July 23 (Bloomberg) -- Thai Prime Minister Yingluck Shinawatra said her government was committed to seeing “concrete progress” in the development of the $8.6 billion Dawei port and industrial zone in neighboring Myanmar.
Thailand and Myanmar agreed to hold ministerial-level meetings starting next month to push forward with the project, Yingluck told reporters in a joint briefing with Myanmar President Thein Sein today in Bangkok.
Developer Italian-Thai Development Pcl has found it difficult to secure funds for the project at Dawei, which sits about 350 kilometers (219 miles) west of Bangkok. The company is courting Japan to secure $12.5 billion in loan agreements this year to build the port, roads, power plants and a railway, Chairman Premchai Karnasuta said on Dec. 26.
The ministerial committee will discuss “pending issues related to the development of the Dawei seaport as well as the expansion of areas necessary for industrial development,” Yingluck said. “It will also take into account the interests of the communities living in and around the Dawei area.”
Thein Sein arrived yesterday for a three-day trip and visited Laem Chabang port, near Thailand’s biggest industrial zone that companies such as Ford Motor Co. and Samsung Electronics Co. use as a production base. Thailand and Myanmar plan to link Laem Chabang with Dawei, and may open three more permanent checkpoints on their shared border, Yingluck said.
Thein Sein is seeking to attract labor-intensive industries after pledging to create jobs and targeting economic growth of 7.7 percent per year until 2016. Democratic reforms since he took power last year prompted Western nations to ease sanctions and galvanized lawmakers to focus on economic growth after about five decades of military rule left Myanmar disconnected from the global financial system. Thein Sein today reiterated his government’s commitment to democratic reforms.
“The government’s biggest priority now is to realize the inflows of Western investment and aid that have been among its main goals in implementing the reform process,” Eurasia Group, a New York-based political risk firm, said in a July 20 report. U.S. and European companies will face “strong competition” from those in Thailand, China, Japan and South Korea, it said.
President Barack Obama this month authorized U.S. companies to invest in Myanmar for the first time in about 15 years, including with a state-run oil firm that opposition leader Aung San Suu Kyi urged multinationals to avoid. Thein Sein met Secretary of State Hillary Clinton at a July 13 business forum in Phnom Penh that included representatives from Google Inc., Goldman Sachs Group Inc., Boeing Co. and General Motors Co.
Thailand, Myanmar’s second-biggest trading partner and investor, is home to about two million migrant laborers who crossed the 1,800-kilometer border looking for work. While the neighboring countries both have similar populations of about 64 million people, Thailand’s economy is about seven times bigger, according to International Monetary Fund estimates.
Ko Ko Hlaing, the top political adviser to Thein Sein, questioned Italian-Thai’s ability to oversee the Dawei project during a May 2 interview in Yangon.
Executives at Thailand’s biggest construction company “haven’t much experience in developing such a very big special economic zone,” he said. “We need other big investors.”
Suu Kyi, visiting Bangkok last month on her first trip outside Myanmar in 24 years, called for transparency in all investments and aid outlays. Projects like Italian-Thai’s planned deep-sea port left people “completely in the dark” about what the contracts contained, she said on June 1 at the World Economic Forum meeting that Thein Sein also planned to attend before canceling at the last minute.
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