SAC Vice Chairman Deputy Prime Minister Vice-Senior General Soe Win addresses Myanmar Special Economic Zone Central Committee meeting 1/2023
Nay Pyi Taw October 12
The Myanmar Special Economic Zone Central Committee held the meeting 1/2023 at the Ministry of Commerce here this afternoon addressed by Chairman of the committee Vice Chairman of State Administration Council Deputy Prime Minister Vice-Senior General Soe Win.
Also present were members of the committee, union ministers and deputy ministers, management committee chairs of Thilawa, Kyaukphyu and Dawei SEZs, directors general and officials. Chief ministers of Yangon Region, Taninthayi Region and Rakhine State attended the meeting through video conferencing.
The Vice-Senior General said SEZs are set up in global countries including Myanmar as they attract investments, generate job opportunities, increase exports, serve as a link to widen the economic scope, support the global value chain, and ensure economic progress and success effectively by producing a large variety of goods through industrial development.
SEZs are offering fiscal incentive, regulatory incentive, and infrastructure incentive.
Statistics in 2022 indicate that 145 countries have about 7,000 SEZs, generating over 100 million job opportunities. They can also develop industrial policies and attract international investment more, apart from creating job opportunities.
SEZs of developing countries are prioritizing the trade facilitation process which is the base for turning MSMEs into modern and innovative industries.
SEZs are also being turned into integrated zones that house service industries in addition to production industries.
SEZs must be supportive of the encouragement given by the SAC to develop MSMEs. A comprehensive SEZ Law could be enacted in 2014 through amendments, and its rules were enacted in 2015.
The country now has three SEZs. It launched Thilawa SEZ in 2013, and is implementing Kyaukphyu and Dawei SEZs according to year-wise plans.
Normally, the national interest must be prioritized in economic undertakings, but due to economic connections, friendship and common interest should also be taken into account seriously.
Thilawa SEZ is successfully conducting business and is standing as a renowned zone in the region. The relevant ministries should strive to maintain the foreign investment opportunities and to facilitate the existing businesses with the goal of attracting new companies and investors through coordination. Thilawa SEZ is located on 667.275 hectares formed with Zone A and Zone B where Free Zone and Promotion Zone are formed to manage export process and import-substitute manufacturing process. There are 114 companies in the zone with foreign investments of 21 countries. Its investment amounts to US$-2,190.79 million.
The zone occupies 3.6 percent of GDP in 2022-2023 financial year, one percent of the nation wise export volume in 2022 and three percent of export valume of the private sector.
In reviewing the work accomplishment of the zone in 2023-2024 financial year, the zone managed export value worth US$-54.945 million and import value worth US$-162.653 million, totaling 217.598 million from April to July. During the period, the State earned Ks-22 billion of various revenues. As it was a four month period, it is necessary to continue striving for earning a greater amount of revenues and trade this financial year.
Moreover, three companies in the free zone and one company in the promotion zone in Thilawa SEZ could not launch production of sport equipment, vehicles, wires, circuit chips, plastic machine parts, foodstuff and Soft drinks due to various reasons but they now are in operation thanks to efforts of the management committee. As such, the supervisory committee needs to provide necessary fulfilment to the factories to timely complete the process and launch the export process via manufacturing.
With regard to the significant event of the zone, employees from an invested company in the zone abused licenses of other company for seeking the import of illegal goods. So, illegal import of goods worth more than US$-2 million were exposed and seized.
As such, it is necessary to emphasize further necessary supervision not to cause similar cases again. The management must be made under the work procedures that after mother companies had paid back the loans of the companies in SEZs, the list of these companies must be removed from the foreign loan borrower list. In addition, it is necessary to make arrangements for foreign investments of new companies to invest US dollar and any foreign currencies approved by the Myanmar Foreign Trade Bank and the Central Bank of Myanmar. As the CBM is negotiating the legal currency exchange and use with partner countries, the management committees need to inform the newly-contacted relevant companies about currency affairs.
