|Population||53,582,855 in 2017 census|
|GDP Growth Rate Projections||1.8% in 2020; usually annual growth hovers around 6% annually|
|Inequality (Gini Coefficient)||30.7 in 2017|
|Human Development Index (HDI)||0.584|
|Income Status||Lower Middle Income|
|World Bank Ease of Doing Business Ranking||137 out of 190|
|World Bank Ease of Doing Business Ranking||165 out of 190|
|Key export||Natural gas, clothing, copper and other metals, precious and semi-precious stones, wood products, and agricultural products|
Infrastructure Gap in Myanmar
A 2016 study by the Asian Development Bank indicates that Southeast Asia needs approximately $2.7 trillion invested in energy, transportation, telecommunications, and water infrastructure by 2030.63Asian Development Bank, Meeting Asia’s Infrastructure Needs, Asian Development Bank, 2017, pages xiv and 43. This calculates to approximately 6% of the region’s annual GDP, with actual needs higher in less developed countries. Energy and transportation account for more than 86% of the total projected needs, rising to 88% if climate considerations are taken into account.64ADB, page 45. In Myanmar, the annual national budget and private infrastructure investment combined only account for approximately 2.5% of national GDP, leaving a significant gap.65ADB, page 29.
After almost three decades of economic sanctions which prevented Myanmar’s access to international markets and to economic assistance, the country now has substantial infrastructure deficits which the government cannot finance alone.66OECD, “OECD Investment Policy Reviews: Myanmar”, OECD, retrieved on 5 August 2020, https://www.oecd.org/daf/inv/investment-policy/Myanmar-IPR-2014.pdf The international community plays an important role in filling this gap. In 2018, official development assistance—mostly in the form of concessional loans—accounted for 7.2 percent of total investment in Myanmar’s infrastructure and other fixed assets.67World Bank, “Net ODA received (% of gross capital formation) – Myanmar”, World Bank, retrieved on 5 August 2020, https://data.worldbank.org/indicator/DT.ODA.ODAT.GI.ZS?locations=MM The total Official Development Finance (ODF) commitment for infrastructure in Myanmar reached $1.437 billion in 2018, and the majority of this was dedicated to the transport (41%) and energy (36%) sectors.68OECD, “ODF for infrastructure at a glance by recipient”, Tableau Public, retrieved on 5 August 2020, https://public.tableau.com/views/Infrastructure_6/byrecipient?%3Aembed=y&%3Adisplay_count=yes&publish=yes&%3Atoolbar=no%3F&%3AshowVizHome=no#1
There are a wealth of countries and international financial institutions helping to address Myanmar’s infrastructure gap. Some of this comes in the form of aid, and 2018 OECD figures indicate that Japan is by far the largest donor, followed by the World Bank, the Asian Development Bank, Germany, United States, and South Korea.69OECD, ODF for infrastructure at a glance by recipient. Looking beyond aid, Myanmar’s economy is expected to recover from the coronavirus in 2020/2021 in part due to infrastructure investment.70World Bank, “Myanmar Economic Monitor, June 220”, World Bank, retrieved on 6 August 2020, http://documents1.worldbank.org/curated/en/806001593183687694/pdf/Myanmar-Economic-Monitor-Myanmar-in-the-Time-of-COVID-19.pdf Although not all foreign direct investment is for infrastructure, a significant portion does. China has long played a driving role in Myanmar’s economy. In 2019 China was overtaken by Singapore,71Htoo Thant, “Singapore surpasses China as Myanmar’s biggest investor,” Myanmar Times, May 13, 2019, accessed October 9, 2020, at https://www.mmtimes.com/news/singapore-surpasses-china-myanmars-biggest-investor.html. but in 2020, China—including Hong Kong—regained its top position again.72World Bank, Myanmar Economic Monitor June 2020, page 36.
Despite the overall poor provision of infrastructure from an objective standpoint, relative improvements over the past decade have been drastic. This has been reflected in international rankings: Myanmar rose twelve spots in the World Bank’s ease of doing business rankings from a low of 177th in 2014 to reach 165th out of 190 in 2019,.73Trading Economics, Ease of Doing Business in Myanmar, accessed November 19, 2020, at https://tradingeconomics.com/myanmar/ease-of-doing-business. The country’s World Bank Logistic Performance ranking rose ten spots from 147th in 2007 to 137th in 2019, though internal conflicts have caused a drop from the 2016 high of 113th.74The World Bank, International LPI, accessed November 19, 2020, available at https://lpi.worldbank.org/international/global/2018.
