has a floating population of 20,000people, mostly involved in logging but also mining inKachin State. The town’s rapid development since 1989 hasbeen largely sustained by the logging in Kachin State inareas about 70km from Pian Ma. In 1991, when theprovincial government in Kunming designated Pian Ma asone of 12 Special Economic Zones, it became a “provinciallevel Open Port” for trade. Since then policies designedand enacted from national to county levels have created abusiness climate devoid of government interference.

Infrastructure to facilitate and administer bordertrade was put in place and supported by fiscal incentivesembodied in a series of laws aimed at attractinginvestment. These included: “Policies RegardingPreferential Treatment as a Means to Expand, Openand Attract Foreign Investment” and “PoliciesRegarding Steps Towards the Progress of Pian Ma TradePort and its Rapid Expansion and Development”.331

All these have been successful in attracting loggingcompanies and Pian Ma went from having fourcompanies in 1984 to over 150 in 2001. It is now one ofthe busiest border logging towns on the China-Burmaborder. To encourage logging companies elsewhere, thelocal government has opened what it has described as“International Border Ports”. Today these ports aresimply logging roads. The corresponding town on theKachin side of the border is Datianba in Kachin SpecialRegion 1 (NDA(K)).



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New bridge over Salween (Nujiang) River at La Cholo

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In 2000, at least 150,000 m3 of timber were importedinto Pian Ma.327 Some reports, based on interviews with loggers, have placed the volume as high as 350,000 m3.311 Accurate data on the value of trade is notavailable but officials have said that it amounted to $11 million in 2000.327

Pian Ma may soon become more important formining in future as forests are becoming exhausted andrich mineral deposits have been found in the area.Companies are already having to work 70km from theborder and are planning to move on within the nexttwo or three years north to Fugong and Gongshan.327

Further south, the Tengchong government appears tobe trying to divert log traffic away from NujiangCounty. By building roads to the north log traffic thatmay have gone to Pian Ma will be diverted to bordertowns such as Dian Tan. In this way Dian Tan can expandas logging starts in the Triangle area (see page 101).

According to official figures there are over 100private companies either logging or processing timber.In addition there are over 15 companies that have beengiven the right to ‘manage border trade’. Althoughthere are 80 sawmills in Pian Ma and despite thedevelopment, the town lacks adequate infrastructure,water and electricity supply, and storage space, so the bulk of the timber is transported to Dali and Kunming.327

There are three particularly large companies, with over 10 million yuan ($ 1,250,000) of investmentworking in Pian Ma. These include the De Long ForestResource Co. Ltd, Jinxin Co. [Pian Ma EnterprisesDepartment] (one of several Jinxin depots along theborder) and the Hong Sen Company. De Long andHong Sen both process timber, whilst Jinxin uses PianMa as a log storage area. Jinxin claims that it is thebiggest logging company working in Yunnan Provinceand has other log depots in Tengchong, Dian Tan, and Guyong.327

19.5.1.2 The De Long Forest Resource Development Company

De Long Forest Resource Development Ltd, thoughtto be based in Xingjiang Province in North WestChina, is registered with 20 million yuan ($2.5million) of capital. Local people told Global Witnessthat the company is a joint venture betweenTaiwanese and Japanese companies. It appears tohave a nationwide operation in natural resourceextraction and is as interested in gold mining as it isin logging.327

De Long has operated in the Pian Ma area since1998. Its 35,000 ha concession in alpine forest,granted by the NDA(K), allows the company to cuttimber for 15 years, although it expects to haveexhausted the area within 10 years.327 However, thecompany appears to have good relations with allsides across the border in Burma and is confident ofworking in Kachin State “whoever is in control.”327

It has opened up large areas of forest north of PianMa where it has built a 150 km road network.According to company staff more than 50 workers,of a total workforce of 3000 running 150 trucks, have died in the road building and loggingoperations since 1998.327 De Long is the largestcompany in the Pian Ma area accounting for around80,000 m3 of timber each year. This, amounts to overhalf of official imports for Pian Ma and is projectedto rise significantly.327

The company has invested significantly in anhydroelectric power plant, kiln drying technology andmachinery to produce export-quality wood flooring forthe Chinese domestic and international markets.327 Inaddition to carrying out logging itself, De Long sellsconcessions to smaller logging companies and in early2001, the company was said to be selling twoconcessions for two and four million yuan ($250,000 to$500,000) respectively.327

Log stockyard in Pian Ma.


19.5.1.3 LiukuLiuku is the capital of Nujiang Lisu AutonomousPrefecture. Log traffic from the N’Mai Hku Project (seeN’Mai Hku Project, page 104) and Pian Ma border port(see Pian Ma, page 85) comes to this town, beforepassing to Dali for transport, by rail or the recentlyupgraded road, to Kunming or elsewhere. In 2001 therewere relatively few wood processing facilities or logstockpiles in Liuku though the town is an importantbanking and administrative centre for the loggingindustry and has prospered from it.327

There are less than 10 sawmills in Liuku, by far thelargest of which is the Nu Jian Hong Ta Chang Quingwood factory, four kilometres from Liuku on the eastbank of the Nu Jian River. The company claims to bethe largest single investment along the border and is ajoint venture between a Malaysian company (60%) andthe Chinese state owned332 Hong Ta Group (40%).327

The company purchases most of its timber from the DeLong company in Pian Ma (see De Long Company,page 86) and exports over 1,000 m3 of processed timbereach month. Much this goes to Korea in the form ofdoors and window frames.

19.5.1.4 FugongFugong is the capital of Fugong County in Nujiang LisuAutonomous Prefecture. The town is set to become amajor log trading and processing centre akin to Pian Ma,as timber from the N’Mai Hku Project in Kachin State(see N’Mai Hku, page 104) continues to arrive. A newbridge over the Salween and Nujiang rivers wascompleted in late 2000/early 2001, approximately 28 kmnorth of Fugong. The bridge leads to the Yaping andE’ga roads of the N’Mai Hku Project, which begancarrying logging traffic in the middle of 2001.

