Special economic zones can help address skill shortage

Yoichi Kobayashi, chairman of the Japan-Mekong Business Cooperation Committee and executive vice president of ITOCHU Corporation, said that the entry of multinational companies to the three SEZs - Thilawa, Dawei, and Kyaukphyu - would play a crucial role in improving Myanmar’s human capital.

“We are very much happy to see the developments in Thilawa by the two countries, Myanmar and Japan. Not only the governments but also the private sectors from the two countries are working together to make it successful. So far, Thilawa SEZ could be the biggest [Japanese] investment,” he said.

“On the Kyaukphyu, we understand it is like a SEZ for Chinese. I do not think that Japanese companies are thinking of investing there. Dawei SEZ may be led by Thai and Japanese companies who are manufacturing in Thailand. These are Japanese investments, too. So, Dawei SEZ should be developed by cooperation among the three countries.”

To Kobayashi, implementation of Thilawa SEZ will lead to further expansion of business relations between the two nations and the wider exchange of views to accelerate the development momentum. The business people from both countries should put forth necessary recommendations to their respective governments.

Commenting on the developments of Thilawa SEZ, Kobayashi said, “For the time being, 50 per cent of Thilawa SEZ are the Japanese - 19 Japanese firms out of 38-39. But I do not know what will go on in the future. The SEZ should maintain its competitiveness. We are thinking of bigger businesses rather than family businesses. We think it important to look at here as a consuming country rather than exporting to other countries.”

“The final targeted size is 2,400 hectares. Plan A is just 400 hectares. So another 2,000 (hectares) should be developed. For the time being, even out of 400 hectares, the first stage is just more than 200 [hectares]. Now, about 60 per cent has already confirmed. So, Thilawa SEZ may be developed step by step,” he added.

Khine Khine Nwe, joint secretary general of the Union of Myanmar Federation of Chambers of Commerce and Industry shared a similar view.

“Lack of skilled workers and technicians are a serious obstacle for local firms. We need a lot of vocational trainings and capacity building programmes. Skill-training programmes are needed to address human resource requirements of our industrial sectors,” she said.

According to Khine Khine Nwe, what Myanmar expects most from foreign investors in SEZs are technology transfer, sharing of expertise, and job opportunities for local people.

Currently, investors in the Special Economic Zones in Myanmar are not under the ambit of the Foreign Investment Law, but under the Special Economic Zone Law, as they need to get the investment permit from the management committee of the respective SEZs where they invest.

Investors do not need to contact any other government ministries, departments or agencies. All required licences, permits, and approvals can be acquired from the one-stop-service-centre located inside the SEZ.

Those who want to be registered as Free Zone investors need to export at least 75 per cent of the production. They are eligible to enjoy seven-year tax holidays. The firms such as logistics that support export-oriented manufacturers can also be free zone companies. Domestic-oriented manufacturing firms are regarded as promotion zone companies and they are eligible to enjoy five-year tax holidays.