The Dawei Special Economic Zone has fuelled high hopes for a development boom at the Tanintharyi Region border post of Htee Khee, but the main business in the area is casinos at nearby jungle resorts.
By KYAW LIN HTOON | FRONTIER
THE ROAD trip from Dawei to Htee Khee, on the border with Thailand, can be an uncomfortable experience. Although the 54 kilometres from the Tanintharyi Region capital to the town of Myitta is tarred, the remaining 101km to Htee Khee is rough and bumpy, and the journey takes about six hours during rainy season.
At about the half-way mark, where the road runs beside the Tanintharyi River, the Karen National Union has a checkpoint at which all vehicles are stopped and required to pay a fee of THB100 (about K4,885) for every traveller.
Despite the shoddy infrastructure and the presence of armed groups like the KNU, many have high hopes for the crossing, and the business opportunities it may bring. Myanmar recently approved a loan from Thailand to upgrade the highway from the border to a long-delayed Special Economic Zone at Dawei. The Myanmar government was reported in July to be negotiating with the concessionaires, including a large Thai construction company, Italian-Thai Development, to start work on the initial phase of the US$8 billion project, which would include a deep-sea port.
Htee Khee, which was the headquarters of the KNU’s Brigade 4 until it relocated to a jungle site in 2012, has already started to attract opportunity seekers from other parts of the country who hope to cash in on the expected boom. For now though it remains a relatively quiet outpost, with little visible trade in either direction. The main business in the area appears to be casinos at nearby jungle resorts.
Visitors to Htee Khee are greeted by food stalls, shops and other small businesses, most of which are run by residents of Dawei, or by local ethnic Karen. That said, Mon, Bamar and even Pa-O shopkeepers have also established businesses there.
A noticeable difference between Htee Khee and other border gates in Myanmar is a paucity of big trucks, though that is likely to change if and when work begins on the SEZ. Most of the vehicles heading to Htee Khee from the Myanmar side are carrying jobseekers heading to Thailand; most of the trucks from the Thai side are delivering fruit, vegetables and fishing equipment.
Htee Khee’s development potential has also attracted investors from Dawei and other Tanintharyi Region townships. Thais with an interest in history are frequent visitors to Htee Khee as they head to Dawei and other nearby locations because the region was twice ruled by Siamese kingdoms, from 1287 to 1594 and from 1740 to about 1760.
For those on the Myanmar side of the border, huge hopes rest on the Dawei SEZ going ahead. Work on the project began more than six years ago but was suspended soon after amid financing difficulties. Plans to resume work, possibly with Japanese support, were announced in August 2015, but negotiations have proceeded slowly.
Urban and rural residents, the KNU, and businesspeople in Dawei all told Frontier that they want the government to accelerate development plans, including upgrading the road to Htee Khee. The KNU wants faster approval for an industrial zone it has proposed near the border, businesspeople want the road upgrade accelerated, and many residents want work to start on the SEZ and other infrastructure projects to provide jobs so they don’t have to become migrant workers in Thailand.
Padoh Saw Ehna, secretary of the KNU’s Mergui-Tavoy (Myeik-Dawei) District, said final approval for the industrial zone would be beneficial for the peace process.
The government should help the KNU as they work to build peace together, Saw Ehna told Frontier.
“We are working on the development of this area to help raise the living standards of people who have suffered the effects of war for seven decades,” he said.
Curious trade jump
Frontier visited Htee Khee to investigate a huge reported jump in exports. Ministry of Commerce figures show that in the first nine months of the 2018-19 fiscal year Myanmar exported $1.7 billion of goods through Htee Khee, up from just $3.2 million in the corresponding period the previous year. Imports for the same period were $117.4 million in 2017-18 and $142.1 for 2018-19.
The increase in exports at Htee Khee appears to have compensated for a significant decline at the Muse crossing on the border with China, which saw a $800 million drop in trade in the same period due to a crackdown on imports of agricultural products on the Chinese side.
U Ye Htut Naing, chair of the Tanintharyi Region Chamber of Commerce and Industry, also questioned the border gate figures. He said Htee Khee was officially opened in May 2013, the same time as another gate further south, at Maw Taung, which connects with Thailand’s Prachuab Khiri Khan Province.
“I do not clearly understand why it has jumped like because we don’t export much through that gate. Most of the time, the people in this region use that gate for importing, not for exporting,” Ye Htut Naing told Frontier.
This was confirmed by Frontier, which noticed that the checkpoint for imports at Htee Khee was operating but the export gate was deserted.
At the import checkpoint, public servants were relaxing to the sound of Myanmar hip-hop. An official said that because they had so little traffic to inspect, they were trying to make themselves comfortable after being transferred far from their homes.
One of the officials had an explanation for the big jump in trade volumes, however.
“Currently, the exports through this gate are mainly small amounts of products such as fish, crabs, tin concentrate, coconuts and bamboo,” said U Aung Zaw, the head of the border gate post, who was transferred three months earlier from Nay Pyi Taw.
