Myanmar’s Important Position to Enhance Regional Connectivity TEXT Presentation at International Conference to Commemorate the 20th Anniversary of ASEAN-India Cooperation, Chulalongkorn University, Bangkok, 20-21 September 2012
Tin Htoo Naing Yangon institute of Economics Myanmar • The new government, in office since April 2011, has ushered in a new era for Myanmar.
• It is the first democratically elected government to come to power through general elections in five decades.
• The government has put in place measures to achieve positive changes in political, economic and social spheres in line with the market conditions and international circumstances. • The genuineness of the democratic reforms carried out by the new government is widely questioned.
• Some observers generally accept that the reforms have been genuine and are likely to be irreversible, but believe that the rush to reform may possibly cause burnout in Myanmar because the financial, technical and managerial capacity of the government institutions and all stakeholders fall behind the pace of reforms. • In politics, although it cannot be said that political conflicts and struggles for democracy that have been locked in many years of stalemate have been resolved, cooperation on the common grounds has become a possibility based on the concept of unity in diversity.
• In the ethnic affairs, negotiations have been carried out with almost all the nationality organisations that have been engaged in armed insurrection for decades and most of them have resulted in preliminary agreements and successes while some racial strife remain and delay the reform process.
• In the economic sphere, development ideologies and strategies are also to be altered in accordance with the change of government system. Table 3.1 Myanmay SWOT Analysis
Strength Weakness Abundant natural resources (agriculture, Macroeconomic instability associated gas, oil, minerals, precious stones) with a number of policy inconsistencies Less population pressure on land (Land- and weak institutions population ratio is relatively high.) Low saving and investment rates Half of arable land area fallow Lack of implementing capacity and Abundant trainable labor force with basic governance issue education Underdeveloped banking and financial Well connected to major Asian market: system ASEAN, China and India High dependence on natural resource Strategic location: Geopolitical extraction and agriculture sector importance for regional connectivity as Poor infrastructure, institutional and the tri-junction of East Asia, Southeast business environment Asia and South Asia High poverty, low HDI, low income and Benefit of late comer in development: can high outmigration rate leapfrog Lack of comprehensive approaches and Significant foreign exchange reserves appropriate funding to human capital formation Absence of accurate and reliable economic data to provide exact diagnostics of the economy Opportunity Threat Regional hub for multimodal Resource Curse: lack of balancing transportation and a potential supply route economic growth and environmental bypassing the Malacca Strait sustainability Sole land-bridge between two giant Danger of Dutch disease economies; China and India Social and Spatial inequality High potential to be a ‘food basket’ and Increase in corruption ‘energy source’ for Asia Political instability and ethnic insurgency Huge industrial potential for FDI from International pressures and economic ASEAN and global supply chains sanctions Strong influence of China
Source:J.P. Verbiest and Tin Htoo Naing (2011), ASEAN 2030 Study, Asian Development Bank Institute Reviewing Myanmar Strategic Potential
Bangladesh Bangladesh 156 Mil 60 Million Laos 7 Mil $242 Bil $57.5Bln Laos $15 Bil
Total Population Total GDP(ppp) 22,,793793 MillionMillion US$13,203 Billion 4141%% of World’s Population 17% of World GDP
World Fact book, 2011 and UMFCCI Source: UMFCCI • Connectivity
• Myanmar is of geopolitical importance for regional connectivity with its location at the tri-junction of East Asia, Southeast Asia and South Asia, and a potential central hub for exchange of goods, services and technology.
• Underdeveloped infrastructure and unfavorable institutional and business environment seriously limit participation of the economy into regional and global networks.
• The cross-border connectivity plays a very important role in this scenario. ACCESS ROAD TO NEIGHBOURING COUNTRIES FROM MYANMAR
(1) ASIAN HIGHWAYS (32) countries - 141000 km
(2) ASEAN HIGHWAYS (10) countries - 37070 km
(3) GREATER MEKONG SUBREGION, GMS-HIGHWAYS (6) countries , (9) corridors
(4) BIMSTEC HIGHWAYS
(5) INDIA-MYANMAR-THAI TRIPARTITE HIGHWAY
(6) INDIA-MYANMAR, THAI-MYANMAR, BANGALARDESH -MYANMAR BILATERAL HIGHWAYS
(7) GMS, EAST-WEST ECONOMIC CORRIDOR HIGHWAYS
(8) GMS, NORTH-SOUTH ECONOMIC CORRIDOR HIGHWAYS
Source: Ministry of Transport, Myanmar
GMS Connectivity:
200620062015201519921992
RoadsRoads
Telecommunications
Power Transmission Line
Source: ADB Current Status of Projects along Asian Highways
• ASIAN Highways in Myanmar, AH1, AH2, AH3 and AH14, most of the routes are either overlapping or contiguous with other Highways. Myawady to Thingannyinaung of about (18)km is already upgraded to AH class III Standard, with the Grant Aid of Thai Government.