Among three economic objectives of the State Administration Council, stabilzing the market economic system and inviting the foreign investments to develop the economy of the entire people is the most important.
In order to accomplish the objective, relevant ministries are to give good service internationally to companies in the zones in order to practically implement the SOPs. if so, further foreign investments can be invited, and an emphasis can be placed on economic development. As the chairmen and members have been reformed at the management committees to properly lead the SEZs, the relevant management committees have to supervise giving better services with systematic formation of one-stop service centers in SEZs in order to gain greater progress and increase the export volume. Moreover, the companies in the zones must be managed to have convenience in manufacturing.
In operating the businesses, necessary raw materials must be imported while quality raw materials from MSME businesses at home must be used as much as possible.
As developed countries are using the multimodal transport services on a wider scale.
Myanmar needs to make preparations so as to use apply the multimodal transport services in connection with the special economic zones.
Moreover, arrangements are being made to implement the Kyaukpyu-Mandalay-Muse railway project to contribute to Kyaukpyu SEZ project, and upon completion, it will help improve better commodity flow between Myanmar and China.
A framework agreement of the deep-sea port project regarding the Kyaukphyu Special Economic Zone was signed on November 8, 2018.
The Shareholders’ Agreement was signed in January 2020 and the Concession Agreement in November 2020. There are some points that can be contradicted by the two sides regarding previous treaties signed between the two countries, and the Head of State has already authorized a discussion to be held for negotiations.
It is therefore necessary to ensure positive discussions between the two sides under the leadership of the chairman of the central work committee in order to achieve a win-win situation.
Once discussions are held, the conditions precedent must be completed in advance so that the deep-sea project of the Kyaukphyu Special Economic Zone can begin as soon as possible. Therefore, the relevant ministries, the government of Rakhine State, and the Kyaukphyu Management Committee need to cooperate to complete the preparatory measures within the specified period.
In the Kyaukphyu Special Economic Zone, the deep-sea port project is important and can benefit the locals and the State, so it is necessary to achieve success. By implementing the project successfully, Myanmar will be able to engage in the Myanmar-China Economic Corridor Cooperation Project, thereby strengthening the cooperation between the two countries.
The Head of State has also given guidelines to successfully implement the projects in a short time. Therefore, I would like to inform you that the necessary discussions will continue so that they can be completed in a short period of time and the project can start.
Similarly, despite the project starting in 2008, the Italian-Thailand company has halted the operation for various reasons, and the work has already been suspended.
As systematic measures will be taken for transfer and acceptance and invitation of another investor in line with the international procedures, members of the Myanmar Special Economic Zone Central Committee and the Working Committee are to work together to obtain new foreign investments.
The Special Economic Zone Management Committees need to notify the Central Work Committee of their tasks for approval to continue to carry out the work. Moreover, great care is necessary with expenses.
More special economic zones will contribute to the national economic development, as well as employment opportunities and living standards for local people. Therefore, the respective management committees are to make more efforts in doing their work in accordance with laws and procedures to improve the special economic zones.
Joint Secretary of the Myanmar Special Economic Zone Central Committee Deputy Minister for Commerce U Min Min explained the implementation of the resolutions of the meeting (1/2022).
Then, Central Committee Secretary (1) Union Minister U Aung Naing Oo explained matters related to the country’s special economic zones.
After that, the chairmen of the management committees of the Thilawa and Kyaukphyu Special Economic Zones read out the messages to the meeting of the central committee and sought approval.
Union Ministers General Mya Tun Oo, U Win Shein, U Aung Naing Oo, U Ko Ko Hlaing, Dr Kan Zaw, Dr Thidar Oo, U Min Naung, U Khin Maung Yi, Dr Charli Than, U Myint Kyaing, U Myint Naung, U Tun Ohn and U Myo Thant, the chief ministers of the regions and states, Deputy Minister for Energy U Thant Sin, zone chairmen gave their suggestions and reported on their respective sectors.
Then, the central committee secretary read the draft resolution of the meeting (1/2023) and sought approval.
Later, the Vice-Senior General coordinated necessities and made a concluding remark.