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Myanmar is pushing for industrial competence amidst tensions over agricultural and biodiversity losses, says Angelica Buan in this article.
The 40th largest country in the world, Myanmar is opening up to global industrialisation. It is in a good position, at least geographically. The country is bordered by India, Bangladesh, China, Laos and Thailand.
Mostly thriving on agriculture and mining, Myanmar has been low key in terms of rubber production, since it produces low grade rubbers, which fetch lower price in the market.
It has not catapulted to attention as Thailand, Indonesia, Malaysia, Vietnam and India. For this reason too, the country’s rubber sector has not been competitive with other ASEAN neighbours.
A 2013 USAID Burma-commissioned report noted Myanmar’s low farm productivity. It surveyed that the annual agricultural income per worker is at US$194 (2011/2012 multiagency data). However, Myanmar’s agricultural sector, with a significant portion comprised of small holder farming, has supported a third of the country’s Gross Domestic Product (GDP) and 15% of total export earnings, according to Global Witness data.
Based on the CIMB Asean Research Institute’s report in 2012, Myanmar’s plantation industry focuses on rubber and teak sectors.
Amongst Myanmar’s regions where rubber has been cultivated even earlier than in other adjacent states is the Tanintharyi Division (formerly known as Tenasserim), which has climate and soil quite ideal to cultivating vast oil palm and rubber plantations. But it unfortunately became the leeway for land grabbing, deforestation and displacement, according to the 2014 report of UNCHR.
What’s special about Tanintharyi is that it has preserved its biodiversity while providing ample livelihood for its close to 1.8 million population.
Industrialising the landscape
Dawei (formerly Tavoy), Taninyharyi’s capital, was an idyllic, picture postcard-scenic city that had been a vital trading artery during the colonial times, and later on a trading gateway with Thailand via Ranong and other border towns, serving the rubber and the oil palm industries. It traditionally has three industries: agriculture, fishing and mining, according to an article published by Bangkok-headquartered Foundation for Ecological Recovery.
However, Dawei’s landscape has shifted to an industrial hub with the set-up of the Dawei Special Economic Zone (SEZ), which has an initial investment of US$8.6 billion.
Further development of the hub would hit an infrastructural investment estimated at over US$50 billion, according to a 2012 paper authored by Myanmarese researcher Puang Ku and Netherlands-headquartered Transnational Institute.
The city is sited in the South easternmost part of Myanmar that borders Mon State to the North, Thailand to the East, and further to Cambodia, Vietnam and the rest of mainland Asia. Likewise, it provides access to the Andaman Sea to the West, which for Thailand, a key proponent in DSEZ, is a channel route to India and the Middle East.
The former recluse state has been opened up to welcome large scale investments, thus, converting it to a manufacturing facility hub and international container port.
Initiated in 2008, the Dawei SEZ is a joint project by the Italian-Thai Development (ITD) Company, which was granted a 75-year concession to develop the area, and the Thai and Myanmar governments. It was hatched on a total land area of 204.51 sq km.
Project development would be carried out in three phases, each spanning ten years, from 2010 to 2019. After much negotiations and mixed reception towards the Dawei SEZ project, the initial phase development was launched in August this year.
It will involve construction of a small port, power plants, a two-lane road to Thailand, an LNG terminal, and other initial infrastructure for labourintensive industries (textile, garment, food).
Dawei SEZ: weighing down on local rubber farming
The massive project, while promising industrial growth for Myanmar, has reportedly cost the livelihood for the agricultural workers in the city, not to mention affected its biodiversity and displaced dwellers, to say the least. According to reports, Dawei SEZ has directly affected some 18 villages or close to 4,000 households and the relocation of more than 23,000 individuals. Affected too are the rubber plantations that stretch across Dawei and its outskirts.
Dawei thrives on small agriculture processing industries, including rubber processing and trading. According to the Transnational Institute, an estimated 85% of local livelihoods rely on plantation agriculture.
Another report, Voices From the Ground: Concerns Over the Dawei Special Economic Zone and Related Projects produced by the Dawei Development Association (DDA), estimated that 36 villages comprising about 43,000 residents would be directly affected by the Dawei SEZ and related projects; while 71% households covered by the report anticipated losing partly or all of their land due to the project.
An article published online by the Human Rights Foundation of Monland (Rehmonnya) described that at the enactment of the MOU in 2008, the Dawei Project Watch (DPW) organisation reported on the confiscation of some “8,000 acres of paddycultivated lands, 10,000 acres of rubber plantations, 12,000 to 14,000 acres of cashew-nut plantations, and over 150,000 acres of orchid plantations” by authorities from Dawei SEZ and ITD.
Reaping the benefits
The consortium of private developers that will be kicking off the establishment of infrastructure within the zone, said that the project is expected to contribute up to 5% of Myanmar’s GDP by 2045.
To encourage investors and ensure the success of Dawei SEZ, perks are being dished out as encompassed in the Framework Agreement signed between ITD and Myanmar Port Authority, Ministry of Transport, in 2010 for the development of the Dawei Deep Sea Port, Industrial Estate, and Road and Rail Link to Thailand on a BOT basis.
As well, the Economic Zone Law enacted by the Myanmar Government in 2011 includes tax exemptions, land ownership, facilitation of work permits, privilege to import foreign management and skilled labour, to cite a few salient points.
According to a project update presented by ITD and DDC in 2013, Myanmar will be benefiting from the project through local employment, increased foreign direct investments, tax/benefit sharing with the Myanmar government, development of resources, knowledge and technology transfer, and growth of local businesses and industries.
In addition, the consortium said that investments in key industries, including automotive, electronics, metals, plastics, chemicals, refinery, fertilisers, pharmaceutical products and rubber, are also expected to flourish, over the long-term period in Dawei SEZ.
Losing forestland to rubber/oil palm plantations
In a related report, a 50,000-acre land at the Thein Baw Oo village tract, also in Dawei, is to be levelled for a large-scale rubber plantation to be operated by Myanmar Mahar Dahna in a joint venture with Thai Hua Rubber Holdings, a company that operates rubber plantations and manufactures rubber-based products in Thailand. Already, 5,000 acres have been given the go-ahead signal to be developed for the first phase of the project.
Similarly, Washington-headquartered nonprofit organisation Forest Trends had reported that Myanmar has cleared more than 5 million acres and identified some 11 million acres of forest lands for agribusiness projects. The Kachin State, bordering China, was cleared for commercial plantations for rubber and biofuels, according to the report.
Meanwhile, Tanintharyi also suffered the same fate to give way to oil palm and rubber plantations. Forest Trends summed up Myanmar’s loss of forest lands to concessions to amount to over 1.15 million acres/year.
This is the price that the country will have to pay for the loss of its biodiversity, since a project like Dawei SEZ is ultimately intended to be Asia’s largest integrated industrial zone and a platform to catapult Myanmar into the global industrial arena, while it also races to be in the top of the rubber producers’ category.