It is highly likely that this national focus on infrastructure will continue to persist. According to a pre-election survey conducted by the People’s Alliance for Credible Elections, the number one issue for voters was “provision of government services”, which is understood to include infrastructure services.75People’s Alliance for Credible Elections, Pre-Election Survey: 2020 General Elections, October 2020, page 26-27, https://www.pacemyanmar.org/pre-election-2020/. As memory of the democratic transition continues to recede and Aung San Suu Kyi’s post-election legitimacy hinges on the new NLD administration’s performance, it is likely that these issues will feature prominently in the upcoming administration’s agenda.
Energy Sector Overview
Myanmar’s electricity demand is rapidly rising: national demand has grown by 13% annually since the early 2010s and has in recent years hit 15-16%.76Myanmar National Energy Management Committee, Myanmar Energy Master Plan, December 2015, page 129, https://www.burmalibrary.org/docs22/2015-12-Myanmar_Energy_Master_Plan.pdf; Thompson Chau, “Myanmar rushes power plant projects to avoid more blackouts,” Nikkei Asian Review, October 28, 2019, at https://asia.nikkei.com/Economy/Myanmar-rushes-power-plant-projects-to-avoid-more-blackouts. Brownouts and blackouts are a recurring challenge for the country due to the increasing mismatch between the existing power supply and quick growth of electricity demand. This high demand annual growth is driven by a mix of rapid urbanization, industrialization, and increasing electrification. Myanmar’s electrification rate only hit 50% in late 2019,77Republic of the Union of Myanmar President Office, “President U Win Myint celebrates 50% nationwide electrification in Nay Pyi Taw,” December 14, 2019, accessed September 21, 2020, at https://www.president-office.gov.mm/en/?q=briefing-room/news/2019/12/14/id-9775. significantly lagging most other countries in Southeast Asia. Electricity access in Myanmar is sharply divided between urban populations—where electricity access rates are above 90%–and rural areas, where access has hovered around one third for years.78The World Bank Data, Myanmar, Access to electricity (% of population); Access to electricity, rural (% of population); and Access to electricity, urban (% of population). The national government has made a commitment to achieving universal electrification by 2030 and is taking a two-pronged approach of both expanding the national transmission grid and provision of off-grid electricity access to remote rural communities.
The 2015 Myanmar Energy Master Plan projected that rapidly rising electricity demand would requires expanding installed capacity from 4,300 MW in 2015 to more than 16,000 MW by 2030.79ADB, page 12, https://www.adb.org/sites/default/files/institutional-document/218286/mya-energy-sector-assessment.pdf This is a massive buildout of power generation infrastructure and will result in a significant shift in the country’s overall power mix.
As of 2020, Myanmar’s total installed capacity was 6,179 MW. Myanmar’s current energy mix is dominated by hydropower (56%) and natural gas (40%), with the remainder coming from one small grid-connected coal plant, one grid-connected solar plant, and one waste plant. Myanmar is expected in the short-term to diversify away from reliance on hydropower: in previous years hydropower had provided up to 70% of the total power mix, but this has dropped in the last five years as 700 MW of new natural gas plants came online.
In general, new grid-scale power generation development has been slow to materialize, with only seven projects coming online since 2017 despite the rapid electricity demand growth. These included five gas plants (with installed capacity of almost 705 MW), one solar plant (50 MW), and one small-scale hydropower plant. The projects that have come online in the last three years reflect a shift away from hydropower and towards natural gas, due in part to the controversies which surround hydropower projects and the ability of natural gas plants to come online in a relatively short timeframe. Tenders for new projects in 2019 were criticized due to short turnaround times and unattractive terms for investors, and policymakers are exploring options to import electricity from neighboring China and Laos to help make up short-to-medium term gaps in the next few years.
