Written By Min Htee 

The Kyaukphyu Special Economic Zone project in Arakan State, an idea initiated by China under former dictator Senior-General Than Shwe, has been under preparation for more than a decade, until the military seized power after two successive democratic governments. 

China has referred to Kyaukphyu as “the Pearl City of the Bay of Bengal.” Myanmar, neighbour of fast-growing China, has seen little progress under the democratic government, but the country is on the verge of dying of a chronic illness after the military took power on February 1, 2021. 

Kyaukphyu is one of the most important areas for China to implement its Belt and Road Initiative (BRI). China has already built some infrastructure projects worth billions of US dollars in Kyaukphyu Township. 

The military regime is working hard to build the Kyaukphyu Special Economic Zone. Five months after the coup, the Myanmar junta appointed former Deputy Minister for Rail Transportation U Myint Thein, who chaired the Kyaukphyu Special Economic Zone Implementation Committee under the previous U Thein Sein government, as chairman of the Kyaukphyu Special Economic Zone Project Implementation Committee. 

The Chinese government has not commented publicly on Chinese investment in Myanmar since the military seized power. China International Trust and Investment Corporation (CITIC) won contracts for deep-sea port and special economic zone (SEZ) projects in 2015. 

According to the initial agreement signed with Myanmar ex-President U Thein Sein’s quasi-civilian government, CITIC took an 85% stake in the deep-sea port and a 51% stake in the Kyaukphyu SEZ. However, amid political sensitivity surrounding Chinese investment in Myanmar and concerns over China’s debt-trap diplomacy, CITIC agreed to drop its ownership stake from 85% to 70%. The Chinese and Myanmar governments have agreed to spend US$7.3 billion on the project, with the Chinese government and Myanmar agreeing to start with US$1.3 billion for the first phase of the project and expand it once the first phase is completed. 

Myanmar will have to contribute more than US$1 billion, but only about US$100 million will be invested in the first phase of the Kyaukphyu deep-sea port project.  

Following the military coup in Myanmar, the junta set up a Steering Committee for Implementation of BRI Projects to reimplement the Kyaukphyu Special Economic Zone. To date, neither the Myanmar junta nor China has said exactly how the project will begin. Although the military has seized power, it has not announced the abolition of the 2008 Constitution and it is expected that the existing laws will continue to be used as the basis for the projects. 

In 2018, Myanmar and CITIC Group signed a framework agreement on the deep-sea project. The following year, the Chinese firm hired Canadian company HATCH to supervise the environmental impact assessment (EIA) and a “pre-geo survey.” But experts from the Canadian firm was able to visit Kyaukphyu only one time due to the Covid-19 pandemic. 

The EIA process has been suspended since the coup, and some companies have been hired to continue work on an Environmental Social Impact Assessment (ESIA) project to build a deep-sea port on Maday Island in Kyaukphyu Township. It is not yet known whether the Canadian-based consulting firm, which was hired by the NLD government to do the EIA for the Kyaukphyu deep-sea port, will continue to conduct the EIA. 

However, preparations have been made since the NLD government to seize 250 acres of land in the Kyaukphyu SEZ industrial zone. The 250 acres of land to be confiscated includes land belonging to more than 70 landowners from four village-tracts. There are more than 100 acres of land owned by local people in the first farmland to be confiscated, and the land to be confiscated now includes more than 60 acres owned by three unknown people. 

The property of these three people is registered land plots under Myanmar land ownership law. According to a statement issued by the NLD government that compiled the list of confiscated lands, the General Administration Department identified 22 local landowners as occupiers. Under Myanmar’s land ownership law, land can be used for other purposes, with a certificate of ownership for at least 35 years. 

According to local farmers, it is not known from whom the land was applied for and when it was acquired. Local landowners are still working on the land in the project area, and only the names of the three men can be seen in the confiscation statement, local farmers said. Twenty-two encroachers have been identified so far, but it is not known whose lands were among the confiscated. What is certain is that 22 traditionally owned farmers have become the occupiers. 

Compensation for land confiscation was claimed during the construction of the Shwe gas field and pipeline project in 2010. During the construction of the Shwe gas field and pipeline project, a military officer took more than 25 acres of land owned by the villagers of Pyar Tae village and demanded more than K30 million in compensation, with some locals losing money. 

This highlights the corruption of government departments, and those who have access to information in areas affected by the project are working with the authorities to apply for land ownership and seek compensation without the knowledge of local farmers. Even before the Kyaukphyu SEZ has launched, local farmers have become the encroachers. 

There have been a number of land disputes over the Shwe gas field and pipeline project in Kyaukphyu Township, and locals have been protesting against the companies involved. Local land ownership rights have been violated since before the land was confiscated in the Kyaukphyu SEZ project area. The government needs to reconsider these issues and address them truthfully. 

The Kyaukphyu SEZ offers many opportunities for Arakan State and many challenges for the local people. I believe that if there is no guarantee of land and employment opportunities and the focus is on getting the project started, it will lead to more challenges than opportunities for the local people.

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