Ironically, the Fugong area has suffered from severeenvironmental destruction following the loss of its

forests from commercial logging and agriculturalconversion. Each square kilometre of sloping farmlandloses between 5,000 and 15,000 tons of topsoil annually,and the area is subject to landslides and flash flooding.302

As early as 1979 heavy rainfall caused flash floods andlandslides killing 143 people, injuring 88 and destroyingthe livelihoods of 40,000 people.302

19.5.1.5 GongshanGongshan Town, in Gongshan County, Nujiang LisuAutonomous Prefecture is becoming increasinglyinvolved in logging in Kachin State. A new 96 km roadleading to the Burmese border at Dulongjiang wascompleted in 1999 and is, according to locals, one of themost expensive roads ever built in China, costing onemillion yuan ($120,000) per mile.327, 333 The, as yet,unfinished Danzhu Road, which is part of the N’MaiHku Project (see N’Mai Hku, page 104) fromGongshan Town to the China-Burma border, was beingused to carry small amounts of timber in 2001.327 Inaddition, the road between Liuku and Gongshan hasbeen widened and sealed with bitumen in the last fewyears, by the Ministry of Communications.334 All threeof these roads are central to the opening up of forestand mineral resources in Kachin State. In particular,there are important zinc and gold mines in the Dulongarea, with the third most important zinc deposits inYunnan Province.

There have been reports of at least one crackdownon forest crime in Yunnan. In early 2001, 13 GongshanCounty government officials and company managers were jailed after investigations by the StateForestry Bureau, which found that leaders of the local government had illegally issued a 4,200 m3 logginglicense to a Hong Kong businessman’s company in 2000.The company illegally clear-cut forests and extractedmore than 23,780 m3 of timber in China.327, 335, 336



Nu Jian Hong Ta Logging company stockpile; 2001.


19.5.2 Baoshan Prefecture

19.5.2.1 TengchongTengchong is a large town in Baoshan Prefecture thathas built its economy on logging. Timber merchantstold Global Witness that at the height of the logging,during the last 10 years, up to 400,000 m3 of logs a yearwere imported into Tengchong through the borderports Dian Tan, Tze Tze, and Houqiao.327 There areseveral large value added timber production facilities inthe town.

In particular, the Jinxin Company, the largestlogging company operating in Kachin State, which isalso building the road from Myitkyina to Pangwah, isbased here. Company representatives told GlobalWitness that they negotiated deals with the Myanmarconsulate in Kunming, although this may be more dueto their road building projects in Kachin State than theirlogging operations.327 One businessman went so far asto say that the Tengchong government had negotiatedwith the Burmese Government to ensure that logs weretransported to Tengchong, rather than seeing them goto places such as Pian Ma.327

Another large company operating in Tengchong, theTengchong Border Trade Development Companyappears to be state-run. Global Witness investigatorswere told by a company employee that it importsMTE-felled teak from Burma.327

19.5.2.2 Dian TanDian Tan in Baoshan Prefecture is opposite thePangwah Pass, which is probably the busiest borderpass between China and Burma. There are over 70sawmills in the town and in 2001 Global Witness saw aconstant stream of logging traffic.327 According to localsources there are 5,000 loggers working from DianTan.327

Despite the fact that the areas close to the border arevirtually logged out, in 2001 Dian Tan appeared to be

preparing for more log traffic as several companies arebuilding factories on the outskirts of the town.327 Thereis a ‘township’ checkpoint on the road between DianTan and Tengchong where all log trucks must stop sothat the logs can be checked to ensure that theyoriginate in Burma, rather than China.327

19.5.2.3 Tze TzeTze Tze is north of Tengchong in Baoshan Prefectureand is only 15 km from the Burmese border. It has been involved in the logging trade for over adecade.327 There are two roads from the town that leadto the border, at border posts seven and eight. Inaddition, the road from Gudong to Tze Tze was beingupgraded in early 2001.327 There are around 20sawmills, but the majority of timber arriving in thetown is transported on to Gudong without beingprocessed. Log traffic was heavy. In 2001 GlobalWitness investigators saw on average 12 trucks anhour heading towards the town.

19.5.2.4 HouqiaoHouqiao in Baoshan Prefecture is opposite theKambaiti border pass, and is linked to Tengchong by agood road. The border port was in the process of beingupgraded from provincial to national status, and islikely become the principle route to Myitkyina fromChina. Log truck drivers told Global Witness that thetown is an official border crossing which deals withteak sourced from the Burmese government.327 One logtruck driver explained that he had transported his loadof teak from Myitkyina, where it had arrived by railfrom Rangoon.327

The Yunnan-Tengchong Company, one of thelargest wood processing factories along the border, is based near Houqiao. The company employs morethan 100 people, and is Malaysian owned. It makeswood flooring and furniture for export to Malaysia and Japan.327

Log trucks entering China at Hoquiou border port from Burma; 2000.


19.5.2.5 GuyongGuyong town is situated at the junction of theTengchong to Houqiao road and the road to Tze Tze inBaoshan Prefecture. The town has been involved inlogging, as a log storage area, since 1994 and as aprocessing centre since 1997. In 2001 there wereapproximately 100 sawmills in the town, includingthose in Minguan Township.327 Most of the factories arevery small and relatively crude.

19.5.3 Dehong Dai Jingpo Autonomous PrefectureIn late 2000 the official cost of teak was at least $800 perm3, whereas the Chinese could get it, all costs included,for 3,000 yuan ($361) per m3 and sell the timber for5000 yuan ($602) per m3 in China, according to oneSino-Burmese businessman interviewed by GlobalWitness. This represents an instant tax-free profit ofalmost $250 for every cubic metre imported to China.According to the same source the Burmese ForestDepartment was very concerned because in places suchas Hong Kong, Vietnam and Malaysia, Burmese timbercould be bought at lower prices than in Rangoon,because of the illegal timber traffic across the Chineseborder.337

The main destination for the timber was China’sdomestic market, with wood being transported fromthe border to cities such as Kun Ming, Guang Zhou,and Shang Hai. Some of the timber was destined forexport; planks to Japan and flooring to Italy beingmentioned by a number of businessmen.337

19.5.3.1 RuiliThe economies of Ruili and Wanding boomedimmediately after the 1988 border trade agreementsbetween Burma and China. Until then, insurgentgroups controlled the border and Ruili was a supplycentre for Chinese aid to the Communist Party ofBurma (CPB). After 1988 natural resources poured outof Burma whilst cheap Chinese goods poured in. Ruiliand nearby Wanding were also key border ports for theexport of timber.