Myanmar’s future plans are somewhat uncertain. The 2015 Myanmar Energy Master Plan’s preferred scenario envisions an energy generation mix of 57% hydropower, 30% coal, 8% natural gas and 5% solar and wind by 2030.80International Energy Agency (IEA), “Myanmar Energy Master Plan”, IEA, retrieved on 6 August 2020, https://www.iea.org/policies/6288-myanmar-energy-master-plan There have been indications after the National League for Democracy took over administration of the government that these targets are likely to shift, but there has been no public confirmation of new plans or official updates to the Myanmar Energy Master Plan. The 2018 Myanmar Sustainable Development Plan laid out commitments to ambitiously develop renewable energy, but has not attached specific target amounts.81Ministry of Planning and Finance, Myanmar Sustainable Development Plan (2018 – 2030), Government of the Republic of the Union of Myanmar, August 2018, page 56. This lack of confirmed plans leaves the future open to some level of uncertainty.
Myanmar’s technical hydropower potential is massive, and the Mekong Infrastructure Tracker currently records more than 42,000 MW of new proposed hydropower projects. 3,000 MW of additional natural gas projects are in the pipeline. There are also several thousand MW of commercial-scale solar PV potential (Asian Development Bank estimates start around 40 TWh/year),82Intelligent Energy Systems and Myanmar International Consultants. Myanmar Energy Master Plan 2015. Page VI.http://www.burmalibrary.org/docs22/2015-12-Myanmar_Energy_Master_Plan.pdf, page 146-148. and a modeling exercise found that solar could provide nearly 27,000 MW.83World Wildlife Fund, Intelligent Energy Systems, and Mekong Economics Ltd., Alternative vision for Myanmar’s power sector: towards full renewable electricity by 2050, WWF, 2016, page 98. As of mid-2020 the Tracker identifies 1,440 MW of solar projects and 4,325 MW of wind projects in some phase of development. While investment interest is rising in alternative renewable technologies, the tender options have been critiqued. A 2020 tender for 1,000 MW of solar projects was critiqued as flawed given that bidders had a short timeframe to submit proposals, there were a number of non-standard clauses which made traditional project financing non-viable, and the process took place amid travel bans which prohibited some foreign companies from participating.84Kyaw Ye Lynn and Thomas Kean, “The scramble for solar: Inside 2020’s most controversial tender,” Frontier Myanmar, September 22, 2020, accessed October 9, 2020, at https://www.frontiermyanmar.net/en/the-scramble-for-solar-inside-2020s-most-controversial-tender/; Thompson Chau, “Myanmar solar tender conditions knock out foreign bidders,” The Myanmar Times, June 17, 2020, accessed October 9, 2020, at https://www.mmtimes.com/news/myanmar-solar-tender-conditions-knock-out-foreign-bidders.html.
|Project Name||Myitsone Dam|
|Country of Sponsor/Developer||China|
|Sponsor/Developer Company||Power Construction Corp (China)|
|Country of Construction/EPC||China|
|Country list of Construction/EPC Participant||Power Construction Corp (China)|
|Tributary||Irrwaddy Mainstem and Delta|
The Myitsone Dam is the most high-profile power generation project in Myanmar, primarily because its suspension was linked to the political transition that took place in 2011. If built, the Myitsone Dam would be among the largest dams in Southeast Asia with 6,000 MW of installed capacity—many times the size of the largest dams in Cambodia, Laos, Thailand, or Vietnam. The Myitsone Dam was originally a intended for export of electricity to neighboring Yunnan, which was criticized by many non-government given that Myanmar’s electricity access and power generation is limited domestically. The project attracted criticism for many reasons: the dam would have flooded a significant amount of land and required relocation of thousands of people; the project is located on the Irrawaddy River, which has special national significance as the mother river of Myanmar and particular significance to local Kachin as a sacred site; the site is near major fault lines; and the project was linked to resurgence of conflict with the Kachin Independence Organization.
The Myitsone Dam was unexpectedly suspended in 2011 after significant public push back and protests.85Thomas Fuller, “Myanmar backs down, suspending dam project,” New York Times, September 30, 2011, accessed October 13, 2020, at https://www.nytimes.com/2011/10/01/world/asia/myanmar-suspends-construction-of-controversial-dam.html. The decision was politically important because it is widely viewed as the first major decision to take public opinion into account and an important sign that the government’s intent to move from military rule towards democratic rule. The Chinese companies involved in the project and the Chinese government have lobbied on multiple occasions to restart the project, but as of September 2020 the project is still suspended and political opposition to the project from locals and environmental organizations continues.
