U Thurane Aung, Vice-President, Myanmar Japan Thilawa Development: Interview

Interview: U Thurane Aung

To what extent is the Thilawa SEZ helping to advance the industrial base?

THURANE AUNG: Thilawa SEZ is like a fast-track gateway for foreign direct investment (FDI). Within the Thilawa SEZ, there is a framework set up through a real one-stop service centre, which cuts all the red tape in order to fast-track each and every approval and formality needed, from investment approvals, tax exemption, construction permits and utilities connections to import and export procedures, Customs clearance, tax returns, labour registration and visa applications. All these processes are handled by efficient front-office staff with high service quality. This helps prevent potential corruption from occurring.

The SEZ is like an incubator for new regulations and practices, and lots of new rules and directives are tried and tested there, such as licence-free import and export procedures, and the evaluation of investment proposals, using both qualitative and quantitative evaluation methods, which provide transparency in accessing FDI. New economic activities are also allowed, and opportunities are being created for foreign investment, such as the right to do trading, wholesaling and retailing.

In terms of investor appetite, what specific manufacturing segments are the most attractive?

THURANE AUNG: We are seeing a good balance between both export-oriented industries and import substitution industries. This is because Myanmar is competitive in terms of labour for export-oriented industries. It also has a significant population compared to other countries in the region and relies on imports for many materials, which makes it feasible for industries to actually produce here. In the export-oriented industries, we have manufacturers in auto parts, electronics, garments, raw materials for food, tripods, wheelchairs and toys. In the import-substitution industries, we have automobile assembling, steel and concrete building materials, food, plastic injection mouldings, aluminium cans, agricultural machinery, cartons and boxes, pharmaceuticals and engine oil. There are also a number of logistics companies within the zone catering to warehousing needs, especially for bonded operations.

What measures have been taken to entice investors to set up operations in the SEZ?

THURANE AUNG: The Thilawa SEZ is benchmarked against other SEZs in the region rather than the local industrial zones. In the time of the ASEAN Economic Community, manufacturers can set up anywhere in ASEAN and can enjoy the same trade agreements between different countries. Therefore, first we have to make sure the infrastructure of our SEZ is as good or better than other SEZs and industrial zones elsewhere in the region. Our pricing structure is also benchmarked against them. Second is of course the creation of soft infrastructure to create an environment that creates an ease of doing business. Our Government understood this need and has committed to establishing such a working environment.

What synergies have been created among industrial and light manufacturing, and logistics? How do these aid the export of value-added products?

THURANE AUNG: We have attracted a variety of manufacturers, which can all supply each other in some way. For all the garment factories, pharmaceutical companies and food companies, there is a carton and box plant within the same zone. For the car assembler, there is a factory from which they can source some car parts. Food and drink firms can buy their packing materials from the aluminium and plastic injection moulding companies. We also have a mechanism in place to allow the free flow of goods between the zone and the domestic tariff area to have synergies within their supply chain management.