In 1993 one observer remarked that between 1,500and 3,750 tonnes of wood, mostly teak, left Burma viaWanding six days in every week. “It is possible to make aconservative estimate that at least 300 five-tonne trucks,and as many as 750, return across the border from Burmaand back into China every working day and at least halfof these, including covered trucks, carry mostly short cutlogs, some milled timber and even parquet flooring.”338

Observers in 2000 also reported significantmovements of log trucks; one account mentionedupwards of 70 log trucks coming across the border nearRuili each day.339 Although in April 2001 relatively fewlog trucks were seen coming from Burma those thatwere seen were carry cargoes of teak and were largerthan the regular Chinese five tonne trucks, thatotherwise dominate the cross border logging trade. Thissuggests that these were official transports betweenBurma and China.327

A businessman interviewed in Ruili told GlobalWitness that there had been a serious decline in thetimber trade since about 1998; there were once 100timber companies operating in the area but by early2001 only ten companies were left. The same personsaid that the crushing of the Mongkoe Defence Armyin late 2000 had had a significant impact on the trade.According to the businessman, the Burmesegovernment was firmly in control of the other side ofthe border. Chinese companies had been told by theTatmadaw to leave the forests in Burma and anyonecutting hardwood trees would be shot.337

One company visited by Global Witness that hadfixed assets in Ruili and could not therefore leave easilyneeded to get their timber from Meng’a further southalong the border, adjacent to Wa-controlled areas.However, in comparison to the level of the loggingtrade adjacent to Kachin State, this was very small.Global Witness was also told that in November 2000the SPDC had given orders that all logging and thesmuggling of timber across the borders in northernShan State, opposite Dehong Prefecture, was illegal, and that loggers were increasingly moving north, toareas fed by Kachin State, such as Pian Ma (see page 85)and Tengchong.

19.5.3.2 Yingjian There are between 50 and 70 sawmills in Yingjian Townthat are supplied by at least four feeder towns: HongBom He, Laozhaizi, Xima and Carzan.327 The timber



Making wood flooring in a small workshop in Guyong.

1/12/2018 Myanmar plans 41 new power plants in 15 years

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Myanmar plans 41 new power plants in 15 years

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ASEAN+ November 03, 2014 01:00By Khine Kyaw Myanmar Eleven20,947 Viewed

Authorities seek to boost electricity capacity by seven-fold within 15 years, whilelocals fret over environmental impactsMyanmar has mapped a 15-year power development plan to meet increasing demand, setting its sights on

boosting capacity from 4,581 megawatts to over 29,000MW in 2031.

According to Myint Oo, director at the Ministry of Electric Power, the plan will shift Myanmar’s focus from

hydropower to other energy sources, including coal, natural gas, solar, and wind power. In 2031, Myanmar is

set to have 41 power plants. Besides the capacity boost, the authorities are also focusing on reducing

transmission and distribution loss on its antiquated national grid.

“We have planned to implement many power projects exploiting available resources in Myanmar to fulfil

surging power demand in the near future,” the official said.

As of September 2014, from 814 power plants across the country, the total generation capacity was

4,581MW, of which 3,044MW (66.46 per cent) was from hydropower. High reliance on hydropower causes

unstable supply, as the reservoirs behind dams shrink during the hot season.

As of September 17, with 33 per cent of the population having access to electricity, the peak load was

2,171MW and per-capita consumption was 232 kilowatt hour.

Myint Oo said that the 15-year plan had five main objectives. First, for energy efficiency, more gas-based

power is necessary for a capacity boost in the short term while more hydropower power plants are planned

for long-term security. Second, power distribution must cover the entire nation to boost economic

development. Third, environmental and social impact assessments are required to minimise the impacts.

Fourth, distribution losses must be reduced along with energy conservation. Fifth, renewable energy sources

must be included.

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According to Myint Oo, besides the huge gap between demand and supply, the ministry has several other

challenges to address. Power losses are among them and they require an upgrade of the distribution

system. Capacity building is another, as the demand of engineers will rise in line with the emergence of new

power plants, which will use more advanced technology.

He said new technology should ensure that coal-fired and gas-fired power plants will reduce environmental,

social and health impacts. These plants, with huge capacity, will require short construction periods and be

established in areas where power demand is highest.

Environmental concerns

However, the plan calling for 12 new coal-fired power plants and 20 hydropower plants is causing deep

concerns in communities where the power plants will be located. Lack of transparency is being highlighted.

Burma Rivers Network, which comprises 15 civil society groups – including ShanSapawa Environmental

Organisation, Karenni Civil Society Network, Mon Youth Progressive Organisation, Love Salween Group and

Karen Rivers Watch – raised concerns about all six dam projects on the Thanlwin River – known as the

Salween River outside of Myanmar. These projects are Kun Long/Upper Thanlwin, Nong Pa, Mantong and

Tasang dams in Shan State, Ywathit dam in Kayah State and Hatgyi dam in Kayin State.

“The six projects proceed in violation of international dam building standards, which should ensure

transparency and respect for the rights of affected communities. The dam sites are strictly guarded, and

local people have been given no information about the projects. Downstream communities remain unaware

about impacts on water flows, fisheries and agriculture, as well the dangers of potential dam breaks,” said

Saw Tha Phoe, a spokesperson for the network.

He added that local residents in more than 60 villages in Shan state have already lost land as roads are built

in preparation for the Kunlong dam.

Salween Watch, a coalition of civil society groups, said earlier this month that the recent escalation of

fighting and displacement in Kayin state was linked to the Union army’s aim to clear the way for the planned

Hut Gyi Dam on the Thanlwin River. It also urged the Electricity Generating Authority of Thailand (EGAT) to

withdraw its investment in the project.



As a coal-fired power plant is likely to be established in the Dawei Special Economic Zone, local residents are

bracing for negative impacts. Recently, they have experienced negative impacts from a coal mine in the

region.

“This project will violate human rights and destroy the environment and livelihoods of the people. If such a

project will be resumed, both the [Myanmar and Thai] governments will be judged very harshly by history,”

said Thant Zin, coordinator of the Dawei Development Association.

EcoDev, a non-government organisation which focuses on environmental issues in the country, has been

adamant in its opposition to coal-fired power plants.

“We are against the coal-fired power plants as they will damage the environment a lot. All the land, water, and

air near the plants will become polluted. And they will severely harm the health of people and animals living

nearby. And the worst thing is that implementation of such plants may lead to political conflict if the local

residents do not agree,” said Win Myo Thu, chief executive officer of EcoDev.

Village residents are pressing for clear plans; how the projects will be carried out and who will be held

accountable for any mishaps. More protests are expected until their questions are answered, the said.

Locations

The authorities have mapped out the potential locations for the 41 new power projects to be built from fiscal

year 2016-17 to FY 2030-31.

