regional integration through dawei development project€¦ · 4 dawei sez strategic location: new...

Presentation by Mr. Arkhom Termpittayapaisith

Deputy Minister of Transport and Secretary – General

of the National Economic and Social Development Board of Thailand

to the Mekong – Five Economic Forum

as part of the 7th Mekong Japan Summit

Tokyo, July 3, 2015

Regional Integration through Dawei Development Project

2

Topics of today's presentation

Overview of Dawei Special Economic Zone 1

Dawei SEZ as a Regional Gateway 2

Reinforcement through Thai Special Economic Zone Development 3

Cooperation between Thailand and Myanmar on Dawei SEZ 4

Current Status of Dawei SEZ 5

3

Dawei SEZ - Introduction

Dawei SEZ is located in Tanintharyi Region of Myanmar, adjacent to the Andaman Sea and ~130 km from the Thai border

Source: Dawei SEZ , NESDB, Ministry of Immigration and Population; Roland Berger

Location

> Located in Southeastern Myanmar, the

Capital of Tanintharyi Region, which

has 1.4 m population in 2014

> Strategically located adjacent to the

Andaman Sea and near the Gulf of

Thailand

Size > 196.5 km2

> One of the largest SEZs in Asia

Yangon (MM)

Vung Tao (VN)

Thai-Myanmar border (Ban Phu Nam Ron)

Bangkok (TH)

Eastern Seaboard (TH)

Chennai (IN)

Distance to

key

locations

OVERVIEW

> Distance (km.) from DSEZ to:

300

450

600

132

1,200

1,050

Andaman Sea

Myanmar

Thailand

Cambodia

Laos

Dawei Kanchanaburi

132 km

Tanintharyi

Gulf of

Thailand

1 Overview of Dawei SEZ

4

Dawei SEZ strategic location: new gateway to the West

Dawei SEZ opens a new gateway to the West, linking India, Europe, Africa and Middle East with ASEAN & East Asia

Source: Globalasia, NESDB, Roland Berger

1) from 4,500 km via the Malacca Strait vs 2,500 km via Dawei's deep sea port; 2) Mekong-India Economic Corridor

2 Dawei SEZ as a Regional Gateway

New gateway to the West Key highlights

Kunming

Nanning

Bangkok

Singapore

Dawei China, Japan, Taiwan, Korea

Vietnam

Thailand

China

India

Europe, Africa & Middle East

Traditional sea route Potential land-based routes vie Dawei

> Strategic location: New gateway to the West connecting Indian

and Pacific Oceans

– Linking between Southeast Asia and South Asia,

the Middle East, Europe and Africa

– Providing alternative trade route to the Strait of Malacca –

with time and cost savings on logistics

– Shortening the distance by approximately 50% or 2,000 km

and reducing 3 days of the shipment time from Bangkok to

Chennai, India1)

> Connecting GMS Southern Economic Corridor markets to

the West: ~USD 120 bn total trade flow of Thailand, Cambodia,

Vietnam to the Western markets

> MIEC2) linkage: complete linkage to India via Chennai – Dawei's

deep sea port

> Dawei SEZ will support Myanmar's regional development

throughout the southern area as there are no big cities in the

southern area except Dawei and Myeik

ESB Cambodia

5

Dawei SEZ completes the GMS Southern Economic Corridor

Dawei SEZ completes GMS Southern Economic Corridor, connecting regional supply chain linkage through Thailand's Eastern Seaboard

Source: NESDB

Kanchanaburi Bangkok Sisophon

Siem Reap

Phnom Penh Ho Chi Minh City

Vung Tau

Quy Nhon

Southern Economic Corridor

Myanmar

Eastern Seaboard

132 km

300 km

450 km

Dawei

2 Dawei SEZ as a Regional Gateway

GMS Southern Economic Corridor Key highlights

> Complete GMS Southern Economic

Corridor: Dawei SEZ establishes regional

connectivity and creates land bridge from

DSEZ – Bangkok – ESB – Phnom Penh –

Ho Chi Minh

> Supply chain linkage with Thailand's

Eastern Seaboard (ESB): co-manufacturing

linkages with the ESB and inducing the

economic activities along the corridor

> Strong economic and political linkage to

ASEAN

> Economic and social development:

job creation, enhanced livelihood and

basic infrastructure improvement

6

Dawei SEZ will be reinforced by the development of Special Economic Zones in Thailand, along the GMS Economic Corridors