Kyaikhto to Mandalay, including Payagyi-Yangon section of about 893 km is already upgraded to AH standard with the Government budget and Private sectors by B.O.T basis.
-The last section of Kalay/Kalewa to Tamu of about (150)km was upgraded to the intermediate road class, with (5.5) meter carriageway width, with the grant aid of India Government, still need to upgrade AH standard.
Ministry of Transports • AH2 starts from Thai-Myanmar border cities of Maesai-Tachileik to meet the AH1 at the city, Meiktila via Kyaington and is about (807)km. -Tachileik to Kyaington section of about (164)km is upgraded to AH class III standard by B.O.T. -Kyaington to Meiktila section of about (643)km is under upgrading to AH class III standard by Construction units from Public Works, MOC, with Government budgets and (79)km is already upgraded . • AH3 (93)km, the section between Kyaington and Mongla, the city at the border of Myanmar and China, is upgraded to two lanes bituminous paved road, but still need to improve to get AH class III standard. • AH14 (453)km, with AH class III standard, is operated by B.O.T scheme. Construction of new bridges and culverts in the places of old bridges and culverts along the AH in accordance with the AH design loading. Strategic Location
Kunming
Chennai Dawei
Southern Economic Corridor & Indian Ocean Gateway MEKONG-INDIA ECONOMIC CORRIDOR Myanmar is placed on the Northern Corridor, North-South Economic Corridor and East-West Economic Corridor and, Southern and Western Corridors.
Although East-West Economic Corridor known as EWEC connects eastern ASEAN countries, Western Corridor and Southern Economic Corridor are the key base to establish Mekong-India Economic Corridor (MIEC) by extending the Souce: ADB link to Dawei of Myanmar. • India-Myanmar-Thailand Trilateral Highway project under the Mekong-Ganga cooperation initiative that started in 2005 is also a vital one to improve cross border connectivity between India and Myanmar - 1360 km, US$ 700 million, runs from Moreh in India to Maw Sot in Thailand through Bagan in Myanmar.
• The road from Moreh to Mae Sot via Bagan includes part of East-West Economic Corridor (EWEC) in Myanmar, particularly Myawaddy- Mawlamyine section and part of No.1 Asian Highway (AH 1). India-Myanmar-Thailand Trilateral Highway
Asian Highway Standard Road
Bago-Meiktila, Rainwater makes part of AH1 in the route muddy Myanmar, is and blocks the drive advantageous to be part of TH.
Myitha Bridge …
Old and Narrow Bridge
Too Narrow to Pass Across Up and Down Vehicles … • India-Myanmar Friendship Road: Among the several projects, completion of the 160km India-Myanmar Friendship road in 2001 on Myanmar territory, connecting Kalewa, Kalemyo and Tamu with Moreh was very imperative sub-regional integration between two countries. • With the grant-aid of the government of India, Kaly-Tamu road was completely upgraded and opened in Feburary 2001. • Tamu-Kyigone-Kalemyo section of about 82 miles and 4 furlongs was also completed in September 2009. • Kyigone-Kalewa section of about 17 miles and 4 furlongs has been still under maintenance by the India side although it was planned to be completed by the first half of 2010. • Tiddim-Rhi-Falam road: Engineers and surveyors from Border Road Organization of India and Public Works of Myanmar had prepared detailed Project Report (DPR) of upgrading Tiddim-Rhi-Falam road since 2006.
• A technical team from India also visited to consult with the Myanmar government with regards to the Tiddim-Rhi-Falam road upgrading project in 2008.
• Again, a delegation from two countries conducted a reconnaissance survey in 2009 and India allocated USD 60 million for the respective project.
• At present, the draft MOU for the project is underway to realize the upgrading project. Railway Lines of International Importance in Myanmar
Existing lines Mandalay-Yangon = 617 km Mandalay-Lashio = 313 km Mandalay-Kalay = 539 km Bago-Thanbyuzayat = 270 km Missing lines Kalay-Tamu = 127.4 km** Lashio-Rueli = 141.8 km** Thanbyuzayat-Three Pagoda Pass = 110 km**
** The route lengths of missing lines are referred from feasibility reports
Source: Ministry of Rail Transportation Indian-Myanmar Rail link (Kalay-Tamu)
The missing length between Kalay and Tamu is 127 Km in Myanmar Territory. A survey team from Rail India Technical and Economics Services (RITES) had made feasibility study for that link in 2004.
Source: Ministry of Rail Transportation China-Myanmar Rail link (Muse-Kyaukpyu)
The Memorandum of Understanding (MOU) has been already signed between Ministry of Rail Transportation and China Railway Engineering Corporation on Muse-Kyaukpyu rail transportation system project at 27th April, 2011. Two parties are negotiating to sign Memorandum of Agreement at present.