The 20 new hydropower plants – with combined capacity of 6,270MW – will be established in Mandalay

Region and three states: Kachin, Kayin and Shan.

Eight of 12 planned coal-fired power plants, with combined capacity of 12,780MW, will be located in Yangon

and Tanintharyi regions, with four projects each. Yangon’s Thilawa area will become home to three new coal-

fired power plants – one in Thilawa, one in Kyauktan, and one in the Thilawa Special Economic Zone. The

fourth coal-fired power plant in Yangon Region will be established in Kyunchankone and is expected to

generate 3,270MW.

Ayeyawady Region will become home to two new coal-fired power plants. Both Sagaing and Shan (East)

regions will get one.



Foreign participation

All investment plans are, however, proceeding as planned and several Thai companies are keen to

participate.

Thailand-based Ratchaburi Electricity Generating Holding recently signed a memorandum of understanding

(MoU) for the feasibility study and development of the 2,640-MW Myeik clean coal-fired power plant project

in Tanintharyi region. EGAT stays on course with the Hut Gyi project.

Thailand's largest oil company PTT Group also showed its interest in investing in a power plant. Together

with its partners – Japan's Marubeni Corp and Ayar Hintha Co – it signed an MoU in October with the

Ministry of Electric Power to conduct a feasibility study for an 1,800MW coal-fired power plant.

“Among the 20 new hydropower plants, a joint venture agreement for the Upper Thanlwin project in Shan

state was signed. The MoA [memorandum of agreement] was signed for six more projects. The MoU was

signed for another 10 projects. Two are in the feasibility study stage. The last one – Dee Doke project in

Mandalay Region – is still at the pre-feasibility stage,” said Myint Oo.

According to Myint Oo, the MoU to develop 10 coal-fired power plants has been signed.

In the period, Myanmar sets to generate 1,301MW from natural gas, 520MW from solar power and 4,032MW

from wind.

The MoA was signed for two solar power projects with capacity of 520MW. Among them, 300-MW Nabuaing

and Wundwin plant will be established in Mandalay Region while the 220-MW Minbu plant will be set up in

Magway Region.

In August, US-based ACO Investment Group signed an agreement with the Ministry of Electric Power, paving

the way for two 150-megawatt solar energy plants that will require an investment of US$480 million.

In 2013, Green Earth Power (Thailand) agreed to invest $275 million in a 210-MW solar farm.

The MoUs were also signed for three new wind power projects with combined capacity of 4,032MW.

To the official, the investment is possible in three ways: ventures owned by the ministry, investment by local

enterprises under the Build, Operate and Transfer (BOT) model, and investment by foreign firms through BOT



joint ventures. To award approval, the ministry will take into account the electricity cost, generation

efficiency, and environmental and social impacts.

Foreign investors can submit their proposals to the ministry which must be attached with location maps,

features of the projects and approval from the related state or region government. The ministry will review

the proposal and submit reasonable ones to the economic committee of the Union Cabinet to get approval

in principle.

Bidding process

After getting approval in principle, a draft MoU will be discussed between the parties and dispatched to the

Ministry of National Planning and Economic Development, Ministry of Finance, and Union Attorney-General

Office for further approval. With the ministries’ approval, the MoU will be submitted to the economic

committee of the Union Cabinet to get approval for signing the MOU. With the approval of the economic

committee, the MOU will be submitted to a Union Cabinet meeting and can be signed if approved at the

meeting.

After that, the investor must conduct a project feasibility study and submit a report to the ministry within a

targeted date stipulated in the MoU. If the investor fails to do so, the signed MoU will be automatically

dissolved.

The project feasibility study report will be reviewed by the ministry. If the ministry assumes it is technically

and commercially feasible, the parties can carry out signing the MoA. After signing the MoA, the investor

needs to assign an internationally credible organisation other than contracting parties and countries to

conduct environmental impact assessments.

“Transparency is crucial. While conducting the assessments, the investor needs to transparently elaborate

the project plans, benefits and impacts caused by the construction works, mitigation measures for

environmental and social impacts, resettlement plans, etc. to local residents, authorities concerned, and

media personnel,”

The environmental and social impact reports will be sent to the Ministry of Environmental Conservation and

Forestry for comments and recommendations. After approval from the ministry, the agreement or joint

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Thai businesses should take a more aggressive approach to penetrating Myanmar before other investors get too far ahead, accordingto Thailand's ambassador to Myanmar, Visanu Suvanajata.

Although Thailand and Myanmar are neighbours, Thai investment in the country remains small with fresh investment pouring in atslower pace compared with other countries.

"Thai investors should hurry otherwise they will have no place to stand as business opportunities shrink," says Mr Visanu.

Myanmar's fast development has attracted considerable foreign direct investment over the past decade.

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The outcome of the Nov 8 general election is not expected to affect development plans as the new government is highly likely tofollow the country's roadmap, which has significantly boosted the economy over the past years.

Myanmar is expected to enjoy growth of 8% and continue to grow at such a pace for the next five years, says Mr Visanu in Yangon.Global management consulting firm McKinsey & Company forecasts Myanmar's economy will quadruple by 2030.

Mr Visanu says that under the development plans, Myanmar intends to be a more modern agriculture and agro-industry destination,with investment highly welcome.

Tourism in Myanmar is also on the rise with the number of foreign visitors increasing sharply to 2.8 million foreigners visited thecountry last year, up from only 800,000 a year earlier.

However, accommodation is still insufficient, especially premium-quality hotels, making investment in the hotel sector a lucrativemove.

Mr Visanu says many high-rise buildings in Yangon and big cities are coming up to serve the growing economy. In 2013, 250 buildingswith more than 16 floors applied for construction licences; the number rose to 700 last year.

The heavy construction means huge demand for raw materials such as cement and steel.

"Myanmar will be a manufacturing hub for foreign investors and several of them will relocate their plants from Thailand to Myanmar,thanks in large part to the competitive labour wage of only US$3 per day," he says.

Besides, foreign companies that use as much as 90% local content can obtain tax privileges under the Generalised System ofPreferences developed countries offer to Myanmar, he said.

The growing economy has resulted in costly land prices, especially in big cities, and this could bar Thai investors, but other foreigninvestors may regard such costs as affordable.

He suggests Thai companies open a representative office to assess local market sentiment and see the real picture.



"Myanmar has changed and they are more welcoming to foreign investors. Regulations related to trade and investment as well as thefinancial system have been modernised," he says.

Foreign investors are able to lease land for up to 70 years and they can hold as much as an 80% stake in a joint venture. The labourforce is large at 34.5 million, representing 67% of the population.