3 Reinforcement through Development of Thai SEZ

Source: NESDB

Target Areas for Thai SEZ Development Key highlights

Target SEZ in Thailand

> 10 target areas under the 1st and 2nd phase SEZ

development are located along the GMS Economic

Corridors

> Factors for determining target areas:

– Potential and Competitiveness

– Opportunities

– Infrastructure availability

– Production factors in areas

– Border trade value

– Development policies of the neighboring countries

– Problems/Constraints

Central corridor

East – West corridor

Eastern corridor

North-South corridor

Western corridor

Southern Coastal corridor

Northern corridor

Southern corridor

7

Thailand's SEZ will be supported by incentives and privileges, one-stop-service centre and infrastructure


Thailand SEZ development framework

Source: NESDB

Enhance regional economic integration + Lower disparities

+ Strengthen National Security

The 1st phase SEZs are located in the border areas

Designated

Area OSS

Migrant

Labor

Agricultural

produce Center Incentive &

Privilege

Infrastructure &

Customs

Checkpoint

Special Economic Zones

8

Border SEZ is one of the potential economic areas development in Thailand


Source: NESDB

Border SEZs

• Have Potential for trade and investment

• Strengthen Connectivity with neighboring countries

• Utilize AEC

• Improve livelihood of people

• Focus on potential local economic activities + labor

intensive industries and logistics

e.g. Mae Sot, Sakaeo, Mukdahan

Border SEZs 1 Inland Area 2

Important Production Base

• Distinguish area / major production base of the country e.g. IT Industry

• Locate near Port and export channel

• Most of them are industrial estate or service industry.

e.g. Nakhon Ratchasima, ESB

Business uses high technology to support national industrial restructuring and has less benefits than border SEZ (but more advantage in Infrastructure)

Industrial Cluster 2.1

Provincial Cluster Areas/ Tourism Provincial Cluster

• Unique Areas e.g. island, world heritage sites

• Good transport system e.g. airport, train, port

• Service business e.g. hotel, shopping center

• Opportunities to develop for convention & exhibition business

Tourism / Free Zone 2.2

Areas for Specific Purpose Activities

• Granting benefit for special attractive business investment

• Potential business e.g. Science Park, Research and Development

Center, Duty Free, IHQ (International Headquarter)

Innovation 2.3

9

Thailand's SEZ will be complementary with the development of Dawei SEZ


Thailand SEZ : 1st and 2nd phase development

Source: NESDB

> Thailand's SEZ are targeted to be

complementary with Dawei SEZ, focusing

on industries and services that would be

mutually reinforcing with Dawei SEZ,

namely :

• Agro-industry, fishery industries

• Ceramic products manufacturing

• Textile and garment industries, and manufacture of

leather products

• Manufacture of furniture or parts

• Manufacture of gems and jewelry or parts

• Manufacture of medical devices or parts

• Manufacture of engine and vehicle parts, and

manufacture of machinery, equipment, and parts

• Electronics and electrical appliances industries

• Manufacture of plastic products

• Manufacture of Medicine

• Logistics

• Industrial zones / industrial estates

• Tourism promotion service

> Boosting value chain integration along the

GMS corridors

Tak

Cambodia

Laos

Thailand

Chiang Rai

Nong Khai

Nakhon Phanom

Mukdahan

Sa Kaeo

Trat

Kanchanaburi

Songkhla

Narathiwat

10

The Thai government has been fully supporting the development of Dawei SEZ, in close collaboration with the Myanmar government

Prime Minister President

Deputy Prime Minister Vice President

Minister Minister

Joint High-Level Committee (JHC)

Joint Coordinating Committee (JCC)

Joint Sub-Committee (JSC)

Thai Minister

Myanmar Deputy Minister

Thai Minister


Thai Minister


Thai Minister


Thai Minister


Thai Minister


1. Infrastructure & Construction

2. Focuses Industry & Business Development

3. Power & Energy 4. Community Development & Relocation

5. Rules & Regulation 6. Finance

Policy-level

Coordination-level

Implementation-level

Source: NESDB

Myanmar – Thailand collaboration structure for Dawei SEZ

4 Cooperation between Thailand and Myanmar on Dawei SEZ

11

Thai and Myanmar governments have been working together on the Initial Phase development as well as the Full Phase Master Plan

Source: Roland Berger

Full-phase – Illustration II

Infrastructure overview – Initial Phase vs. Full-phase

Ambition

2 lane road Small port Initial industrial

estate

Small power plant(s)

