RJA October 2015 Country Focus

Rubber Journal Asia Country Focus

Myanmar’s “invisible” rubber tracts Myanmar is pushing for industrial

Industrialising the landscape awei (formerly Tavoy), Taninyharyi’s capital, competence amidst tensions over was an idyllic, picture postcard-scenic city that had been a vital trading artery during the agricultural and biodiversity losses, colonial times, and later on a trading gateway says Angelica Buan in this article. with Thailand via Ranong and other border towns, serving the rubber and the oil palm industries.

It traditionally has three industries: agriculture, fishing and mining, according to an article published by Bangkok-headquartered Foundation he 40th largest country in the world, for Ecological Recovery.

Myanmar is opening up to global However, Dawei’s landscape has shifted to industrialisation. It is in a good position, at an industrial hub with the set-up of the Dawei least geographically. The country is bordered by Special Economic Zone (SEZ), which has an initial India, Bangladesh, China, Laos and Thailand. investment of US$8.6 billion.

Mostly thriving on agriculture and mining, Further development of the hub would hit Myanmar has been low key in terms of rubber an infrastructural investment estimated at production, since it produces low grade over US$50 billion, according to a 2012 paper rubbers, which fetch lower price in the market. authored by Myanmarese researcher Puang Ku It has not catapulted to attention as and Netherlands-headquartered Transnational Thailand, Indonesia, Malaysia, Vietnam and Institute.

India. For this reason too, the country’s rubber The city is sited in the South easternmost part sector has not been competitive with other of Myanmar that borders Mon State to the North, ASEAN neighbours.

Thailand to the East, and further to Cambodia, A 2013 USAID Burma-commissioned report Vietnam and the rest of mainland Asia. Likewise, noted Myanmar’s low farm productivity. It it provides access to the Andaman Sea to the West, surveyed that the annual agricultural income which for Thailand, a key proponent in DSEZ, is a per worker is at US$194 (2011/2012 multiagency channel route to India and the Middle East. data). However, Myanmar’s agricultural sector,

The former with a significant recluse state has portion comprised “..Dawei’s landscape has shifted to been opened of small holder up to welcome farming, has an industrial hub with the set-up of large scale supported a third the SEZ…” investments, thus, of the country’s converting it to Gross Domestic a manufacturing facility hub and international Product (GDP) and 15% of total export earnings, container port. according to Global Witness data.

Initiated in 2008, the Dawei SEZ is a joint Based on the CIMB Asean Research project by the Italian-Thai Development (ITD) Institute’s report in 2012, Myanmar’s plantation Company, which was granted a 75-year concession industry focuses on rubber and teak sectors. to develop the area, and the Thai and Myanmar Amongst Myanmar’s regions where rubber governments. It was hatched on a total land area has been cultivated even earlier than in other of 204.51 sq km. adjacent states is the Tanintharyi Division Project development would be carried out (formerly known as Tenasserim), which has in three phases, each spanning ten years, from climate and soil quite ideal to cultivating 2010 to 2019. After much negotiations and mixed vast oil palm and rubber plantations. But it reception towards the Dawei SEZ project, the unfortunately became the leeway for land initial phase development was launched in August grabbing, deforestation and displacement, this year. according to the 2014 report of UNCHR. It will involve construction of a small port, What’s special about Tanintharyi is that it power plants, a two-lane road to Thailand, an LNG has preserved its biodiversity while providing terminal, and other initial infrastructure for labourample livelihood for its close to 1.8 million intensive industries (textile, garment, food). population.

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Rubber Journal Asia Country Focus Dawei SEZ: weighing down on local rubber As well, the Economic Zone Law enacted by farming the Myanmar Government in 2011 includes tax he massive project, while promising exemptions, land ownership, facilitation of work industrial growth for Myanmar, has permits, privilege to import foreign management reportedly cost the livelihood for the agricultural and skilled labour, to cite a few salient points. workers in the city, not to mention affected According to a project update presented its biodiversity and displaced dwellers, to say

by ITD and DDC in 2013, Myanmar will the least. According to reports, Dawei SEZ has be benefiting from the project through directly affected some 18 villages or close to local employment, increased foreign direct 4,000 households and the relocation of more than investments, tax/benefit sharing with the 23,000 individuals. Affected too are the rubber Myanmar government, development of plantations that stretch across Dawei and its resources, knowledge and technology transfer, outskirts. and growth of local businesses and industries.

Dawei thrives on small agriculture processing In addition, the consortium said that industries, including rubber processing and investments in key industries, including trading. According to the Transnational Institute, automotive, electronics, metals, plastics, chemicals, an estimated 85% of local livelihoods rely on refinery, fertilisers, pharmaceutical products and plantation agriculture. rubber, are also expected to flourish, over the Another report, Voices From the Ground: long-term period in Dawei SEZ. Concerns Over the Dawei Special Economic Zone and Related Projects produced by the Dawei Losing forestland to rubber/oil palm Development Association (DDA), estimated that plantations 36 villages comprising about 43,000 residents n a related report, a 50,000-acre land at the would be directly affected by the Dawei SEZ and Thein Baw Oo village tract, also in Dawei, is related projects; while 71% households covered to be levelled for a large-scale rubber plantation by the report anticipated losing partly or all of to be operated by Myanmar Mahar Dahna in a their land due to the project. joint venture with Thai Hua Rubber Holdings, An article published online by the Human a company that operates rubber plantations Rights Foundation of Monland (Rehmonnya) and manufactures rubber-based products in described that Thailand. at the enactment Already, 5,000 “..Affected too are the rubber of the MOU in acres have 2008, the Dawei plantations that stretch across Dawei been given the Project Watch go-ahead signal and its outskirts…”

(DPW) organisation to be developed reported on the for the first confiscation of some “8,000 acres of paddyphase of the project. cultivated lands, 10,000 acres of rubber Similarly, Washington-headquartered nonplantations, 12,000 to 14,000 acres of cashew-nut profit organisation Forest Trends had reported plantations, and over 150,000 acres of orchid that Myanmar has cleared more than 5 million plantations” by authorities from Dawei SEZ and acres and identified some 11 million acres ITD. of forest lands for agribusiness projects. The Kachin State, bordering China, was cleared for Reaping the benefits commercial plantations for rubber and biofuels, he consortium of private developers that according to the report. will be kicking off the establishment of Meanwhile, Tanintharyi also suffered infrastructure within the zone, said that the the same fate to give way to oil palm and project is expected to contribute up to 5% of rubber plantations. Forest Trends summed up Myanmar’s GDP by 2045.

Myanmar’s loss of forest lands to concessions to To encourage investors and ensure the success amount to over 1.15 million acres/year. of Dawei SEZ, perks are being dished out as This is the price that the country will have encompassed in the Framework Agreement to pay for the loss of its biodiversity, since a signed between ITD and Myanmar Port project like Dawei SEZ is ultimately intended to Authority, Ministry of Transport, in 2010 for be Asia’s largest integrated industrial zone and the development of the Dawei Deep Sea Port, a platform to catapult Myanmar into the global Industrial Estate, and Road and Rail Link to industrial arena, while it also races to be in the Thailand on a BOT basis. top of the rubber producers’ category.

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