Major foreign investment in Myanmar covers energy, garments and ready-to-eat products, with China leading the pack.

Wichai Kanrahong, an official at the Office of Commercial Affairs in Myanmar, says Thai accumulated investment over the past 20years is significant with 49 enterprises, worth a total $3.1 billion.

However, investments has been slow compared with other countries, especially Vietnam, which is quite aggressive in investing inMyanmar.

Mr Wichai says in order to stay competitive, Thai investors should set up their own factories in Myanmar to both serve the localmarket and explore new opportunities in India, China and Europe.

He suggests Thai investors divide their investments into three stages. First, set up factories in border provinces in Thailand. Second,relocate factories to provinces in Myanmar's border areas. Third, set up plants in industrial estates in order to enjoy tax privileges ifthe products are for export.

Thai exports to Myanmar over the past decade have increased considerably, reaching $4.2 billion in 2014. Top exports are oil,cosmetics and beverages.

"Thai businessmen have to be more active, dare to explore new chances as prospects in Myanmar are expected to be bright, so don'tlose the opportunity," he says.

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More Thai investment for Myanmarbusiness December 19, 2016 01:00By ACHARA DEBOONME THE NATION

Another office will be opened in Hanoi next year and another in Jakarta in 2018.

“Asean is attractive with its abundance of resources and quality workforce, offering cost competitiveness

and fast-growing markets and economies,” said Chokedee Kaewsang, deputy secretary-general of the

THE BOARD OF INVESTMENT expects to open an overseas office in Yangonearly next year, as part of its strategy to promote Thai investment in Myanmarand the rest of Asean.

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investment-promoting agency. “Meanwhile, all countries, especially CLMV [Cambodia, Laos, Myanmar and

Vietnam] have been more open to |foreign investment,” he said in an e-mailed interview.

Thailand’s direct investment in more than 35 countries in 2015 topped Bt174.3 billion, and Bt21.3 billion or

12.2 per cent went to Asean, according to Bank of Thailand data. That was down from 47.69 per cent in

2014. In the first nine months of the year, however, investment in Asean reached Bt197.7 billion, or 55.33 per

cent of the total.

In their quest for overseas footings, Thai investors also put special attention to Asean.

At its overseas offices, the BOI aims to provide in-depth information on that particular market’s economic

status, investment policies, opportunities, rules and regulations, and business culture. For Myanmar in

particular, the BOI has organised business trips and consulting clinics.

“Myanmar is among the top investment destinations in Asean, thanks to its high economic growth rate, fast-

growing domestic market, and competitive edges in natural resources and labour and a supportive border

transport network. Importantly, internal demand is growing briskly, a positive for Thai companies,” Chokedee

said.

Of the Bt197.7 billion invested in Asean in the first nine months of this year, nearly Bt14 billion went to

Myanmar.

According to the BOI, under training by its Thai Overseas Investment Services Centre launched in 2011, most

of the participating businesspeople who actually put money overseas picked Vietnam or Myanmar as their

investment destination. The areas of interest are textiles and agricultural processing.

A total of 409 businesspeople have participated in the training scheme since it was initiated and 88 have

materialised investment plans.

Chokedee said the BOI was also tasked to promote Thai investment elsewhere, such as the other three

CLMV countries, other destinations in Asean, and new markets including Uganda, Sri Lanka, Mongolia,

Mozambique and Uzbekistan.

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Investment boom in MyanmarEconomy October 20, 2014 01:00By Achara Deboonme The Nation Y21,967 Viewed

More Thai companies are wooed to pursue business opportunities in Myanmar,amid expectation of smooth political transitionThailand’s total investment in Myanmar has nearly reached US$10 billion, making the Kingdom the second-

largest source of foreign direct investment (FDI) into the country after China, whose investment swelled past

$14 billion.

Pisanu Suvanajata, Thailand’s ambassador to Myanmar, reckons the Thai ranking may not last too long as

the Myanmar Investment Commission (MIC) has granted approvals recently to projects by investors from

Japan, South Korea and Singapore.

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“Myanmar is not our choice. Indeed, it is choosing who should be allowed to invest here,” he said in an

interview.

On the main road in Yangon, billboards flaunt the names of big Thai companies already making their

presence felt in the country – PTT, Charoen Pokphand Group, Siam Cement Group, Siam City Cement

(Insee), Bangchak Petroleum, Boon Rawd Brewery, Bangkok Dusit Medical. Signs of Siam Commercial Bank,

the main sponsor of the 2014 Asean Summit, are frequently spotted, though the bank was not among nine

foreign banks awarded limited licences. They are side by side with billboards of other foreign companies like

Ooredoo, Telenor, Coca-Cola, Pepsi and Samsung. Foreign companies have either opened offices in new

high-rises or old houses.

According to Myanmar’s Directorate of Investment and Company Administration (DICA), as of August 2014,

772 foreign companies have so far invested more than $49.4 billion in 12 sectors, including oil and gas,

manufacturing, mining, hotels and tourism, transport and logistics, real estate, livestock and fisheries,

agriculture, construction and services. As of June, more than 700 foreign businesses had received

permission to invest in Myanmar.

During July and August, the $2.6 billion investments DICA approved came from companies in 13 countries –

China, Thailand, Singapore, the United Kingdom, South Korea, Malaysia, the Netherlands, India, Japan,

Canada, Luxembourg, the Philippines and Libya.

There are 3,032 foreign companies/branch offices and 32 foreign-invested joint ventures in Myanmar.

Companies from 36 countries have invested in Myanmar, with those from China topping the list with

combined cumulative investment of $14 billion.

Full-fledged inroads

Foreign companies are flocking to Myanmar, spurred by the rising wages in Thailand and other neighbours

and the establishment of industrial estates there, aside from political and economic reforms introduced by

the administration of President Thein Sein.

FDI rose from $901 million in 2010 to $2.62 billion in 2013, according to World Bank data.

The Myanmar Investment Commission (MCI), the FDI promoter, expected FDI in the 2014-15 fiscal year,

starting April 1, to reach $4 billion. In September, it revised up the target, expecting the FDI to reach $5 billion

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when the fiscal year ends next March. The FDI is also expected to show 14 per cent annualised growth from

now until 2030, to push the aggregate amount to $100 billion in the next 15 years.

According to DICA data, not all foreign companies have fully invested the approved investment amount.

