As Myanmar is speeding up the implementation of special economic zones (SEZ) before the launch of the Asean Economic Community, the success of Thilawa SEZ will serve as a “gateway” to a lot of mega-projects in the country, an economist said.
Maung Aung, senior adviser to the Ministry of Commerce, told Myanmar Eleven that Thilawa SEZ plays a vital role in the country’s economy as it will set a good example for the implementation of mega-projects.
“Currently, many investors are keeping an eye on the development of Thilawa SEZ. Not only Japanese investors but also international businesses are looking closely at the zone’s development. If we can do well in Thilawa SEZ within the targeted timeframe, I am sure thousands of businesses will flock to our country,” said Maung Aung.
The adviser pointed out that all-inclusive participation is needed to make the project a success.
“I heard [that] Myanmar Thilawa SEZ Holdings Public Limited has sold out thousands of its shares to the public. As there are many new shareholders in the firm, the Board of Directors should get advice from the public and listen to other shareholders.”
Sett Aung, chairperson of the Thilawa Special Economic Zone Management Committee, said in an earlier press conference that the management team of Myanmar Thilawa SEZ Holdings might be reformed owing to the increase in the number of shareholders.
Currently, Win Aung, chairman for Union of Myanmar Federation of Chambers of Commerce (UMFCCI), and Thein Wai, chairman of First Myanmar Investment Co (FMI), are serving as the chairman and vice chairman of the Thilawa SEZ Holdings, respectively.
Criticism arises over the selection of shareholders as chairman and vice chairman, as this may lead to a conflict of interest.
The SEZ has a total area of 5787.187 acres (2342 hectares). Class A area, which is the first phase of construction work, has a land area of 978.691 acres (396.061 hectres). As it is a special economic zone, there will be residential and commercial areas besides industrial area. There will be supermarkets, residential housings, and international schools, hospitals, etc. Such buildings will be built in the residential and commercial areas.
“There will be free zone and promotion zone as you can learn it in the new Special Economic Zone law. Export-oriented industries will be in the free zone. Domestic-oriented industries, supermarkets, residential housings, recreation centres will be situated in the promotion zone. So we will form the free zone as the international bounded area,” said Sett Aung.
“In Thilawa SEZ, we will separate into two parts: free-zone industries and other industries. There may be a domestic market-oriented industry near the free zone. But they will enjoy the same opportunities as other domestic-oriented industries do. We take Model 2 of the new Special Economic Zone law.”
Sett Aung emphasised the role of the developer as it will invest, build, and maintain the whole zone. Myanmar-Japan Thilawa Development, which is a joint-venture company, will serve as a developer while Thilawa SEZ Management Committee will serve as a regulator.
“The regulator itself has become the minority shareholder in Thilawa SEZ. In the newly formed joint-venture company, SEZ Management Committee will possess 10 per cent of shares while Myanmar Thilawa SEZ Holdings possesses 41 per cent of shares. [The]Japanese consortium will hold 39 per cent while Japan International Cooperation Agency [JICA] will hold 10 per cent,” said Sett Aung, who is also the deputy governor at the Central Bank of Myanmar.
He noted that there was one condition then that the developer must be a public company. The other criteria are the company must have more than 50 shareholders and it must submit the letter of intent within two weeks from advertisement date. At the time, there were more than 20 public companies and of total, only 12 have more than 50 shareholders. Moreover, only nine of the 12 managed to submit the letter of intent on time. These companies ended up being the shareholders of Myanmar Thilawa SEZ Holdings.
But Sett Aung highlighted that the voting rights of the initiating developers will be the same as those of other shareholders and there will not be any discrimination among the shareholders.
Win Aung, the chairperson of the Myanmar Thilawa SEZ Holdings, said that the construction of factories will commence in the zone by this month. Four roads connecting the Thilawa special economic zone are already planned for construction.