Myanmar has about 250 transmission lines which extend over 10,057 kilometers and approximately two-thirds are low-voltage 66 kV systems.86Nam, Cham, and Halili. The remaining higher voltage transmission systems largely consist of 230 kV and 132 kV transmission lines connecting the two major load centers in the central north and area around Yangon.87Ricardo Energy & Environment, “Greater Mekong Subregion Power Market Development”, Ricardo Energy & Environment, retrieved on 29 July 2020. http://documents.worldbank.org/curated/en/541551554971088114/pdf/Greater-Mekong-Subregion-Power-Market-Development-All-Business-Cases-including-the-Integrated-GMS-Case.pdf Given the rapidly rising electricity demand and need to improve grid reliability, policymakers in Myanmar plan to expand and upgrade this backbone transmission infrastructure to 500 kV transmission lines.88Nam, Cham, and Halili. The government also plans to construct additional 230 kV, 132 kV, and 66 kV transmission lines to improve reliability of the grid and expand electricity access.89Nam, Cham, and Halili.
There is an interest in improving regional connectivity through cross-border transmission lines. Since 2008, Myanmar has been exporting power from Shweli-1 and Dapein-1 hydropower plants to Yunnan province in the PRC via 220 kV and 500 kV transmission lines.90Ricardo Energy & Environment. Policymakers in Thailand are exploring opportunities to build transmission lines near Mae Sot and sell electricity to Myanmar.91Yuthana Praiwan, “Egat talks power trade with Cambodia, Myanmar,” The Bangkok Post, November 5, 2019, at https://www.bangkokpost.com/business/1787454/egat-talks-power-trade-with-cambodia-myanmar. Laos currently sells small amounts of electricity to border areas near the Golden Triangle and expects to increase this through the mid-2020s.92Xinhua, “Lao electricity exports increase 145 percent in 2016 – 2020 period, “Xinhua, February 5, 2020, at http://www.xinhuanet.com/english/2020-02/05/c_138757433.htm.
Transmission buildout in Myanmar is largely aimed at supporting national electrification plans, as earlier studies have indicated that 92% of the population lives within 25 km of existing or planned transmission lines.93Castalia Strategic Advisors, Myanmar National Electrification Program Roadmap and Investment Prospectus, September 2014, page 5, at https://www.seforall.org/sites/default/files/Myanmar_IP_EN_Released.pdf. However, expanding the national grid to these communities will be expensive and the rapid drop in price of off-grid electricity technologies like household solar installations or mini-grids means has attracted significant interest in off-grid electricity. A 2019 study indicated that decentralized mini-grid energy solutions would provide electricity more quickly and at a 40% lower cost than grid expansion.94Smart Power Myanmar, Decentralised Energy Market Assessment in Myanmar, May 2019, page xvii, https://www.rockefellerfoundation.org/wp-content/uploads/Decentralised-Energy-Market-Assessment-in-Myanmar-Research-Report.pdf.
The Logistics Performance Index—which ranks countries based on perceptions of efficiency with border clearance and customs, quality of transport infrastructure, and a range of considerations related to shipping—ranks Myanmar 137 out of 160, significantly behind all other ASEAN countries as well as neighboring India and China.96World Bank, “Logistics Performance Index Global Rankings 2018,” This is in part due to insufficient financial support for transportation infrastructure. Myanmar’s total current investment in the transport sector is estimated between 1% to 1.5% of GDP,97World Bank Group, “Myanmar Economic Transition Amid Conflict: A Systemic Country Diagnostic”, World Bank Group, retrieved on 6 August 2020, http://documents1.worldbank.org/curated/en/507421574785059413/pdf/Myanmar-Economic-Transition-amid-Conflict.pdf but estimates indicate that spending needs to reach 3 -4% of GDP to meet basic transport needs and lower transportation costs.98World Bank Group, Myanmar Economic Transition Amid Conflict: A Systemic Country Diagnostic. Decades of isolation from the international community due to sanctions as well as civil conflict domestically have limited Myanmar’s physical connectivity and financing capacity.