While 51 Chinese companies have invested $14.38 billion in the country, 44 Thai companies have invested

only $3.1 billion, making it the fourth largest in terms of existing enterprises. In contrast, the $6.5-billion

investment by 67 Singapore firms made Singapore the second-largest source of foreign investment, and the

$6.2 billion by 93 Hong Kong firms made Hong Kong the third-largest.

Myanmar is considered untapped as both a production base and a consumer market in Southeast Asia. For

manufacturing companies, the low wage of about $70 a month is the main attraction. Meanwhile, though the

per-capita gross domestic product remains low at about $900, the population of more than 50 million

presents a huge untapped market for a variety of products.

Economic outlook

Economists have also been upbeat on the country’s outlook.

After the 8.25 per cent growth in the 2013-14 fiscal year, Myanmar’s economic growth is expected to

average 8.25 per cent in the next few years, led by rising gas production and investment, according to the

International Monetary Fund.

At the seminar on “Gateway to the new Construction Era” last week in Yangon hosted by Thailand-based

Millcon Industry, Bangkok Bank executive vice president Kobsak Pootrakul was more upbeat on the GDP

growth acceleration. As the country witnesses deeper trade integration and FDIs, he expects more than 10

per cent growth rate in the next 10 years.

“The IMF expects FDI to Myanmar to grow by $5 billion per annum in the next 5 years. Personally, I expect it

to be $8 billion per year, judging from conversation with potential investors who have shown their interest in

investing in the country,” he told the audience.

The Thilawa Special Economic Zone (SEZ) will be the turning point for FDI in the country, Kobsak noted.

“Most investors are concerned about infrastructure and land difficulties. Once completed, Thilawa should

ease the concerns,” he said.



Industrial estates

Located about 20 kilometres southeast of Yangon, Thilawa is one of three major SEZs planned by the Thein

Sein government to boost foreign investment, aside from Dawei, south of Yangon, and Kyaukpyu, in Rakhine

state. Among the three, Thilawa – covering 2,400 hectares – has shown the fastest development, with

construction work for the second phase starting on October 1 this year for completion in the middle of 2016.

“The work is slow due to heavier rainfall than in Thailand,” said Takashi Yanai, president and CEO of

Myanmar Japan Thilawa Development Ltd which develops the zone.

In his presentation to Thai investors last week, he said that 23 companies from nine countries have signed

contracts to construct factories in Thilawa, including two companies from Thailand and three from Taiwan.

Two Myanmar companies are among them.

He acknowledged that the infrastructure is a major concern. Thilawa Port is being improved while a 50-

megawatt power plant will be constructed to ensure sufficient power supplies to all manufacturers. A new

power substation will be built aside from an existing one, while the distribution grid will be improved. The

road around the area is being expanded, while gas pipelines and water pipelines would be extended to the

area.

“The infrastructure will be more like in Thailand and my intention is to have more companies from Thailand,”

Yanai said.

Sumitomo Corp, Marubeni Corp and Mitsubishi Corp are leading the Thilawa project in cooperation with the

Japan International Cooperation Agency (JICA). It is designed to accommodate green manufacturing, while

Kyaukpyu will be home to petrochemical industries.

According to Thai Ambassador Pisanu, Japan’s role in Thilawa has provided assurance to potential

investors. In the interview, he added that the Myanmar and Thai governments would resume joint operations

on Dawei in November, after the project had been halted since last year because Italian-Thai Development

decided to reduce its role from a 75-year concessionaire to a developer.

“Dawei is the most complicated project among the three, designed to house heavy industries,” he said. “But it

is among the three mega-sites strategically designed to support the radical changes in Myanmar’s politics

and economy.”

Remaining risks



While infrastructure such as power supply and communications are still unstable in Myanmar, other risks of

doing business there remain significant.

Toshikazu Gocho, a foreign investment adviser at the Japan External Trade Organisation’s office in Yangon,

told The Yomiuri Shimbun recently that the government is loosening restrictions on foreign funding of retail

operations, but “there are many difficult cases”. He referred to such problems as administration officials not

acting in accordance with the law.

Another problem involves the lack of luxury hotels, even in Yangon, which business clients from overseas

tend to use.

Bangkok Bank’s Kobsak said at the seminar that Myanmar would sustain the economic growth only through

the improvement of road and rail networks as well as electricity supply. Meanwhile, the government must

also follow the right policies, to balance infrastructure investment and long-term economic cost. Excessive

investment could cause heavy fiscal burden, as Myanmar is witnessing fiscal deficit. Meanwhile, huge FDIs

would encourage local companies to invest more, but excessive loan growth – over 20 per cent in the past

few years – could weaken the financial sector. Authorities should also respond to the requirement for more

skilled labour.

“Myanmar should get the economic foundation right and this must be done in 10 years, compared to 30

years in Thailand and 20 years in Vietnam,” he said. “If this is achieved, Myanmar should see the next golden

decade.”

According to Pisanu, some laws are outdated but Myanmar has been acting fast. What is of greatest

concern to Thai investors is political stability, as the country is attempting to seal a nationwide ceasefire deal

ahead of the election next year. He is certain, however, that the country would see a smooth political

transition.

He was referring to the rapid changes in the past few years, which clearly showed that it is not the issue

between the government and the opposition. The situation in the country is now the issue between pro-

reform and anti-reform groups.

“Thein Sein and his Cabinet members are all for reforms, including opposition leader Aung San Suu Kyi and

the Myanmar people. Those who stand in the way will be the losers. There is the political will that Myanmar

should push forward with reforms,” the ambassador said.

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Thai companies urged to invest in BurmaThai companies urged to invest in Burma

A sign showing the road leading to Thailand is seen near Dawei in southern Burma, close the site of theA sign showing the road leading to Thailand is seen near Dawei in southern Burma, close the site of theThai-backed special economic zone and deep-sea port, on 19 November 2011. (Photo: Reuters)Thai-backed special economic zone and deep-sea port, on 19 November 2011. (Photo: Reuters)

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Related Stories

The Thai private sector is being urged to set up industrial estates or special economic zones(SEZs) in Burma as the neighbouring country emerges as a magnet for foreign investment.

Thai Deputy Prime Minister Somkid Jatusripitak said on Friday at a seminar on Thailand- -Burma cooperation in Rangoon that Thai investors should pay more attention to Burma as adestination for investment, as the country is making large strides on its labourcompetitiveness and rich raw materials.

He said Thai investors should thinking about establishing industrial estates in Burma in orderto further Thai investments or investments from other countries that are expected to flood intoBurma after the establishment of the new government.