Source: Ministry of Rail Transportation Deep Sea Ports Projects in Future
All existing ports of Myanmar including Yangon Port are river ports and not deep enough for large KYAUKPYU conventional vessels and container vessels. For long term requirement, if the economic situation of the country and the region demands traffic of KELAGAUK larger vessels, then the development of Deep Sea Commercial Ports will DAWEI have to be implemented at suitable sites along the coast of Myanmar BOKPYIN such as Kyaukpyu at western coast and Kalegauk, Dawei and Bokpyin at eastern coast of Myanmar. Dawei Deep Seaport Project
Framework Agreement has been signed between Myanma Port Authority and Italian-Thai Development Public Co., Ltd on 2nd November, 2010. • The project has been progressing slowly due to limitation of financial resources, which remains a contentious issue as noted elsewhere. • Environmental groups and local inhabitants who would be forced to abandon their villages and traditional sources of income, fishing and farming, have opposed the project. • Civil society and academics have pointed out that the project has yet to take into account core principles mentioned in the Asean Charter, including respect for human rights, cultural identity and diversity and sustainable development and environmental conservation goals. • KyaukPhyu Seaport Project:
–Line: Single track with consideration of expansion to double –Bridge and tunnel ratio: 40% –Maximum speed: 160km/h –Type of traction: Diesel –Total length: 997 kilometer Kyaukphyu Gas Pipeline Project April 2012 • Kaladan Multimodal Transport Project: A major purpose is to develop Sittwe port (Myanmar) by India Government for supporting the cargo flow from Kolkata to Aizawl (Mizoran State, India) through Kalandan river (Myanmar). • The project involves a major upgradation of infrastructure at Sittwe, located about 250km from the Mizoram border on the north- western coast of Myanmar where the Kaladan river joins the Bay of Bengal (IPCS 2008). • The project will connect Kolkata seaport, East India with the seaport in Sittwe (Arakan State) – a total distance of 539 km. It will then link Sittwe to the landlocked area of Mizoram in Northeastern India via Kaladan river and road transport. • M/S ESSAR Co.,Ltd (India) with Max Myanmar Construction Co., Ltd. Lawngtlai NH-54
Nalkawn Saiha Kaladan Multimodal Transport Project Bungtlang Tuipang
Tuithumhnar (Mizoram State)
(Chin State) Project Road Project
Kaletwa (Setpyitpyin)
Paletwa
Kyauktaw River Kaladan Mahamuni Pagoda
To Mrauk-U
Sittwe
Schematic Diagram Showing Proposed Trade Route from Sittwe Port (Myanmar) to NH-54 (India) Foreign Investment of Permitted Enterprises as of (30/11/2011) (By Country) (US$ in Million) Sr. Permitted Enterprises Particulars No. Approved % No. Amount
1 China 33 13947.146 34.50 2 Thailand 61 9568.093 23.67 3 Hong Kong 38 6308.495 15.61 4 Republic of Korea 47 2938.857 7.27 5 U.K * 51 2659.954 6.58 6 Singapore 74 1818.613 4.50 7 Malaysia 39 977.461 2.42 8 France 2 469.000 1.16 9 U.S.A 15 243.565 0.60 10 Indonesia 12 241.497 0.60 11 The Netherlands 5 238.835 0.59 12 Japan 22 211.902 0.52 13 India 5 189.000 0.47 14 Philippine 2 146.667 0.36 15 Russia Federation 2 94.000 0.23 16 Australia 14 82.080 0.20 17 Austria 2 72.500 0.18 18 United Arab Emirates 1 41.000 0.10 19 Canada 14 39.781 0.10 20 Mauritius 2 30.575 0.08 21 Panama 1 29.101 0.07 22 Viet Nam 2 23.649 0.06 23 Germany 2 17.500 0.04 24 Denmark 1 13.370 0.03 25 Cyprus 1 5.250 0.01 26 Macau 2 4.400 0.01 27 Switzerland 1 3.382 0.01 28 Bangladesh 2 2.957 0.01 29 Israel 1 2.400 0.01 30 Brunei Darussalam 1 2.040 0.01 31 Sri Lanka 1 1.000 0.00 Total 456 40424.070 100.00 *Inclusive of enterprises incorporated in British Virgin Islands, Bermuda Islands and Cayman Islands. Source: UMFCCI, Myanmar Foreign Investments in Myanmar
16000
14000
12000
10000
8000
6000
4000
2000
Permitted Enterprises No. Permitted Enterprises Approved Amount Top 10 Exports and Imports, Myanmar 2011 Conclusion
• The connectivity projects will enhance the strategic importance of Myanmar as a regional logistics and trading hub and will be definitely beneficial for Myanmar, India, ASEAN and for the entire region.
• India-Myanmar-ASEAN Connectivity could be realized through enhanced physical infrastructure development, effective institutional arrangements and empowered people.
• Building an enhanced regional connectivity requires not only the infrastructure development but also the development of new strategies and institutions, more effective implementation of existing and future initiatives (ADB 2010).
• To realize the positive outcomes, Myanmar, India and ASEAN need to respond to the opportunities offered by its geographical and natural advantages and to the competitive advantages brought about by regional and global market chain.