Myanmar, Thailand to upgrade road from border to Dawei economic zone

06, Nov. 2018

YANGON, NNA – Myanmar and Thailand have agreed to pursue an upgrade of the trunk road from the Thai border to the Dawei Special Economic Zone, in hopes of revising a shelved plan to develop Myanmar’s southern port city, allowing easy access to the Indian Ocean for Thai exports.

The two governments signed a memorandum of understanding last Thursday to conduct an eight-month survey on upgrading the existing road to a two-lane highway, which will be partly financed by Thailand, according to local press reports.

An improved road link between the two countries is crucial for smooth transport and SEZ development.

The Bangkok-Dawei route will bypass the Strait of Malacca, the main shipping channel between the Indian Ocean and the Pacific Ocean, making shipment from Thailand to the Andaman Sea three days faster.

The section of the road in Myanmar remains unsurfaced, according to a March 2018 report by the Japan External Trade Organization.

An upgraded route will give Japanese factories in Thailand easier access to the Indian Ocean and improve shipment.

“Myanmar has big potential for manufacturers,” Masao Suematsu, chief operations officer at Denso International Asia Co., a unit of Japanese auto parts giant Denso Corp., told a Tokyo seminar last month. “But bumpy roads in the country mean we can’t guarantee the quality of our products.”

He added that large ships would be able to anchor in the deep-water port at the Dawei SEZ.

Italian-Thai Development Public Co. agreed with Myanmar’s military junta in 1996 to develop the SEZ, but the plan stalled in the wake of the Asian financial crisis the following year.

In 2008, Myanmar and Thailand signed a memorandum of understanding to resume the SEZ development project.

In 2013, the two governments set up a body to initiate the project, and in 2016 the Japanese government injected capital into the entity, the JETRO report said.

In March this year, Myanmar’s union parliament approved a 4.5 billion baht ($137 million) soft loan from Bangkok to finance the project, according to local press reports.