In­dus­trial sec­tor needs more at­ten­tion

The Myanmar Times - - Front Page - TIN YADANAR TUN tinyada­nar­tun@mm­times.com

Ex­perts within Myan­mar’s in­dus­trial sec­tors say there needs to be a more de­tailed pol­icy out­lin­ing in­dus­trial de­vel­op­ment, in­clud­ing a path­way for solv­ing the woes of eco­nomic zones.

POOR in­fra­struc­ture, low-quality or un­re­li­able elec­tric­ity sup­ply, wa­ter short­ages, in­ad­e­quate trans­porta­tion links, and on­go­ing dis­agree­ments with lo­cal res­i­dents af­fected by zone de­vel­op­ment are among the most se­ri­ous prob­lems de­vel­op­ing the coun­try’s in­dus­trial sec­tor, ex­perts say.

But per­haps the big­gest prob­lem, they say, is the lack so far of any over­ar­ch­ing gov­ern­ment in­dus­trial de­vel­op­ment pol­icy.

Parliament should pass laws to pro­mote in­dus­try and the SME sec­tor, says U Myint Zaw, vice pres­i­dent of Myan­mar In­dus­trial As­so­ci­a­tion.

“We’ve had in­dus­trial zones for more than 30 years, but no in­dus­trial zone de­vel­op­ment law,” he told The Myan­mar Times. “To de­velop in­dus­trial zones around the coun­try, we need to en­act spe­cific leg­is­la­tion.”

De­spite the des­ig­na­tion by gov­ern­ments from time to time of in­dus­trial zones, Myan­mar still lags be­hind its ASEAN neigh­bours, he said.

“The cur­rent gov­ern­ment said that when they took of­fice they would de­velop the in­dus­trial sec­tor. The last gov­ern­ment said the same thing,” U Myint Zaw said. “But we’ve seen no ac­tion. It’s not just a ques­tion of des­ig­nat­ing a piece of land as an in­dus­trial zone. We need leg­is­la­tion.”

In­dus­trial de­vel­op­ers around the coun­try say they face the same chal­lenges: high land prices, elec­tric­ity sup­ply and loan fi­nanc­ing.

Hlaing Thar­yar in­dus­trial zone pa­tron U Myat Thin said the zone was be­ing up­graded as a spe­cial pi­lot project funded by res­i­dent com­pa­nies. The first step would be to ad­dress the is­sue of af­fected peo­ple, he said, which was de­lay­ing the project.

U Tin Oo, who owns a fac­tory in the zone, said in­vest­ment into the in­dus­trial es­tate was mov­ing too slowly.

“Some zones around the coun­try have more empty space than in­dus­try,” he said.

The quality of power sup­ply was prov­ing a huge hin­drance, he added.

“We have elec­tric­ity, but it is un­sta­ble and low-quality,” he said. “Prod­ucts are dam­aged by volt­age fluc­tu­a­tions.”

U Ko Lay, an in­vestor at South Dagon In­dus­trial Zone, said things were in a poor state at his zone.

“The in­fra­struc­ture has started to de­cay,” he said. “Ac­ci­dents have oc­curred in our zone be­cause of faulty wiring.”

More than 70 per­cent of Yan­gon’s Myaung Da­gar zone, which oc­cu­pies 682 acres (273 hectares), is de­voted to stor­age space or is just empty, said U Min Thu, a man­u­fac­turer at Myaung Da­gar.

And U Thiha Min, owner of a fac­tory in Man­dalay, said many of the zones there were oc­cu­pied by whole­sale out­lets for elec­tron­ics, ve­hi­cle ac­ces­sories and cloth­ing in­stead of fac­to­ries.

In Kayin State, Myawaddy In­dus­trial Zone is home to only three work­ing fac­to­ries, said its head, U Ye Htun Oo. The zone was es­tab­lished on 201 acres (80ha) in 2013, and 80pc of the land has been sold to lo­cal and for­eign in­vestors.

Taun­goo zone, Bago Re­gion, has made no progress in de­vel­op­ing be­cause of a lack of in­fra­struc­ture.

Across the board, there needs to be a co­or­di­nated pol­icy that looks at the plan­ning of zones col­lec­tively, ex­perts say.

“The gov­ern­ment should im­ple­ment new in­dus­trial zones in vil­lages, out­side Yan­gon and Man­dalay,” said the in­dus­trial as­so­ci­a­tion’s U Myint Zaw. “They should set them up in low­den­sity population ar­eas like Tanintharyi Re­gion. That will bring down the Yan­gon prices,” he said, re­fer­ring to a grow­ing prob­lem of land spec­u­la­tion close to the cap­i­tal.

The new zones, like their coun­ter­parts in other ASEAN coun­tries, should ben­e­fit from sta­ble and suf­fi­cient power and wa­ter, trans­porta­tion, waste dis­posal, and mea­sures to counter air pol­lu­tion and pro­tect the en­vi­ron­ment, he said.

The in­au­gu­ra­tion of the ASEAN Eco­nomic Com­mu­nity in­creases pres­sure on lo­cal man­u­fac­tur­ing in­vestors and SME start-ups, as com­pe­ti­tion in a re­duced-tar­iff mar­ket is ex­pected to in­ten­sify. Myan­mar in­dus­tries will have to work harder to re­tain their do­mes­tic mar­kets while seek­ing to pen­e­trate for­eign mar­kets, said U Myint Zaw.

The gov­ern­ment needs a clear in­dus­trial pol­icy that spe­cialises in spe­cific sec­tors, he said.

“Our in­dus­trial sec­tor should fo­cus on a sin­gle sec­tor like agri­cul­tural prod­ucts, ac­ces­sories or cloth­ing,” said U Myint Zaw. “There’s no fo­cus at the mo­ment.”

Agri­cul­ture is sim­ply not enough to sus­tain fu­ture growth - more fo­cus on in­dus­try is needed for job cre­ation, he said.

“We need to de­velop a com­mit­tee for each sec­tor, in­clud­ing in­dus­trial zones, ed­u­ca­tion and other busi­ness sec­tors,” he said. “These com­mit­tees would com­prise in­dus­tri­al­ists and ex­perts rather than gov­ern­ment of­fi­cials.”

For its part, the gov­ern­ment has an­nounced a push to­ward a more man­u­fac­tur­ing-in­ten­sive econ­omy. It is aim­ing to en­cour­age more for­eign and lo­cal in­vest­ment into the sec­tor with the pass­ing of a new in­vest­ment law and a raft of red-tape cut­ting ini­tia­tives that it hopes will make it eas­ier to do busi­ness in Myan­mar.

The Myan­mar In­vest­ment Com­mis­sion has an­nounced that it will try to at­tract lo­cal and in­ter­na­tional de­vel­op­ers by es­tab­lish­ing new in­dus­trial zones, as well as by up­grad­ing ex­ist­ing zones.

“MIC will in­vite new lo­cal and in­ter­na­tional de­vel­op­ers to de­velop new in­dus­trial zones and to up­grade the old zones to pro­mote in­dus­tri­al­i­sa­tion and cre­ate job op­por­tu­ni­ties,” MIC sec­re­tary U Aung Naing Oo said.

Photo: Aung Myin Ye Zaw

A worker rides a mo­tor­bike through the Dawei spe­cial eco­nomic zone con­struc­tion site.

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