“However, since October 2018, the Ministry of Commerce has added to the Htee Khee trade statistics the gas exported from the Yadana, Zawtika and Yetagun fields; that’s why the trade volume has jumped,” he told Frontier.
The gas is exported through pipelines that make landfall at Kanbauk in Tanintharyi Region and run north of Htee Khee into Thailand.
Aung Zaw did he not know why it had been decided to include gas exports in the trade figures for Htee Khee. Neither did ministry officials in Nay Pyi Taw, who asked not to be named. They suggested the order was issued by higher level officials.
Htee Khee might seem an unlikely venue for gambling but there have been reports of casinos operating at resorts in the area that the KNU’s Mergui-Tavoy District runs. The reports, and allegations that some government officials had overcharged tolls on the road between Htee Khee and Dawei, were investigated by the Dawei District General Administration Department in June 2018.
The overcharging dated to when there were some government checkpoints along the road, and punitive action was reported to have been taken against some officials, but claims about casinos at resorts could not be substantiated, partly because they are in territory under KNU control. However, it is widely understood, according to information provided to Frontier, that at least three of the resorts have casinos.
During Frontier’s 30-minute interview with the KNU’s Saw Ehna, he spoke with extreme care when asked about allegations of casinos at the group’s jungle resorts. Although he did not deny the existence of casinos, he said some of them might be operated by Thai companies, which he declined to name.
Saw Ehna also said that Myanmar citizens were not allowed to enter the casinos, in line with KNU policy. As a result, Frontier was not able to visit the resorts to confirm the reports.
But Frontier did have the opportunity to cross to the Thai side of the border to see where travellers stay at motels before they are transported by vans to the resorts on Myanmar territory. The vans all appeared to be the same – Thai-licensed Toyota Hiaces with blue stickers on the windscreens – suggesting that they may all be operated by the same company.
Gambling is illegal in Thailand but casinos have been built in border areas, including the border with Cambodia, to cater for huge numbers of Thai gamblers.
A website in the United States called casinosavenue.com that promotes gambling establishments, provides details of casinos in Cambodia and Myanmar, including those in border areas. It lists casinos at Tachilek, Myawaddy and on an island off Kawthaung, at the southern tip of Tanintharyi, but there is no mention of any casinos near Htee Khee.
U Myint Swe, chair of the Htee Khee Border Trading Association (Temporary), said he was unsure if there are casinos at the resorts. He said most of the visitors to the resorts are Thai but they also include Japanese and South Koreans.
Myint Swe is also a director of the Power Nine company, which is based at the Kachin State capital, Myitkyina, and also the Kanpiketee border gate on the Kachin-China border. Power Nine has been involved in border trade for more than 20 years through its fleet of trucks, and its activities also include duty clearance services.
Myint Swe said one of the reasons he established operations in Htee Khee was to be close to his children, who are attending school or working over the border in Thailand’s Kanchanaburi Province. He said he is confident that once the road between Dawei and Htee Khee is improved, the Tanintharyi capital will benefit from an increase in tourists from Thailand, regardless of whether work resumes on the Dawei SEZ.
“On Fridays, middle-class people from Bangkok and Kanchanaburi like to come to the border and cross into Myanmar. It’s an effective way for them to remove stress,” he said.
In March, Myanmar’s national legislature, the Pyidaungsu Hluttaw, approved a loan of THB4.5 billion (almost K220 billion, $146 million) from Thailand to upgrade the Dawei-Htee Khee road. Both sides have given preliminary agreement to begin the project in October and complete it within 30 months.
TCCI chair Ye Htut Naing said he has big expectations that the road upgrade and the KNU’s industrial zone plan will be a boost for development at Htee Khee.
“The road and industrial zone projects provide the promise of many new job opportunities in Myanmar for workers who might otherwise have to find work in Thailand,” he said. “No one wants to live and work away from their home and family.”
Saw Ehna said the KNU is seeking approval from the regional government to establish the industrial zone on 6,676 acres (about 2,700 ha) at Htee Khee. Saw Ehna is an executive of the zone’s developer, Mae Tha Mee Khee Region Industrial Co Ltd, which was formed from the merger of two KNU companies and registered with the Directorate of Investment and Company Administration in 2016.
He said the project involves establishing a general industrial zone, a residential zone and a logistics zone.
The project appears to have been approved by a temporary commission formed by the Tanintharyi Region Hluttaw in January, however business sources close to Mae Tha Mee Khee Region Industrial say the Ministry of Foreign Affairs is considering whether to allow the zone to purchase power from the Thai side, which would be crucial for the viability of the project.
One of the reasons why the KNU backs the industrial zone is to create job opportunities for people living in the area and Saw Ehna uses a similar argument to support the resorts, though he chooses his words carefully.
“Speaking honestly, if there were no resorts at Htee Khee, the residents of nearby villages would have no job opportunities, except on the Thai side of the border,” he said.
“For now, we have to support the area through these resorts and our plan for the industrial zone and we look forward to being helped by the government.”