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Myanmar to Cut Down Kyaukphyu Cost to Avoid Debt Trap

Deputy Minister for the Ministry of Commerce, Aung Htoo said, “Investment in Kyaukphyu Special Economic Zone will be reduced from over $7 billion to $1 from $ 2 billion.

” He announced the amount of investment that would be reduced because of the concerns that Myanmar could be taking on too much debt to fund it. “The investment cost of Kyaukphyu SEZ is more than $7 billion. But it would be implemented only when establishing deep sea port is successful. It would be implemented in parts with the investment cost between $1 and $2 billion. If it seems economical, it will be expanded dramatically,” said Aung Htoo. The plan to reduce the cost of Kyaukphyu SEZ, including the proposed deep sea port will help reduce its external debt load according to London-headquartered research firm BMI Research. BMI Research said in its latest report that Myanmar’s move to downsize the scale of Kyaukphyu SEZ is positive for debt and growth sustainability and in line with the government’s intention of diversifying its foreign policy and reducing its reliance on Chinese investment.”

The proposed Kyaukphyu SEZ, located in Rakhine state, consists of an industrial park and a deep sea port. In 2015, a CITIC-led consortium won the bid to develop it. The ownership ratio of Myanmar and CITIC-led consortium is 70:30.