Tanintharyi Business Investment

Connectivity with Thailand will unlock Tanintharyi’s economy, says business chief

U Ye Htut Naing is a big fish in a small pond.

The provincial mogul has chaired Tanintharyi Region’s Chamber of Commerce and Industry since 2014, and this year entered his second term at the helm of the private sector body in Myanmar’s southeastern region.

Among his many business ventures, he is the vice chairman of the Dawei Development Public Company, which he says may list on the Yangon Stock Exchange by 2020; his company, Dawei Dragon, commands 2,000 acres of rubber plantations; and Shwe Wei Company, which he has a stake in, has built shopping malls, hotels and houses in Dawei, the sleepy regional capital.

Currently, Tanintharyi represents a conundrum. Though comprising hundreds of kilometers of coastal land beside the Andaman Sea to the west, and a border with Thailand across a similar length to the east, the region remains isolated.

Its road connections to the rest of Myanmar and to Thailand are poor, making travel torturously slow, and its cities and towns are off the national electrical grid. Yet, its potential is tremendous, residing in the prime tourism assets that are the Myeik Archipelago, the boom in rubber production on its hill slopes, and a growing industrial capacity to process and add value to its fishery products prior to export.

Looming above all else is the prospect of the US$8 billion-dollar Dawei Special Economic Zone – a project whose scope is ten times larger than the existing Thilawa SEZ near Yangon, and which would include a deep-sea port and industrial zones, and entail the upgrading of a highway linking Dawei with the Thai border at Htee Kee 156 kilometers away.

First conceived in 2008, the Dawei SEZ has been dormant for several years, and there is little to see on the ground; but late last year Myanmar and Thailand signed an agreement to expedite the highway with technical assistance from a Thai government agency, and the SEZ remains on the agenda, with the Japan International Cooperation Agency now surveying the project site.

Ye Htut Naing sat down with us while on a visit to Yangon and explained that Tanintharyi’s success ultimately depended on greater connectivity with Thailand on the other side of the Kra Isthmus; and that, however slowly, things were moving in the right direction. This interview was originally in Burmese; on translation into English, it was lightly edited for clarity.

How would you describe the general business environment in Tanintharyi?

Now, it’s mainly an economy of small family businesses, instead of corporations. Since 2008, there has been a plan to build a deep-sea port [for the Dawei SEZ], but the project has been postponed for various reasons until now. The government is trying to restart it, but nothing has really happened so far.

Our beautiful beaches and islands present the best opportunities in Tanintharyi; the tourism sector offers the most promising business prospects. However, we haven’t been able to make the tourism sector work to its full potential, and there are a lot of things that we need to improve.

Regarding other sectors, there is lots of mining, including for marble, tin, coal and tungsten. We also produce a lot in the fisheries sector, but it needs more investment. Looking to agriculture, our region has the second largest spread of rubber plantations of any state and region in Myanmar.

Tourism is the fastest growing industry in Tanintharyi. There isn’t much planning, however, and there’s a lack of infrastructure. Still, while there’s been a lot of environmental destruction in other regions, Tanintharyi has preserved its nature. It also has less crime than other parts of Myanmar.

Overall, the tourism industry is struggling in Myanmar. Income has declined as big-spending Western visitors stay away. Is Tanintharyi bucking this trend?

The impact has been felt less in Tanintharyi compared to other states and regions. For one thing, visitors from elsewhere in Myanmar are drawn by a number of famous religious sites, such as the Shin Ko Shin [a series of nine Buddhist pagodas] around Dawei. Last year, we had many Myanmar visitors – a good portion of the hotels were fully booked. Arrivals are growing fast.

Also, tourism growth in Thailand will benefit our region. Dawei is less than 100 miles [160 km] from Kanchanaburi in Thailand, a popular tourist destination. Starting from October, work on upgrading the highway [to Htee Kee on the Thai-Myanmar border, which is close to Kanchanaburi] will begin, making travel between Kanchanaburi and Dawei much faster. Though the highway is intended to serve the Dawei deep-sea port, its completion will greatly help tourism in Tanintharyi.

If we look to Myeik [south of Dawei], it’s not far from Hua Hin [a popular beach destination in Thailand]. Also, Kawthaung [further south] is just across the water from Ranong in Thailand. The beaches in these Myanmar destinations could draw many visitors directly from these Thai destinations.

How could increased connectivity with Thailand help industries other than tourism in Tanintharyi?

If Thai and Myanmar cities could become more connected, the whole economy in Tanintharyi would benefit. We have many locally made products, but, with the Dawei seaport stalled since 2013, if we want to export these goods, they have to travel far, all the way north to Thilawa port [a distance of more than 600 km]. This is costly, and raises the eventual prices of the goods.

If we could instead use the ports in Thailand, such as Laem Chabang [in Chonburi Province south of the capital Bangkok], it could really benefit local businesses in Tanintharyi. The ASEAN Free Trade Area [a trade agreement within the Association of Southeast Asian Nations that entails low or minimal tariffs within the regional bloc] would increase the benefits of this.

Does free trade within ASEAN pose any risks to Tanintharyi’s economy?

Yes, there are risks. There have recently been more Thai imports. AFTA implementation has only just started for Myanmar. For a long time, we’ve had imbalanced trade, importing more than we export. This could increase in the short term. But the government should be able to manage the risks, in cooperation with private stakeholders, so that small and medium Myanmar businesses can compete.

Since we are a member of ASEAN, we have to stick to its rules, including the AFTA rules. We should prepare ourselves for increasing competition, and try our best.

Is connectivity with Thailand being strengthened in other ways?

Currently, we have the Dawei-Htee Kee highway project, but the government is also planning to upgrade Kawthaung airport into an international airport. The project should be underway by the end of this year. Then, people will be able to fly in from multiple places in Thailand. [Kawthaung is the gateway to the Myeik Archipelago.] Currently, foreigners can’t fly directly to Tanintharyi; they have to go via Yangon. This is the biggest obstacle to tourism growth. We need to change this.

Another big obstacle for the economy as a whole is poor infrastructure. We have very bad roads, and the highest electricity tariffs in the country. Because of this, our project costs are often higher than elsewhere in the country.

Photo credit: Frontier Myanmar

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on print

Are you an Investor?

Interested in learning about the investment opportunities there are in Myanmar? Reach out to us for a conversation.

Download the Invest Myanmar Summit 2019 app today to request appointments* and check out the latest Summit programme.

*Only available to registered Summit participants.