U Set Aung, Chairman, Thilawa Special Economic Zone (SEZ): Interview

Interview: U Set Aung

Which industries do you think show the most potential growth, as far as Thilawa is concerned?

U SET AUNG: So far we have received letters of intent for 45 factories from 11 countries across the globe, with interest being expressed for many different types of manufacturing. Out of these 11 countries, the majority of companies are from Japan and from Hong Kong, in addition to some from Europe, Thailand and Singapore, as well as one company from the US.

As it stands, the majority of interest is coming from medium and light industries, such as automotives, auto-parts, electrical and electronic products, as well as from some labour-intensive industries like garment, footwear, gloves and others. At this stage it should be clear that medium and light industry has been leading the demand for factory space within the SEZ.

To what extent will the new law on SEZs bolster and stimulate further trade activity in the economy?

SET AUNG: The new SEZ law is a very significant law that ensures a level played field; it does not discriminate between foreign investors, domestic investors or state-owned enterprises. The new SEZ law also enables us to adopt leading international standards and apply them within the zone itself.

For instance, we are going to implement our own process relating to imports, exports and Customs procedures, all in line with the best international practices. These changes are significant because many developing countries like Myanmar have struggled with the development of infrastructure. The SEZ lays the groundwork for the establishment of the zone.

Another important element that developing countries have often struggled to promote is soft infrastructure, including policies and procedures related to industry, trade, labour and the environment. There is not really much streamlining or coordination among these different sectors in developing countries. Indeed, to achieve effective coordination in a short time is impossible. Vietnam, for example, has been trying to find an appropriate balance since 1986. In order to overcome these difficulties, we will treat the SEZ as a laboratory where liberalised policies and procedures that are in line with international practices – but which cannot be practised immediately across the country – will be tried out in a more manageable, contained environment. Any impacts that practices may have will be contained within the zone. This is the ground where we can test our liberalisation measures effectively.

What kind of impact do you foresee the establishment of Thilawa SEZ having on any future public-private partnerships (PPPs) in Myanmar?

SET AUNG: I am confident it will encourage further PPPs in the future. The Thilawa Project is a partnership between two countries, Myanmar and Japan, but the target market is not only these two countries. Many other countries have also expressed interest in establishing factories. As Thilawa SEZ will be the first zone to be established, we have to set a good example and pave the way for future endeavours.

For example, all procedures and processes related to import, export, Customs and labour registration, everything must be streamlined and implemented in line with international standards. That is why, in many areas, we are calling in experts from Japan and other advanced countries to help us develop higher standard processes together. Another challenge we have to face is application and enforcement. We will have many challenges ahead as we streamline the procedures that we have already developed and look for new ways to improve export, import and Customs processes. We must also consider many other factors, such as environmental concerns, labour registration and immigration as we move forward to attain international standards. We have faced many hurdles already but many more still lie ahead. Partnering with Japan will assist us in managing and finding solutions to the challenges we may confront. The success of Thilawa SEZ will thus e ncourage more PPPs across Myanmar.