Tue 19 Mar 2013
Filed under: Business / Trade,Opinion
In Burma, plots of land have been leased in 27 industrial zones, and according to the official list, those who are not actually in any industrial business have leased 35 percent of this land. Therefore, Vice-President U Nyan Htun said the land would be taken back from these people. The land in these industrial zones is owned by the government. In some of the industrial zones in Rangoon, we see that the calling price for leasing the land is between 400 and 500 million kyat per acre.
Previously, how much was the leasing rate in these industrial zones? I asked this question to U Myint Soe, who is leasing the land in an industrial zone in Rangoon and is manufacturing goods.
U Myint Soe: When the government first gave permits to industrial zones, they sold it for 24 million kyat. When the rates for construction and infrastructure went up, in the end, if the government had to build the infrastructure on wild land and turn it into an industrial zone, it was leased for approximately up to 60 million kyat per acre for a 30-year grant. You can extend the 30-year grant. It’s a land-leasing grant.
Interviewer: Yes, U Myint Soe, people are seeing vacant lands with no industries even though the lease is for industries. We know that the rules and regulations state that you must have an industry on the land. What is your opinion regarding the fact that the government is going to take back the land?
U Myint Soe: If these manufacturers do not follow these rules, we can say from the legal point of view that it is not in accordance with what is stated in the lease. The land is not being used for a business, but people are seeking to take advantage of the opportunity to lease the land. As a business man, I think it is not only bad for the country but also for the business people as well.
Interviewer: So local business people like you are saying that it should not be so. Foreigners who want to come and invest in Burma are saying that the rates for leasing land there are incredibly high. Did you hear anything about that-?
U Myint Soe: Foreign investors do not like high prices to lease or to buy. These things are hindering our national development. I notice them complaining that these high prices are hindering their investment process.
Interviewer: That was U Myint Soe. We are hearing now that leasing land is creating difficulties for foreigners to come and invest in the country. Now, the government wants to take back the land from those who have the land in the industrial zones and are manipulating the market price. But many people are saying that it will not be easy to actually take the land back from them. Journalist U Sithu Aung Myint also does research related to land in Rangoon and have written articles. Yes, U Sithu, please tell us something about this.
U Sithu: In order to take an action against it — the land is owned by – if I have to choose an easy expression — those from the circle of the authorities and their families, and former generals. Since they are the majority, they are not able to handle this matter at all. This is not only for the industrial zones. These problems can also be seen in new towns that are being developed. These things started happening over ten years ago.
From what I have observed – I also have a personal experience – my personal experience is that when they said they were going to have an industrial zone at the port of Thilawa, on the side of Than Lyin, and people were selling plots of land, I went to take a look at them with my real estate agent friends. Every time when the buyers and sellers met, they would say, “Along this road, all of the plots of land are taken by this big wig. The other side is taken by that big wig.”
Interviewer: In your observation, how did they get these plots of land? Please tell us.
U Sithu: I asked around how they acquired them, and what I learned is that they received information on some plots of land ahead of time – that the authorities are going to have industrial zones or new towns in certain areas, so they went ahead of time and got them at a cheap price. Some, however, have extra cash in hand. Some have plots of land that they bought ahead of time. For some plots of land, however, it was like giving gifts during the eras of the kings; if a commander is going to create new plots of land or new industrial zones in this town, he would give land to another commander from a distance place or a military attache who is abroad or another military official. Similarly, he would get land in a different place; for instance, a commander in Mon State will get land in Shan State. This way, they have acquired many plots of land during these twenty years.
Interviewer: In Rangoon area, besides the land in the industrial zones, people have received information on the arrival of development projects. They have obtained these lands. Like we just heard, these big wigs have got a hold of a lot of land. They are asking for a very high price for them. In the current economic world of Burma, you can say that the majority of people are buying up land and asking high prices, instead of doing some business that would benefit many people. Please listen to what U Myint Soe says here.
U Myint Soe: These are the majority of people. What you said is true. If there are one hundred people doing business, 75% of them are speculating either on land or other products and commodities. I can estimate that only 25% are building businesses, trading, providing services, and manufacturing.
Interviewer: Now they are going to take an action on the land in industrial zones. But would it be easy? In reality, the former authorities and the current authorities are all involved. U Myint Soe, please tell me your view.
U Myint Soe: In my opinion, rule of law is the most important thing. The extent of the rule of law has an effect on this.
Interviewer: Journalist U Sithu Aung Myint, will this government be able to handle this issue with the rule of law that U Myint Soe mentioned?
U Sithu: It depends on whether the current government has any commitment for the economic development of the country. Our country really needs foreign investment. We are working on all kinds of law so that they would come. When land issues are involved, they really need to solve this problem well. If they do solve this problem – in the industrial zones that were mentioned just now – yes, give them time. During this period, they should bravely reclaim the land that has not been used for developing industries. I’ve never seen it [worked?] before. If you go and touch something, you would find another problem lurking there. So, it is difficult for them to work on it. However, they can do anything if they are committed – whether reclaiming the land from these industrial zones or creating new land to bring down the price of land. They can do everything. It depends on how committed they are.
Interviewer: Dear listeners, we need job opportunities in order to develop Burma’s economy. Foreign investment is one of the important things for this. Foreign investors are saying that the price to lease land is incredibly high, and it depends on whether the government is going to work for sure so that they are able to guarantee the foreign investors and say, “Here, you can lease it at a fair price.”