With U Set Aung in charge, no excuse for Kyaukphyu to repeat Thilawa’s rights abuses

Chair of Thilawa Special Economic Zone Management Committee (TSMC) is now also at the helm of Kyaukphyu’s SEZ body. Given that there is now an SEZ precedent to learn from, U Set Aung should ensure Kyaukphyu does not repeat the human rights abuses and lack of transparency in which Thilawa was mired.

U Set Aung, deputy finance minister and chair of the TSMC, has been appointed as chair of the Kyaukphyu SEZ Management Committee (KSMC) as of May 8, according to a notice from SEZ Central Body chaired by Vice President Henry Van Thio released earlier this month. The appointment makes him responsible for two of the country’s three SEZ projects. The minister is also a new member of the Myanmar Investment Commission and was deputy governor of the Central Bank of Myanmar.

Finance minister U Soe Win, the former chair of Kyaukphyu SEZ Management Committee, will now serve as the joint chair of this committee. The KSMC reports to the SEZ Central Working Body, which in turn reports to the SEZ Central Body.

U Kyaw Aye Thein, vice chair of KSEZ, told The Myanmar Times that the appointment will speed up the implementation of the project. “Now, we will try and focus on signing an agreement between the committee and the developer, CITIC-led consortium. After signing the agreement, we will move ahead to implement the project.”

Permanent secretary at the planning and finance ministry U Tun Tun Naing was quoted by a local paper saying U Set Aung’s “performance in Thilawa has been a success” and hence he will shoulder responsibility for Kyaukphyu.”

“He has already been involved in the Kyaukphyu SEZ since the government started renegotiating [the project agreement] with China,” the civil servant said.

Pietro Borsano, lecturer at Mandalay International University and counsel at AdvisingAsia, cautioned against “comparing like with like” when it comes to the two SEZs. Thilawa is a Japan-led project which seeks to develop the manufacturing sector, whereas Kyaukphyu is concerned with Belt and Road connectivity.

“Large Japanese conglomerates such as Sumitomo and Mitsubishi support the SEZ and in terms of management and scope of work there is little ambiguity.”

“While Kyaukphyu involves big multinationals, including Thailand’s CP Group, it is perceived as a mega-project primarily to facilitate China’s Belt and Road Initiative. In the past three years, the proposals and debates regarding the project have not been clear or transparent,” Mr Borsano explained, adding that the new leadership will “hopefully” clear up the confusion.

U Set Aung, with his experience managing Thilawa, should address Kyaukphyu’s environmental and human rights issues and promote responsible investment.

“U Set Aung should not allow Kyaukphyu to repeat the human rights violations, lack of transparency and displacement issues which Thilawa caused, especially when there is now a precedent to learn from. Yet, that will be very hard to achieve,” the academic conceded.

Who’s calling the shots?

The latest appointment does not help clarify which official is calling the shots when it comes to Kyaukphyu.

According to U Tun Tun Naing, permanent secretary of the Ministry of Planning and Finance, negotiations of the Kyaukphyu project are being led by finance minister U Soe Win and his ministry’s Directorate of Investment and Company Administration (DICA). The minister said that the government is planning to downsize costs related to the Kyaukphyu project amid rising concerns that Myanmar could be taking on too much debt to fund it.

But the SEZ Central Working Body, chaired by commerce minister U Than Myint, should be the authority which governs SEZs. U Than Myint revealed recently that some agreements on the project have been reached and “the whole SEZ will not be implemented at once” but it will be developed “in parts”.

The proposed Kyaukphyu SEZ, located in Rakhine State, consists of an industrial park and a deep-sea port. In 2015, a CITIC-led consortium won the bid to be the developer. Discussions under the National League for Democracy-led government have focused on shifting the stake ratio to 70:30. U Thein Sein’s government originally agreed to give the CITIC consortium an 85 percent stake.

Source: Myanmar Times

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