Myanmar’s roads network has expanded significantly over the last decade and a half, rising from 90,713 km in 2004 to 157,000 km in 2015. The Mekong Infrastructure Tracker includes project-level data on 16,307 km of national roads and 2,184 km of national road upgrades. Road transport dominates long-distance travel in Myanmar, but 60 percent of the main road network are in poor or bad condition. Recent years have seen significant improvements—only approximately 20% of the roads were paved in 2015, and the ADB estimates this has risen to 40% as of 2019.99Asian Development Bank (ADB), “Myanmar Transport Sector Policy Note: Summary for Decision Makers”, ADB, retrieved on 11 August 2020, https://www.adb.org/sites/default/files/publication/184794/mya-transport-policy-note-es.pdf; Asian Development Bank (ADB), “Myanmar: Progress and Remaining Challenges”, ADB, retrieved on 11 August 2020, https://www.adb.org/sites/default/files/page/536801/mya-progress-challenges-info-paper.pdf. However, approximately 40% of the population lacks basic access to all-season roads, mostly in rural areas.100Asian Development Bank (ADB), “Myanmar Transport Sector Policy Note: Rural Roads and Access”, ADB, retrieved on 11 August 2020, https://www.adb.org/publications/myanmar-transport-sector-policy-note-rural-roads-access Improving the major road network as well as expanding local roads would significantly improve mobility.
Myanmar’s location makes it a nexus between dynamic economies of South Asia, Southeast Asia, and Southwest China, and it is part of multiple economic corridors. In the Greater Mekong Subregion (GMS), Myanmar forms the western end of the East-West Economic Corridor and is part of the Southern Economic Corridor linking Southeast Asia to China. The Asian Development Bank is currently supporting road upgrades to improve East-West linkages between Myanmar and Thailand.101Asian Development Bank, Myanmar: Greater Mekong Subregion East-West Economic Corridor Eindu to Kawkareik Road Improvement Project, ADB, https://www.adb.org/projects/46422-003/main. Outside the GMS connectivity plans, there have been a series of plans to improve Myanmar’s connectivity with South Asia. The Bangladesh-China-India-Myanmar Economic Corridor, which officially aims to connect Kunming to Kolkata in India but has received little attention in recent years, as well as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), which seeks to improve regional cooperation on a multitude of issues including connectivity between Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand. BIMSTEC appears to be more active than BCIM and is anticipated to have a summit in early 2021.102Sugeeswara Senadhira, “BIMSTEC push for Regional Cooperation under ‘New Normal,’” Daily News, September 11, 2020, at http://www.dailynews.lk/2020/09/11/features/228413/bimstec-push-regional-cooperation-under’new-normal’.
Myanmar has invested significantly in rail networks and currently has the longest national rail network in all of ASEAN. The Mekong Infrastructure Tracker shows more than 5,936 km of existing rail length in Myanmar, which is significantly higher than the other lower Mekong countries. Although the railway network has nearly doubled since 1990,103Asian Development Bank (ADB), “Myanmar: Unlocking the Potential, Country Diagnostic Study”, ADB, retrieved on 11 August 2020, https://www.adb.org/sites/default/files/publication/42870/myanmar-unlocking-potential.pdf usage rates have dropped. Rail had a 44% share of the passenger market in 1990 but this had dropped to 10% in 2013.104Asian Development Bank (ADB), “Myanmar Transport Sector Policy Note: Summary for Decision Makers”, ADB, retrieved on 11 August 2020, https://www.adb.org/sites/default/files/publication/184794/mya-transport-policy-note-es.pdf More than half of the total rail network serves fewer than 1,000 passengers a day, which makes it difficult to justify maintaining rail services solely on a financial basis.105Asian Development Bank (ADB), Myanmar Transport Sector Policy Note: Summary for Decision Makers. As a result of limited traffic and over-expenditure on new line expansion, resources for maintenance and improvement are constrained and the rail network is in poor condition.106OECD, “OECD Investment Policy Reviews: Myanmar”, OECD, retrieved on 5 August 2020, https://www.oecd.org/daf/inv/investment-policy/Myanmar-IPR-2014.pdf This has undermined the competitiveness of the rail network compared to road transit or flying between major cities.
