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More Foreign Investments Needed in Yangon New City Development Project

There are still some arguments that Yangon regional government can complete New Yangon City while there are many problems of old Yangon city to be solved. People living in old Yangon are currently facing these problems such as high population density, traffic congestions, poor water distribution, power shortages and unemployment. Many are concerned that the new projects would cannibalize funds and resources that could be put to better use in the old city. Actually, Yangon chief minister is attempting to build South West new Yangon city with an objectives of reducing the heavy traffic jams and high population density, creating a second residential place and opportunities for citizens and at the same time reducing the problems of the old city.

Yangon chief minister, Phyo Min Thein said, “The regional government will take responsibility for the project in order to reduce red tape. West of Yangon River is less developed, we will strive to develop it with this project. We will industrialize the area and create job opportunities. The main objective of the project is to provide around two million jobs”. The chief minister and his cabinet has made the creation of two million jobs as the highest aspiration of building this new Yangon city. It is the responsibility of the government to make sure that people have opportunities to improve their living standards, to get tremendous social and economic benefits and escape from poverty through reaching this objective. To reach this goal, many basic infrastructure needs to be developed. Phyo Min Thein said during and August 24 press conference detailing his government’s plans for the coming quarters, “Yangon must be developed further to free up space for new industrial zones and residences, which will draw more foreign investors to the city. The new projects will help accommodate the rising number of migrant workers from other states and regions. It will also help alleviate chronic traffic congestion and problems with squatters, which are big problems in the existing city of Yangon.” He added, “When foreign investors come to Yangon, they are always looking for land or space to set up their operations. In Yangon, we have not much land to offer them as most of the lots are already occupied or too expensive. We are trying to overcome this situation by developing new industrial zones which we can offer to foreign investors when we invite them to invest in 2018-2019.”

Yangon chief minister launched the New Yangon Development Company (NYDC) in March 31, 2018 with an objective of creating economic growth, homes and jobs via the development of land to the west of Yangon River. This city will cover an area twice the size of Singapore upon its ultimate completion. This company was incorporated under the Special Company Act and is wholly-owned by the Yangon regional government. The new city will include the construction of five village townships, two bridges, artery roads, industrial estate, power plant, transmission and distributions facilities as well as fresh water supply and wastewater treatment plants. Yangon chief minister said,” Building a strong industrial base will create jobs that will have trickle-down benefits for other sectors and over time benefit families and the country. The new Yangon city is expected to create two million jobs, support local businesses and attract international companies. The project will also see the development of world-class sustainable and reliable infrastructure and include integrated and affordable living for all segments of the community.”

The new Yangon city is envisioned to be a safe, smart and clean city that will serve as an example of efficiency, integrity and accountability. The development for new Yangon city will be primarily based on a Public-Private Partnership model. The private sector will play a major role with equity investments. NYDC is managed by board of directors, consisting of government ministers and independent directors of international stature to ensure that good governance and best

practices are applied in accordance with international standards.

Singapore’s former foreign minister George Yeo, an independent director in NYDC said,” the city needs much better infrastructure. Like Shanghai and Suzhou, new space has to be opened up so that the old city can be refurbished and renewed.” Serge Pun, vice chairman and CEO of NYDC said, “The social and economic benefits from the jobs created will be manifold. Therefore, we look forward to working closely with the government on issues and policies related to land management, labour, education, government administration procedures and all related regulations. We also look forward to working hand in hand with private sector investors and partners.”

While at least $1.5 billion would be needed to fulfil this project, the regional government will provide capital of just $7 million, according to The Global New Light of Myanmar. Phyo Min Thein said that the improvement and promotion of the country’s manufacturing sector is one of the key focus of NYDC. The manufacturing sector is key to creating a large number of jobs in a short time as it needs a large number of workers. The new Yangon city creates a foundation to attract manufacturing businesses to invest in the new city.

On May 2, 2018, Minister of Electricity, Industry, Transport and Communication and Chairperson of NYDC, Nilar Kyaw signed a framework agreement with Hong Kong-listed company, China C o m m u n i c a t i o n s C o n s t r u c t i o n Company (CCCC), for the preparation and submission of a detailed project proposal to provide infrastructure works related to the first phase of the development of new Yangon city. The NYDC Challenge is a model adopted and modified from the global model of Swiss Challenge; a model that lays the foundation for fair competition, efficiency and transparency.

The NYDC has invited third parties – local and foreign entrepreneurs – to invest in the urban city extension project with new satellite townships. Yangon regional government has attempted to attract more foreign direct investment by helping to resolve legal issues related to land use that are commonly faced by investors. Therefore, there are opportunities for foreign firms that have expertise, experience and financial capabilities to invest in construction, power supply, industrial estate development, real estate development and water treatment system.

For the compensation for landowners in the project area, regional government gave them to choose between a onetime payout of 10 million Kyats an acre and land in the new city project. If they choose the latter, they will receive 20 percent of what was acquired from them. Most farmers prefer to get 20 percent of land in the project area. They don’t want to take compensation in cash because they expect to make more money selling the land compensation when the project finishes. Actually the compensation is fairer than when former Yangon chief minister, Myint Swe tried to implement the project.