Looking west (or north)

There’s a long and interesting article on the developmental prospects for Tavoy/Dawei in Burma in The Irrawaddy, authored by Htet Aung, that readers might like to link with our earlier post on this project here, here and here.

Tavoy today

The article is about Burma “seeking to become Asia’s next miracle economy by establishing a special economic zone (SEZ) in the southern port city of Tavoy.” That’s the  US$8 billion Thai invested project discussed in our earlier posts. The model is said to be “Shenzhen, the first SEZ created as part of Chinese paramount leader Deng Xiaoping’s sweeping economic reforms in the late 1970s.”

The project is said to go back to a memorandum of understanding signed in May 2008, Samak Sundaravej was prime minister of a pro-Thaksin Shinawatra government. However, the first real step was in November 2010, when “Burma’s ruling military regime reached a final agreement with Italian-Thai Development PCL, the Bangkok-based company that was awarded the contract to carry out the project.” The article cites Italian-Thai president Premchai Karnasuta saying that Burma’s military leader “Than Shwe said he wanted this project to be like the Shenzhen economic zone…”.

The article questions the viability of the project on several grounds, and those interested will find these arguments in the article. One of the interesting points made is that Premchai argues that “if Burma’s generals want to see a China-like economic success at home, they will have to take bold step to change the current economic management of the country…”.

Of course, Tavoy/Dawei is going to be heavily dependent on Thailand, and not just for investment. The article suggests that “the chief beneficiary of the Tavoy SEZ could end up being Thailand itself. A dual railway and highway link between Bangkok and Tavoy would increase the importance of the Thai capital in facilitating trade in the Mekong region, while plans to build an oil refinery and coal-powered electricity generating plant in Tavoy would ease environmental pressures on Thailand’s heavily industrialized Eastern Seaboard.” In addition, during the construction phase, because of Burma’s dearth of skilled labor and professionals, many of these positions will “likely be filled by Thais or other foreigners, while Burmese will do most of the unskilled work. Indeed, the abundance of cheap Burmese labor is one of the main attractions for Italian-Thai…”.

A Greenpeace photo of a Map Tha Put protest

One of the main attractions, mentioned above is that Burma may well become a base for dirty Thai industry:

The factories that Italian-Thai will build in Tavoy SEZ include a steel mill, a fertilizer factory, a 4,000 MW coal-fired power plant and a petrochemical complex, including oil and gas storage facilities, an oil refinery, a gas separation plant and a combined cycle power plant.

In Thailand, there has been significant resistance to the construction of such factories on the grounds that they are known to cause a wide variety of serious environmental and health problems. Rather than address these concerns, however, Thai companies now see the Tavoy SEZ as way of avoiding them.

“By moving to Burma, [Thai companies] can leave behind the environmental problems of Map Ta Phut and Rayong courts,” said a recent editorial in The Bangkok Post.

Even Thai Prime Minister Abhisit Vejjajiva has acknowledged this as a major consideration behind the decision to move to Tavoy. “Some industries are not suitable to be located in Thailand. This is why they decided to set up there,” he said in a recent television address.

Tavoy tomorrow?

Finally, the article raise the specter of forced relocation, a task that has always been handled poorly in Thailand and abominably in Burma. It is estimated that some 3,800 households will be relocated. In the past, the Burmese army has “helped out” on relocation. If that happens again, expect condemnation of Italian-Thai.