Myanmar faces a bottleneck in terms of urban transportation, particularly in Yangon where population density and car ownership have increased rapidly in recent years. Improved global market access and changes in currency exchange rates made cars more affordable. More than 70% of the national car fleet is in Yangon, and traffic during rush hours has become a major issue and cut travel speeds in half since 2012.107Asian Development Bank (ADB), Myanmar Transport Sector Policy Note: Summary for Decision Makers. The public transportation system has faced significant challenges due to these changes, and this has impacted its usage significantly in the last decade. Public transportation once had a market share in Yangon of over 80%, but it has been shrinking rapidly as car ownership became more affordable and by 2015 had fallen to only 50%.108Asian Development Bank (ADB), Myanmar Transport Sector Policy Note: Summary for Decision Makers. Construction of a full-scale bus rapid transit and improvement of the Yangon Circular Railway are priority plans in Yangon to address these bottlenecks.
|Project Name||Bago – Yangon Railway|
|Main Basin||Sittaung; Irrwaddy|
|Tributary||Sittaung Mainstem; Yenwe Chaung; Kya; Kabaung Chaung; Irrwaddy Mainstem and Delta; Mandalay - Min Chaung; Myitnge|
The Bago-Yangon Railway Upgrade involves improvements to the of the existing 623 km railway track that links Mandalay to Yangon. It will renovate and modernize rail facilities and equipment along the rail route connecting Yangon—the largest city in Myanmar—and Mandalay, which is the second largest city in Myanmar. The railway will also pass through and link other major cities, including the capital Naypyitaw, Bago, and Taungoo. When completed in 2025, the length of time to journey from Yangon to Mandalay will be halved.109Aye Nyein Win, “Yangon – Mandalay train journey will shorten to 8 hours by 2023,” Myanmar Times, January 16, 2018, accessed November 2, 2020, at https://www.mmtimes.com/news/yangon-mandalay-train-journey-will-shorten-8-hours-2023.html. A portion of the project’s cost will be funded by Japanese ODA loans.110“Japan provides over Y47 B loan for two development projects in Myanmar,” Eleven Myanmar, April 2, 2020, accessed November 2, 2020, at https://elevenmyanmar.com/news/japan-provides-over-y47-b-loan-for-two-development-projects-in-myanmar.
Myanmar’s economy is undergoing rapid industrialization. Industrial development in Myanmar had been comparable to its neighbors in the early 1990s, but as a result of sanctions and a lack of market-based policies Myanmar fell behind its neighbors. By 2004, industry only provided approximately 10.5% of national GDP in Myanmar compared to more than 25% in Laos, 27% in Cambodia, and 40% in Vietnam.111Myanmar Development Research Institute, Pilot Assessment of Industrial Zones in Myanmar, Myanmar Development Research Institute & Centre for Economic and Social Development, 2014, page 12. However, the government has taken many steps to encourage industrialization after opening up in 2011 and industry has risen rapidly risen to provide more than 28% of national GDP by the early 2010s.112Wendy Cunningham and Rafael Munoz, editors, Myanmar’s Future Jobs: Embracing Modernity Main Report, World Bank Group, October 2018, page 7. However, this has not been matched by a rapid rise in higher-paying industrial jobs. As of 2018, agriculture still provided just under 50% of total employment in Myanmar, followed by services (33.5%) and with industry only providing approximately 17% of total employment.113International Labour Organization, Myanmar: Employment and Environmental Sustainability Fact Sheets 2019, page 2, at https://www.ilo.org/wcmsp5/groups/public/—asia/—ro-bangkok/—ilo-yangon/documents/publication/wcms_624758.pdf.
The Mekong Infrastructure Tracker dataset provide details on more than 86 airports, railway stations, sea or inland ports, special economic zones, and other industrial zones of note in Myanmar which provide connectivity and other essential business and logistics access for companies in Myanmar.
Myanmar has nine ports along its approximately 2,300 km of coastline, but river waterways bring goods throughout the country and there are more than 400 ports along major rivers.114Oxford Business Group, “Growing international trade encourages investment in Myanmar’s maritime infrastructure,” The Report: Myanmar 2020, accessed November 2, 2020, at https://oxfordbusinessgroup.com/analysis/port-call-increased-trade-and-freight-movement-encouraging-greater-investment-maritime. Yangon is the economic capital of Myanmar, and with more than 5 million residents and the majority of industrial production facilities it is a critical hub. Yangon’s port infrastructure handles approximately 90% of Myanmar’s total cargo.115OECD, OECD Investment Policy Reviews: Myanmar.
