World Bank & Thilawa

The first phase – Zone A - of Myanmar's Thilawa Special Economic Zone (SEZ) in Southeastern Yangon becomes Myanmar's first operational SEZ. It is being implemented in two phases: Phase-1 takes up 211 hectares, while Phase-2 is 184 hectares and is expected to be completed by mid-2016.

The project is part of the new economic cooperation between Japan and Myanmar. The Japan-funded 1.5 billion U.S. dollar SEZ project is a manufacturing complex designed to lure investment and help the country compete in the global marketplace. Currently, SEZ has investors from 47 companies in 13 countries, including four from Thailand. Nearly half, 23, are from Japan. Others are from Taiwan, Singapore, Malaysia, Australia, China, Hong Kong, Sweden, the United States, South Korea and Vietnam. Almost all companies are in the manufacturing sector.

With foreign investments in manufacturing sectors, infrastructure and general business, rapid economic development is now underway. Myanmar will also offer special opportunities for those in supporting industries - especially industrial parts. Machinery and equipment will be in demand from manufacturers and subcontractors need to prepare in order to handle this unprecedented growth opportunity.

2016 GDP growth in ASEAN is projected to be led by Myanmar where the World Bank forecasts growth of 7.8 per cent - a 20 per cent increase over the country’s 2015 growth of 5.8* per cent.   With continued economic reforms and foreign direct investment, the country’s economic prospects look highly favorable for the future.

For ASEAN member countries, 2016 promises a mixed bag with the World Bank forecasting Thailand’s economy to remain on the intensive care list, shrinking  20%  from the 2015 GDP of 2.5* per cent.. This is primarily due to lower domestic consumption, higher household debt and lower export growth.

More Thai companies are expected to pursue business opportunities in Myanmar with the newly liberated country becoming a manufacturing hub for foreign investors and several of them relocating plants from Thailand. Myanmar is particularly attractive thanks in part to the competitive labour wage of just US$3 per day.

Myanmar is currently considered untapped as both a production base and consumer market in Southeast Asia. Meanwhile, although the per-capita GDP remains low at about $900, the population of more than 50 million presents a huge new market for a wide variety of products.

Thai companies should seek local business partners, open a representative office in Myanmar, or set up their own factories or industrial estates in order to enjoy liberal tax privileges and serve the local market as they explore opportunities in India, China and Europe.

 

*www.worldbank.org

 


 
 
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