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2 Capitalizing the Thai-Myanmar
border By Clifford McCoy
MAE SOT, Thailand - The conflict-ridden
Thai-Myanmar border has long been associated with
drug smuggling, arms-dealing and human trafficking
and other illicit trades. Now a new investment
initiative aims to bring bilateral border trade
above ground through the establishment of
export-oriented special economic zones (SEZs) in
the two countries' hinterlands.
The two
sides agreed last month in Mandalay to finalize a
long pending agreement, which in the first phases
will open the way for
Thai
agribusinesses to cultivate millions of acres of
land tax-free in Myanmar's border areas. The
ambitious plan to turn battlefields into
marketplaces has the tacit backing of the Asian
Development Bank (ADB), but at the same time has
come under heavy criticism from rights
organizations.
The initiative is the
outgrowth of the multilateral Economic Cooperation
Strategy (ECS), which was first launched in 2003
by former Thai prime minister Thaksin Shinawatra
with the aim of increasing trade investment
between Thailand, Myanmar, Cambodia and Laos, and
has been continued by Thailand's new ruling
military junta.
Plans to construct
a formal border trade zone at the Myanmar town
of Myawaddy, directly across from the Thai town
of Mae Sot, as well as two industrial zones, one
at Pa'an in Karen state and another at Moulmein
in Mon state, have been in the planning stages
for several years and are now reportedly on course
to begin groundbreaking this year.
The
Myawaddy zone, which will be the first built, will
become Myanmar's second-largest border trade zone,
lagging only the Muse 105 Mile Border Trade Zone
in northern Shan state across from the southern
China town of Ruili. Thailand is expected to
finance nearly all of the project's construction
through grants and loans to Myanmar's government,
consistent with Thailand's aim to use the ECS as a
vehicle to establish itself as a regional donor
country.
A feasibility study, conducted by
the Industrial Estate Authority of Thailand and
Myanmar's Ministry of Industry-1, was completed
last July on the proposed Myawaddy, Pa'an and
Moulmein SEZs. The study claimed that there were
positive responses from potential Thai and Chinese
investors, although there were still outstanding
concerns holding back large-scale investments,
particularly concerning the lack of basic
infrastructure.
Both governments have a
strategic interest in developing the border areas.
One chief aim of establishing SEZs will be to
create local jobs and hence curb the massive
influx of illegal migrant workers into Thailand.
Estimates of the number of migrant Myanmar workers
in Thailand run as high as 2 million, some who
possess proper working papers, but many not. Thai
manufacturers have long tapped cheap Myanmar labor
to beat down costs, but the Thai government has
simultaneously deemed the large number of
undocumented workers as a potential security and
public health threat.
With large parts of the
border area across from Thailand's western Tak province
now under the control of the ruling State Peace
and Development Council (SPDC) or their proxy
Democratic Karen Buddhist Army (DKBA), contract
farming ventures have recently sprouted in border
areas ahead of the new agreement. The DKBA is a
breakaway faction of the still insurgent Karen
National Union and has struck a separate peace
with the military regime.
Those ventures
at first seemed to be local initiatives brokered
privately between Thai agribusinesses and ethnic
Burmese businessmen or DKBA military commanders,
but have since been formalized by the Thai and
Myanmar governments involving huge tracts of land.
A
memorandum of understanding (MoU) first signed
between the two governments in December 2005
and made operational last month will pave the way
for Thai contract farmers to manage and cultivate
more than 7 million hectares of land in
Myanmar for sugarcane, oil palm, cassava, beans
and rubber.
Also under the agreement, four
areas of Karen and Mon states are designated for
contract farming. The most northerly area consists
of 20,000 hectares across the border from Tha Song
Yang in Thailand. A second area of 40,000 hectares
is in the area of Ko Ko and Rai villages just
north of Myawaddy. A third area, also along the
border, is an area of 40,000 hectares around Waley
village across from the Thai district of Pho Pra.
Further west is the fourth area in a 200,000-hectare
triangle formed by the towns of Kawkareik, Kya In
and Kyaikdoe. The contract farms in these areas
are all overseen by the state-run Thai National
Economic and Social Development Board.
In
addition to the current MoU, Thai officials were
quoted in the Thai media as saying after the ECS
meeting in May they were working to finalize yet
another bilateral agreement on contract farming in
other undisclosed border areas. Curiously,
negotiations for another agreement come as some
Thai investors under the original deal are already
protesting about the original scheme's
implementation and taxation.
Thai
investors who invested in farms to grow maize,
mung and castor beans on 6,475 hectares of Myanmar
land across from Mae Sot, Mae Ramat and the Pho
Pra district of Tak province were allowed under
the original MoU agreement to export their
products to Thailand duty-free. However, the Thai
investors allege that tariffs have been levied by
Myanmar officials and some have threatened to pull
out of the project altogether if the taxes are not
repealed.
Forcible
evictions More controversially, land
targeted for Thai contract farms is often already
under cultivation by small-scale subsistence
farmers, many from ethnic minority groups that
have long occupied the areas. A recent report by
the Karen Human Rights Group (KHRG) detailed the
methods the SPDC has used in the past to forcibly
evict villagers from their land to clear the way
for large-scale commercial farms.
KHRG and
other rights groups claim that land is frequently
confiscated, access roads are built with the use
of forced labor and the farm projects are often
subsidized with money extorted from local
villagers. Villagers are often forced to work on
the farms and plantations for minimal or no pay,
the rights groups allege. Specifically, ethnic
Shan farmers near Muse along the Chinese border
have protested an increase in land seizures in
2006, including a 15,000-hectare area for a contract
rubber plantation.
The soon-to-be-built
SEZs and the contract farms are connected by a
third even more controversial project: the Asia
Highway. The highway is a part of a road system
first envisioned by the United Nations Economics
and Social Commission for Asia and the Pacific in
1959 that once completed will crisscross all of
Asia. The section of the highway that runs through
Myanmar's Karen and Mon states is known as Asia
Highway 1 and cuts across the
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