None of Myanmar’s existing ports have access channels deep enough for large container and conventional vessels.116OECD, OECD Investment Policy Reviews: Myanmar. These existing limitations and rising needs tied to rapid economic growth have prompted the Myanmar Port Authority (MPA) to construct six new domestic ports along the Irrawaddy (Ayeyarwaddy) River and Chindwin (a tributary of the Irrawaddy), as well as establish five new international shipping terminals near Thilawa and Yangon.117OECD, OECD Investment Policy Reviews: Myanmar. Construction of a deep-sea port near Yangon is also prioritized under the National Transport Master Plan.118Thompson Chau, “Myanmar to pick deep-sea port location next year,” Myanmar Times, July 24, 2019, accessed November 2, 2020, at https://www.mmtimes.com/news/myanmar-pick-deep-sea-port-location-next-year.html.
Myanmar has relatively accessible air transportation, in part because of high dependency on tourism for income. There are currently three large international airports in Mandalay, Naypyidaw, and Yangon, as well as 30 additional domestic airports.119OECD, OECD Investment Policy Reviews: Myanmar. The government has prioritized increasing the supply and efficiency of airport infrastructure and safety regulations to meet rapidly rising passenger demand. The number of foreign travelers rose from around 1 million per year in 2010 to nearly 6.7 million in 2016, and domestic air travel also increased nearly four times during that same timeframe.120Khine Wa Lin, “Burma Commercial Guide: Aviation,” U.S. International Trade Administration, October 13, 2019, accessed November 2, 2020, at https://www.trade.gov/knowledge-product/burma-aviation. This correlated to Myanmar’s economic and political opening and the corresponding rise in tourists and business travelers who flocked into the country. To cope with the growing number of tourist and business travelers, the government plans to upgrade some domestic airports into international airports and construct a new international airport.121OECD, OECD Investment Policy Reviews: Myanmar.
Special Economic Zones
Although the government has had policies for the establishment of industrial zones for decades, Myanmar only enacted laws allowing the establishment of Special Economic Zones (SEZs) starting in 2014, and the government classifies SEZs as either free zones and promotion zones.122Directorate of Investment and Company Administration (DICA), Ministry of Investment and Foreign Economic Relations, “Special Economic Zones,” accessed October 13, 2020, at https://dica.gov.mm/en/special-economic-zones. Both are intended to attract and promote international investment and offer varying levels of tax exemptions, customs exemptions, and other benefits not seen elsewhere in the country. There are currently three Special Economic Zones: the Thilawa SEZ (operational as of 2015), the Dawei SEZ (under construction) and the Kyaukphyu SEZ (under construction).
Prominent Industrial Zone Snapshot: Thilawa Special Economic Zone
|Project Development Cycle Stage||Operational|
|Year of Completion||2015|
|Total Investment (million USD)||3280|
|Sponsor/Developer:||Myanmar Japan Thilawa Development Ltd.|
|Country list for Sponsor/Developer||Myanmar; Japan|
|Lender/Financier||Japan International Cooperation Agency|
|Country List for Lender/Financier||Japan|
|State or Province||Yangon|
|Main River Basin||Irrawaddy|
|Tributary||Irrawaddy Mainstem and Delta|
|Data Source||Open Development|
The Thilawa Industrial Zone is one of only three Special Economic Zones in Myanmar and is supported by Japan through the Japan International Cooperation Agency. Thilawa SEZ was the first to commence operation: it began development in 2013 and began operations in the first of multiple activity zones starting in September 2015.123JICA, “Signing of Joint Venture Agreement for Further Development of the Thilawa Special Economic Zone (SEZ),” October 21, 2016, accessed October 13, 2020, at https://www.jica.go.jp/english/news/press/2016/161021_01.html. Thilawa SEZ is adjacent to the Thilawa Port and is close to many other industrial zones and Yangon. As of 2017, more than 78 firms had located their production facilities, factories, or logistics hubs in Thilawa SEZ and construction had already begin on the second Zone.124Khine Kyaw, “Success story’ Thilawa SEZ set to launch its second phase,” The Nation Thailand, February 26, 2017, accessed October 13, 2020, at https://www.nationthailand.com/business/30307322.