“Myanmar under the new government is more open to foreign investment, while thegovernment itself is committed to improving and upgrading its domestic regulations andinvestment laws to facilitate private investment,” Somkid said during his four day visit toBurma, which began Thursday.

“It is a good time for Thai investors to invest in Myanmar, and government units such as theIndustrial Estate Authority of Thailand should team up with private firms to develop SEZs inMyanmar.”

According to Somkid, the Thai government is ready to negotiate with its Burmesecounterparts to upgrade industrial estates to SEZs if any Thai investors agree to establish theindustrial estates there.

In the meantime, Somkid said the Thai government is also committed to going ahead withplans to develop SEZs in Mae Sot in Tak province to parallel the SEZ in Burma’s Myawaddy.

He said the new economic corridor covering India, Burma, Thailand, Laos and Vietnam willalso create prosperity among those countries.

Thailand and Burma on Thursday agreed to pursue logistics development in Burma, aimingto bolster connectivity from India and Vietnam to Thailand.



Dawei SEZ development loan on track

Thai developer seeks update onDawei plan

Thai deputy PM to lead businessdelegation to Burma

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The two governments also agreed to continuethe Dawei development projects.

WHA’s chief executive and vice chairmanJareeporn Jarukornsakul said WHA isconducting feasibility studies on establishing anindustrial estate in Burma, which will concludenext year.

Vikrom Kromadit, chief executive of industrialestate developer Amata Corporation Plc, saidthe group has visited Burma several times andsees the neighbouring country as a propervenue for Thai investment, particularly due tothe low wages and efficiency of Burmeseworkers.

Burma’s location also enables shipments to India, Africa, the Middle East and countriesfarther west.

Burma is also the richest country in ASEAN in terms of natural resources — especially in oil,gas and coal — and it is the only ASEAN country that borders both China and India, Vikromsaid.

This story was originally published by the Bangkok Post here.

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1/12/2018 Cambodia, Laos & Myanmar – 2016 Foreign Investment Outlook - Cambodia, Laos, Myanmar

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Cambodia, Laos & Myanmar – 2016 ForeignInvestment OutlookBy ASEAN Brie ng On Apr 15, 2016 Last updated Nov 27, 2017 뀢 2,131

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Cambodia, Laos and Myanmar are amongst ASEAN’s smaller economies, yet all different and facing different issues.



Taken as a trio, their collective GDP performance is still less than that as China’s Yunnan Province, which lies to the

north of Cambodia and Laos, and also borders with eastern Myanmar.

Neither of these countries met the proposed ASEAN Economic Compliance deadline for reducing tariffs as they were

supposed to at the end of 2015, mainly because of local market concerns that in doing so opens them up to fully comply

with the ASEAN-China Free Trade Agreement and the importation of thousands of Chinese product categories at zero

tariffs – a situation that could spell disaster for already fragile economies.

Myanmar, with its population of 53 million, has amongst them very few semi-skilled workers – much of the population

remains uneducated and are essentially subsistence farmers. That is a huge problem when looking at manufacturing

using local labor. Laos has similar issues, coupled with a tough, mountainous terrain, poor infrastructure and no seaport

access. Cambodia is marginally better, yet productivity issues remain a problem.

However, all that said, well established foreign investors in countries such as Vietnam, with years of experience in the

country, do see opportunities for investing in these more dif cult climates. In this article I take a look at the investment

environment in each.

Cambodia

These ASEAN countries have other problems too – a lack of productivity, and some of the lowest

human capital rankings in the world.



Cambodia is the brightest star amongst these three countries, with the Asian Development Bank predicting a GDP

growth rate of 7.2 percent this year. The country is also enjoying a low in ation rate.

Shipments of garments and footwear produced in Cambodia rose by 11.0 percent year on year, while growth in total

merchandise exports reached 14 percent, slowing from 18.3 percent. in 2014. Tourism has also declined, while

agriculture is suffering from an extended period of low rainfall.

Strong Domestic DemandHowever, domestic demand remains strong, showing a 33.3 percent year on year expansion of credit to the private

sector in May and indications of higher growth in imports. While the growth of garment manufacturing, construction,

and services—in particular tourism, nance, and real estate services— continues to drive growth in GDP, the pace in the

garment and tourism industries seems to be moderate.

The garment industry faces increased competition arising from the appreciation of the US dollar, in that the Cambodian

economy is heavily dollarized, and from other low-wage competitors including Myanmar.

Asian investment dominates, with the largest providers of FDI being Taiwan, China, Hong Kong, South Korea and

Malaysia. FDI from Western nations remains relatively low, although of these, the Americans tend to be more visible.

An advantage Cambodia does have within its textiles industry is that it is the only country where garment factories are

monitored and reported based on national and international standards.

This has allowed Cambodia to secure its share of quotas for exports to the U.S. through the US-Cambodia Trade

Agreement on Textiles and Apparel which links market access to labor standards – an issue to consider for MNC

businesses running ethical labor models.

However, this is offset by the fact that there is a very limited domestic textile industry, and almost complete

dependence on imported textile material. To deal with this, the Garment Manufacturers Association in Cambodia

(GMAC) is establishing a specialized training institute to train garment workers.



The institute is in Phnom Penh Special Economic Zone and will be completed by late 2016. It aims to train 1,600

garment workers in the rst three years – meaning that garments and textiles manufacturing may well prove to be a

bright spot from 2017 onwards as a strategic move by related MNCs looking to establish a low cost production base in

Asia.

LaosLaos is undergoing a construction boom with both infrastructure, especially electricity supplies, and real estate projects

currently driving its economy forward. Much of this development is being provided by China, and is contributing to an

expected GDP growth rate of seven percent for 2016. There are several China funded hydropower plants under

construction, and an increase in tourist arrivals up 11 percent YoY to two million in the rst ve months of 2015 have

also helped the economy, driven by an increase in air services to the country.

Mine output of copper, gold, and silver also rose in the rst half, though prices for the metals have declined. On the

downside, drought during the planting season is expected to hurt rice production and could also stem the water ow

needed to generate hydropower, which it has invested in as a commodity to sell to China, Thailand and Vietnam.

Tourism industry remains a strong growth areaOn a brighter note, the tourism industry remains a strong growth area and is heavily backed by the Government.

Opportunities lie here for foreign investors in this industry, and land remains inexpensive. If infrastructure and

investment can be provided, including the development of eco-friendly resorts, hotels and so on, catering for Asian and

other foreign tourists at a higher level of comfort can be expected to produce results.

