Located between a country that has become synonymous for export-led economic growth and a region that is now attempting to follow their lead, Myanmar finds itself in a prime position to transport the produce of the region’s factories all over the world. Exports, of course, require efficient and high-capacity ports, especially those that can handle modern, massive shipping liners with relative ease. The recipe is in the name.
Any list of Asia’s top ports resembles a who’s who of Asian Tiger economies. Singapore, Shanghai (China), Kaohsiung (Taiwan), Hong Kong, Tokyo (Japan), Busan (Republic of Korea), and Kelang (Malaysia) have all proved to be invaluable engines to their respective economies’ growth. As the world trends ever more towards increased global trade and shorter production cycles, the efficiency of ports can be the deciding factor in whether or not a venture is economical. It can also ensure livelihoods by enticing foreign capital to stay, even in the face of rising incomes. This is one reason that Chinese manufacturing continues to flourish despite galloping wage increases. Notably absent from these lists are the traditionally silted and poorly maintained ports in South Asia.
This seems primed to change, however. The changing dynamics of the region have placed considerable momentum behind regional cooperation and injected strategic as well as economic logic to quick development of the relatively nonexistent shipping routes in the Bay of Bengal and Andaman Sea. For China, investment in Myanmar’s port infrastructure helps support two key policy priorities. It allows China to alleviate its “Strait of Malacca problem” by providing an alternative route to deliver physical materials that avoid the famous choke point. Any such investment would in turn require large investments in China’s western provinces help bring the country’s economic miracle inland. Thailand, likewise, is seeking to build regional ties with a fellow ASEAN member and give Bangkok easy access to the Tenasserim coast to drastically cut shipping times for westbound goods.
The relative success of these projects thus far has, unsurprisingly, depended on the incentives not of the foreigners, but of Myanmar itself. Located much closer to Mynamar’s economic epicenter, The Shwe pipeline connecting the port of Kyaukphyu and Kunming in China recently began delivering natural gas, despite persistent concerns about the human rights violations and the environmental consequences of the project. So far the government has exercised more caution in developing an accompanying SEZ, but it appears that it will ultimately be built regardless of local’s concerns. Thailand’s proposed $50 billion dollar development project to connect Bangkok to the sleepy fishing village of Dawei, in contrast, seems stalled indefinitely due to feasibility and financial concerns. Originally the brainchild of long-exiled former prime minister Thaksin Shinawatra, investors have shown little interest after the government of Myanmar refused to build a coal-fired power plant in the region due, strangely, to environmental concerns. More likely this was just an opportunistic excuse to use the failing project to seem balanced on environmental issues, especially since most of the electricity would have gone to Thailand.
For now, it seems that any port development will have to be much more measured and make sense for all parties. While not on the scale of any of Asia’s top ports, the approaching launch of a Japanese-funded SEZ and capacity improvements at the deep sea riverine port at Thilawa near Yangon is a step in the right direction. Japanese firms have quickly established themselves as Myanmar’s most eager investors, following their government’s investment in the port and relocating some forms of basic production there. Although nobody expects another Shanghai yet, Myanmar’s unique confluence of factors and enormous coastline make the logic of port investment almost irresistible.