U Than Naing, Kayin State Minister for Planning, Finance and Development Affairs sees a bright future for Kayin under new ASEAN trade agreements, given its strategic position as the gateway between Myanmar and Southeast Asia.
Kayin State is one of the ten participating regions in the Invest Myanmar Summit 2019, and will be the focus of one of the Regional sessions on Day 1 of the Summit.
Q: In the past few years, Kayin State has become a travel destination. How is the tourism industry faring?
A: Tourism and tourism-related businesses in Kayin have been growing quickly since late 2012, as the state has become more stable due to peace negotiations and peace deals [between the Myanmar military and Kayin armed groups, the two largest of which signed the Nationwide Ceasefire Agreement in October 2015].Kayin borders Thailand, one of the most popular travel destinations in Southeast Asia and has been able to attract visitors across the border. Since 2016, around one million domestic and foreign tourists have visited the state. As tourism becomes one of our major industries, we are seeing heavy investment in hotels and other tourism facilities.
Both the Union and state governments are supporting and promoting community-based tourism and ecotourism in Kayin. Since 2016, bed-and-breakfast hotels have been allowed to operate in Thandaunggyi in the northern part of the state, which has been called the Pyin Oo Lwin [a picturesque hill station in Shan State that was known as Maymyo during British colonial rule] of lower Myanmar. We are now considering permitting homestays so that local communities can receive more of the benefits of tourism.
In Hpa-an, the Kayin capital, we are upgrading Strand Road, which is situated on the highway from Thailand to Myanmar. We are also developing an existing airport in Hpa-an to handle commercial domestic and international flights. With new infrastructure and investment in these areas, we believe our state will become one of the country’s major tourist attractions.
Q: Is the border town of Myawaddy also important for Kayin’s development?
A: Definitely. Myanmar’s second-largest trade zone is in Myawaddy, on the Thai border. Due to the town’s strategic location on several major international trade routes, such as the Asian Highway 1 [the longest route on the Asian Highway Network, which connects Turkey with Japan], the East-West Economic Corridor [connecting Myanmar with Cambodia, Laos, Thailand and Vietnam] and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, the volume of trade processed at Myawaddy is rising every year.
Trade processed in the Myawaddy zone was worth about $955 million in the financial year 2017-18 and $421 million in the 2018 six-month mini-budget year [the start of Myanmar’s fiscal year was changed in 2018 from April 1 to September 1]. Since last year, we have used the Myanmar Automated Cargo Clearance System to expedite the flow of trade, so the trade zone is ready for the Association of Southeast Asian Nations (ASEAN) Free Trade Area and the ASEAN Trade in Goods Agreement, which is effective from 2019.
We are also trying to develop a dry port and other logistics and transportation facilities in Myawaddy, which is the gateway between Myanmar and other ASEAN countries and can be easily connected to deep-sea ports in Yangon, Dawei [the capital of Tanintharyi Region] and Bangkok, so the potential is huge.
Q: How many factories and other businesses are operational in the Myawaddy and Hpa-an industrial zones?
A: The supporting infrastructure for an industrial zone of 969 acres, seven miles northeast of Hpa-an, is now completely finished. About 40 businesses, including a knitwear factory run by Hong Kong-based Fulltex Company, have been approved to operate in the zone, which together will create more than 2,000 local jobs.
An Indian company, Precision Auto Engineering, has started building a factory in the same zone to assemble Bajaj REs [three-wheeled motorised rickshaws] and other vehicles.
In the Myawaddy industrial zone, 10 businesses are operational, many of which have their headquarters in Thailand, and together these employ more than 400 people. There are a number of other foreign companies conducting feasibility studies for investments into both of these zones.
Q: Is Kayin State, like other states and regions, facing challenges to the provision of a steady electricity supply?
A: Only 43.4 percent of households in Kayin State have access to electricity as the state is only allocated 66 megawatts from the national grid. The installation of a 230 kilovolt-amp (kVA) powerline to Myawaddy and a 66 kVA line to Kawkareik [a town on the highway between Hpa-an and Myawaddy] will both be finished in 2019. After that, 60 percent of households in the state will get electricity access.
For now, villages in Myawaddy and Kawkareik districts purchase electricity directly from Thai companies, while householders in some other areas power themselves using solar energy, small-scale hydropower generators, and diesel generators. We are inviting investment into establishing a mini-grid using renewable energy for villages on the eastern edge of the Dawna Range, which is a long way from the national grid.
Q: There is anecdotally an illicit trade problem along the Kayin State border with Thailand. Are you working on a solution to this?
A: Kayin shares a long border with Thailand and illegal trade across this porous border has been a problem for decades. For many reasons, it will take great effort from various stakeholders on both sides to completely eradicate such activities. We are doing our best, by collaborating with the relevant departments to cut red tape, in an effort to gradually reduce the volume of illegal border trade.
Q: We understand that Kayin State has received less investment than some other states and regions. How much has been invested here?
A: Since late 2016, a total of US$28.45 million has been invested by foreign companies. On the other hand, domestic companies have invested MMK31.9 billion, through the Myanmar Investment Commission and the Kayin State Investment Committee. This has spanned a number of sectors, with a majority allocated to tourism and real estate.
Q: Has there been much investment in agriculture?
A: The numbers now are still modest, although agriculture is the major driver of the Kayin economy and some 50 percent of the population is involved in this sector. Kayin has over 550,000 acres of farmland. Paddy is the major crop, which is grown on 430,000 acres. Rubber is also a major business here: there are 280,000 acres of rubber plantations.
We desperately need investment into the agriculture sector and there are lots of investment opportunities across the agriculture supply chain. I would also encourage companies to invest in finished-product manufacturing using rubberwood.
Representatives of Kayin State will be available for meetings, discussions and focus sessions on the opportunities Kayin State has to offer. For more key facts on Kayin State, visit this page.
Photo credit: Steve Tickner | Frontier