Telecom landline Small water

reservoir Initial township

More residential housing

Deep sea port

Service industry & Commercial firms

Commercial development

Steel and fertilizer plants

Expanded/new power plant

Factories & more industrial estate

Crude oil refinery

Tourism

Chemical factories

Recreation complex

Resort

Time Initial projects to materialize launch … ... that will lead to much bigger projects in

the future

LNG terminal

Initial-phase – illustration I

5 Current Status of Dawei SEZ

12

For example, the Thai government has submitted a soft loan proposal for the 2-lane road between Thailand and Dawei SEZ

Dawei SEZ – Current status

Initial Phase

> Negotiations with selected developer have been finalized, including initial industrial estate of 27 km2, power plant, water supply, telecom landline, LNG terminal, initial township, 2-lane road, small port

> Signature expected by July – August 2015

Full Phase master plan

> Long-term master plan has been developed, including:

– Target industries

– Required infrastructure

– Spatial plan

> Soft loan for the construction of the 2-lane road between Dawei SEZ and Thai border (pending Myanmar government approval)

> Funding of the development of the master plan

> Signatory party to the MOI with Myanmar and Japan regarding further collaboration in the long-term development

Source: Roland Berger

Status

Support from Thailand already provided


13


The infrastructure development plans to enhance connectivity between Dawei SEZ and Thailand

Andaman Sea

Gulf of Thailand

Myanmar

Thailand

Laem Chabang deep sea port

DSEZ deep sea port

and industrial estate

construction projects

Bangkok Ban Phu Nam Ron border

Kanchanaburi

Bang Yai

Nakhon Pathom

Infrastructure Development in Myanmar

i.e. Road and Port

1 Border Development

i.e. NSW & Kanchanaburi border SEZ

2 Domestic Development in Thailand to enhance logistic infrastructure and Economic areas

i.e. Motorway & Railway

3

The 2 – Lane Road linking DSEZ Motorway Bang Yai (Bangkok) – Kanchanaburi to MM/TH Border

The current existing routes in TH Motorway Kanchanaburi – Ban Pu Nam Ron

Source: NESDB

DSEZ – MM/TH border – Kanchanaburi – Bangkok – ESB

Eastern Seaboard

14

In summary, Dawei SEZ is of strategic importance for the region, which is why the Thai government has been supporting its development

Summary

Summary

> Dawei SEZ opens a new gateway to the West, linking India, Europe, Africa and Middle East with ASEAN & East Asia

> Dawei SEZ completes GMS Southern Economic Corridor, connecting regional supply chain linkage through Thailand's Eastern Seaboard and beyond

> Dawei SEZ will be reinforced by the development of Special Economic Zones in Thailand, along the GMS Economic Corridors

– Thailand's SEZ will be supported by incentives and privileges, one-stop-service centre and infrastructure

– Thailand's SEZ will be complementary with the development of Dawei SEZ, for example focusing on higher value added services

> As a result, the Thai government has been fully supporting the development of Dawei SEZ, in close collaboration with Myanmar, providing concrete commitment to the project

Source: NESDB, Roland Berger

Questions and Answers

16

Back Up

17

Incentives & Privileges offered in the SEZs

SMEs Revise condition for SME’s investment in SEZs by BOI

Customs Revise condition for establishment of bonded warehouse and duty free zone in the SEZs

by Customs Department

Ministry of

Finance Reduce taxes from 20% to 10% for 10 accounting periods*

* for projects that are not include in BOI’s investment promotion list

BOI Offer up to 8 year-tax holiday* with other privileges

including permission to employ foreign unskilled workers

* 13 target activities will get 8 year tax holiday, others will get +3


18

Target Activities Tak

(13)

Sa Kaeo

(12)

Trat

(4)

Muk

dahan

(5)

Song

khla

(6)

Nong

Khai

(5)

Chiang

Rai

(10)

Kanchan

aburi

(13)

Nakhon

Phanom

(13)

Nara

thiwat

1 Agro-industry, fishery industry, and related

activities

All

eligible

activities

list

in the

Announc

ement

of BOI

no.

2/2557

2 Ceramic products manufacturing

3 Textile and garment industries, and

manufacture of leather products

4 Manufacture of furniture or parts

5 Manufacture of gems and jewelry or parts

6 Manufacture of medical devices or parts

7 Manufacture of engine and vehicle parts, and

manufacture of machinery, equipment, and

parts

8 Electronics and electrical appliances

industries

9 Manufacture of plastic products

10 Manufacture of Medicine

11 Logistics

12 Industrial zones / industrial estates

13 Tourism promotion service and activities to

support tourism

13 Target Activities by each SEZ

regional integration through dawei development project€¦ · 4 dawei sez strategic location: new...

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