Dawei’s ill-starred ‘zombie’ project

As a new road project linking Thailand’s western province of Kanchanaburi and Myanmar’s Dawei seems to rekindle hope of investors in the sluggish Dawei Special Economic Zone (DSEZ), there are increasing concerns over the project’s social and environmental impact.

The two neighbours last June finalised a US$133 million (4.4 billion baht) loan for twolane 138-kilometre road linking their respective border towns. The Ministry of Commerce in the following month announced that it was trying to speed up the construction of the DSEZ, a large industrial complex covering around 200 square kilometres, nearly the size of Hanoi.

Since it was launched with fanfare in 2008, the project has shown minimal progress. Of Myanmar’s three special economic zones, it was conceived first but is the least developed. The project has been hampered by both insufficient financial investment and strong civil society opposition. In the past four years there has been no progress on the ground.

The road project may change that scenario but a high degree of uncertainty surrounds the project. If it moves forward a number of environmental and social risks could materialise. These risks include potential land grabbing, the loss of fisheries, pollution, biodiversity damage, strain on existing water supplies, and adverse effects on human health. During the limited development that did occur during the project’s first phase, local civil society organisations reported cases of land grabbing and inadequate compensation.

For many, the fears over the DSEZ’s impact can be connected to the lessons from the Map Tha Phut industrial estate in Thailand’s eastern seaboard project, which caused irreversible harm to labourers and nearby communities. Its impact included ground water and soil contamination, heightened risk of cancer to locals, and damaged blood cells. The DSEZ development is seen as an attempt on the part of Thailand to shift unwanted industries to neighbouring land. Ex-prime minister Ahbisit Vejjajiva stated: “Some industries are not suitable to be located in Thailand. This is why they decided to set up there [in Dawei].”

Both the National League for Democracy (NLD) leadership and the Environmental Conservation Department (ECD) have admirably pledged that such abuses won’t occur on their watch, and that the project’s development will be environmentally and socially responsible. However, the ECD has admitted it doesn’t have the capacity to monitor the project’s implementation on the ground. Its local office in Dawei has few staff, insufficient equipment and inadequate financial resources.

So perhaps it would be better if the project were not built at all. Since there has been little construction to date, the opportunity cost of cancelling it is not high. While one reason to scrap the project is certainly that the government cannot adequately monitor whether safeguards are put in place, there are a number of others, too.

Proponents of the DSEZ have repeatedly given three arguments in favour of the project: job creation; a boost to the national economy; and regional integration. But an NLD adviser disagrees with the first and second arguments. Unlike China, in Myanmar there is not a large rural workforce, particularly in Dawei, which would benefit from the job opportunities offered in the DSEZ.

There is the prospect that Myanmar migrants in Thailand would return to work in Dawei, but this is far from certain, especially if the wages offered in the DSEZ are less than those offered in Thailand. The second argument is also weak because Dawei is so far from Yangon, where the majority of the country’s population lives. Further, Dawei’s infrastructure and other linkages that connect it to the rest of the country are poor. Without these, it could become an enclave and not wellintegrated into the Myanmar economy. From a cost-benefit perspective, the DSEZ is of no great benefit to Myanmar, but would largely benefit Thailand.

Constructing the DSEZ would represent a high opportunity cost because of Dawei’s potential for tourism. This opportunity would likely be lost if the DSEZ is built. In Thailand, Phuket is a successful example of a province with a thriving economy where residents have resisted construction of heavy industries and instead focused on tourism and the service industries. Considering Dawei’s potential for tourism, it might be wise to follow Phuket’s path.

Further, a number of locals in Tanintharyi Region oppose the DSEZ. They believe the region already has a strong local economy — one of the nation’s richest regions — and is endowed with abundant natural resources. “I think the investment will only benefit the investors. There’s no benefit for the local community,” sad Pin Nyar Wantha, the head monk of the village and community leader.

An NLD adviser stated: “Dawei is like a zombie — it keeps on coming back!” Considering the project’s low level of benefits to communities, the region, and the country, and the potential for environmental and social risks, perhaps it is time to finally put this zombie to rest for good.

I think the investment will only benefit the investors. There’s no benefit for the local community.