Myanmar

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Myanmar has just elected its rst civilian President in more than 50 years, bringing an end to the rule of the Generals.

With Aung San Suu Kyi also expected to take the helm at some point, these new political developments are set to usher

in a change of regional dynamics in Myanmar – the previous President, General Thein Sein has long been close to China.

It remains to be seen which direction the country will now take.

The country also faces signi�cant problemsSevere ooding at the end of 2015 has hampered crop production, a huge issue where much of the population are

essentially subsistence farmers. Rice production represents some 97 percent of total food grain production, while

energy supplies are extremely poor – 45 million of the total population of 53 million are without electricity.

Myanmar also suffers from a very low human capital ranking – according to the World Economic Forum, the country

ranks 112 out of 124 nations. This means education is going to be a key necessity. There are some bright spots – several

Thai garment manufacturers have relocated to Yangon citing lower wages and production costs – bearing in mind

generators and other self suf cient energy resources needed to be installed. However, at present, despite its allure,

Myanmar remains a dif cult country at present to do business.

Warring tribal areas in the north of the country continue to create problems, with occasional ghting

spilling over into Chinese territory, much to Beijing’s considerable annoyance.

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The new Government needs to take stock, produce a sustainable foreign investment culture, and then look at raising

funds to secure much needed infrastructure development investments. Manufacturing meanwhile will in time be a

possibility – but not until a better quality of education and training in skill sets can be introduced on a mass level.

Foreign opportunities currently lie mainly in basic trading.

Summary

Each of these countries, while enigmatic and suggesting high GDP growth rates, are doing so on the back of a very low

starting point. Concerns have to be raised as to global warming issues in all of them – Cambodia and Laos are already

experiencing drought, and serious oods have ruined large swathes of Myanmar’s agricultural industry. However, there

are bright areas – Cambodia is becoming more developed and has a higher level of sophistication and business

knowledge, and could be an alternative to manufacturing in Vietnam. Laos meanwhile offers opportunities in the

tourism sector, and Myanmar will surely need assistance in education and skills training.

However, it is important to note these are not markets for the new-to-Asia investor. These countries will all require a

high degree of local sensibility in order to succeed, meaning several years on the ground experience will be needed to

uncover where the opportunities lie and how to exploit them. In essence, ground-breaking investments in these

countries is still the preserve of entrepreneurs, and MNCs with deep pockets in infrastructure development.



Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates,

a full service foreign direct investment practice with 28 of ces across

ASEAN, China and India. The practice advises foreign investors in

these markets with research, legal advisory, tax advisory and related

business services, including due diligence, compliance, accounting,

payroll and related assistance. Please email to [email protected] or

visit our website at www.dezshira.com .

To obtain a complimentary subscription to Asia Brie ng and Chris’s

updates, please click here.

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1. Home2. » Business3. » Domestic4. » Myanmar ripe for Thai investment, says envoy

Myanmar ripe for Thai investment, says envoy

ByBangkok PostOn Monday, 2 November 2015

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Thai businesses should take a more aggressive approach to penetrating Myanmar before other investors get too far ahead, accordingto Thailand's ambassador to Myanmar, Visanu Suvanajata.

Although Thailand and Myanmar are neighbours, Thai investment in the country remains small with fresh investment pouring in atslower pace compared with other countries.

"Thai investors should hurry otherwise they will have no place to stand as business opportunities shrink," says Mr Visanu.

Myanmar's fast development has attracted considerable foreign direct investment over the past decade.




The outcome of the Nov 8 general election is not expected to affect development plans as the new government is highly likely tofollow the country's roadmap, which has significantly boosted the economy over the past years.

Myanmar is expected to enjoy growth of 8% and continue to grow at such a pace for the next five years, says Mr Visanu in Yangon.Global management consulting firm McKinsey & Company forecasts Myanmar's economy will quadruple by 2030.

Mr Visanu says that under the development plans, Myanmar intends to be a more modern agriculture and agro-industry destination,with investment highly welcome.

Tourism in Myanmar is also on the rise with the number of foreign visitors increasing sharply to 2.8 million foreigners visited thecountry last year, up from only 800,000 a year earlier.

However, accommodation is still insufficient, especially premium-quality hotels, making investment in the hotel sector a lucrativemove.

Mr Visanu says many high-rise buildings in Yangon and big cities are coming up to serve the growing economy. In 2013, 250 buildingswith more than 16 floors applied for construction licences; the number rose to 700 last year.

The heavy construction means huge demand for raw materials such as cement and steel.

"Myanmar will be a manufacturing hub for foreign investors and several of them will relocate their plants from Thailand to Myanmar,thanks in large part to the competitive labour wage of only US$3 per day," he says.

Besides, foreign companies that use as much as 90% local content can obtain tax privileges under the Generalised System ofPreferences developed countries offer to Myanmar, he said.

The growing economy has resulted in costly land prices, especially in big cities, and this could bar Thai investors, but other foreigninvestors may regard such costs as affordable.

He suggests Thai companies open a representative office to assess local market sentiment and see the real picture.



"Myanmar has changed and they are more welcoming to foreign investors. Regulations related to trade and investment as well as thefinancial system have been modernised," he says.

Foreign investors are able to lease land for up to 70 years and they can hold as much as an 80% stake in a joint venture. The labourforce is large at 34.5 million, representing 67% of the population.

Major foreign investment in Myanmar covers energy, garments and ready-to-eat products, with China leading the pack.

Wichai Kanrahong, an official at the Office of Commercial Affairs in Myanmar, says Thai accumulated investment over the past 20years is significant with 49 enterprises, worth a total $3.1 billion.

However, investments has been slow compared with other countries, especially Vietnam, which is quite aggressive in investing inMyanmar.

Mr Wichai says in order to stay competitive, Thai investors should set up their own factories in Myanmar to both serve the localmarket and explore new opportunities in India, China and Europe.

He suggests Thai investors divide their investments into three stages. First, set up factories in border provinces in Thailand. Second,relocate factories to provinces in Myanmar's border areas. Third, set up plants in industrial estates in order to enjoy tax privileges ifthe products are for export.

Thai exports to Myanmar over the past decade have increased considerably, reaching $4.2 billion in 2014. Top exports are oil,cosmetics and beverages.

"Thai businessmen have to be more active, dare to explore new chances as prospects in Myanmar are expected to be bright, so don'tlose the opportunity," he says.

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thailand interested in myanmar especially in karen state

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