To boost their international competitiveness, the governments of Myanmar and Thailand have recently joined forces and launched an ambitious plan to develop a new business hub. The development of the so-called Dawei Special Economic Zone is realised with funding of several private developers, and supported by management consultants from Roland Berger.
Last week, on August 5, the Myanmar government and a consortium of private developers signed a concession agreement regarding the Dawei Special Economic Zone (Dawei SEZ) initial phase development*. The launch of the programme marks a significant milestone in Myanmar's economic development – the zone is expected to create hundreds of thousands of jobs in the long-term and contribute up to 5% of Myanmar's GDP by 2045. If all goes according to plan, the initiators believe Dawei SEZ could even become one of the largest special economic zones in the world, leveraging its strategic position in the center of South-East Asia. The hub provides access to the Andaman Sea to the west, proximity to Bangkok and Thailand's Eastern Seaboard and further beyond, to Cambodia and Vietnam.
In preparing for the initial phase development the initiators commissioned Roland Berger to guide the process. The consultants in addition supported the development of the long-term master plan of Dawei SEZ, in doing so collaborating with officials and a wide range of related ministries from both countries on a daily basis. The decision to hire Roland Berger as an external advisor builds on previous engagements the firm supported in Myanmar. In 2013, the German-origin advisory was engaged by the country’s government to advise and manage the international tender process for two new telecom licenses. The consulting firm has also advised the Central Bank of Myanmar in the tender process for international banking licenses in 2014-2015.
The first phase in the process involves the construction of a small port, power plants, a two-lane road to Thailand, an LNG terminal, an initial township, a telecom landline and an industrial estate focusing on labour-intensive industries. While the initial phase development will target labour-intensive industries such as textile and garments and food processing, the long-term master plan will attract other industries to Dawei SEZ as well. These industries include automotive, steel, electronics and electric goods, rubber, metals, chemicals, refinery, fertilizers, plastics and pharmaceuticals.
"Eventually, the zone will have a deep seaport as well as a highway to Thailand," says Damien Dujacquier, Partner at Roland Berger. "The aim is to create a regionally-integrated, world-class and export-focused special economic zone." He adds that Dawei SEZ would be developed in an environmentally and socially sustainable manner, in line with international practices.
"Investors will be attracted by its strategic location, competitive labour costs and import duty exemptions to key export markets such as the European Union. Additionally, an investor-friendly SEZ legal framework, as well as strong growth of the overall Myanmar economy and the abundance of certain local resources will also buoy interest from the business community," Dujacquier comments.
In the coming months, advisors from Roland Berger will continue to assist the Myanmar and Thai governments on the further development and roll-out of the programme.
* The consortium of private developers includes Italian-Thai Development Public Company Limited, Rojana Industrial Park Public Company Limited and LNG Plus International Company Limited.