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Economy

Yangon builds bridges to its future as megacity

South Korea, China and Japan glad to invest as the West turns away

A rendering of the Dala Bridge, which will connect the town to Yangon, Myanmar's largest city. (Photo courtesy of Myanmar's Ministry of Construction)

YANGON/SEOUL/HANOI -- As Yangon pushes out in all directions on its way to becoming Myanmar's first megacity, East Asian countries are snapping up the opportunity to build bridges, industrial parks and other infrastructure in its long-neglected surroundings.

"Myanmar is developing its infrastructure with the help of our neighbors. One example with South Korea is the Dala Bridge," Minister of Construction Han Zaw said at the groundbreaking ceremony for the highly anticipated project on Monday. State Counselor and de facto leader Aung San Suu Kyi also attended the event, where she pressed the button to turn on machinery.

Also called the Myanmar-Korea Friendship Bridge, the 1.8-km-long, 49-meter-tall structure will connect central Yangon across the city's namesake river to the Dala township to its south. It is expected to be completed in three to four years. South Korean conglomerate GS Group will serve as the main contractor, with local construction company Shwe Taung Group as a subcontractor.

The South Korean government will fund about 80% of the project's $168 million budget, which also covers add-ons like new lighting and repairs on nearby roads, through official development assistance loans. But the Myanmar Port Authority is demanding certain changes to the plan, and total costs could end up topping $200 million.

"We've been dreaming of the bridge for a long time," said a 32-year-old woman who runs a restaurant near the site.

While modern offices and stores have shot up across Yangon since the military junta ceded control to a civilian government in 2011, Dala has been held back by the river separating it from the big city. Many residents now take a 10-minute ride on small, wooden boats to Yangon to work as day laborers. There is a bridge further upstream, but that route takes at least an hour and a half each way.

"Some of my students go work in Yangon," a 59-year-old public school teacher said. "Some have even died when boats capsized in bad weather. A bridge will make it safe to cross the river."

Many of Dala's residents take small wooden boats like this one to cross the river into Yangon. (Photo by Yuichi Nitta)

South Korean players also are likely to take the lead in developing areas near the bridge. One company has already signed a memorandum of understanding with the Yangon regional government to build an industrial park in Dala. Seoul is also involved in the Korea-Myanmar Economic Cooperation Industrial Complex in the north of the country, part of its so-called New Southern Policy to boost infrastructure investment in Myanmar and India.

"Korea will increase ODA to double in the next five years to $1 billion," said Kim Hyun-chul, a senior economic adviser and chairman to the Presidential Committee on New Southern Policy who attended Monday's ceremony.

Yangon's population has surged from 3.55 million in 2000 to 4.9 million in 2016, according to the United Nations. The city only continues to grow with the sudden influx of foreign investment, and the government expects its population to top 10 million in 2040. It has been spreading mostly northward, where there are no rivers that act as barriers to expansion, but it urgently needs to develop previously neglected districts.

Meanwhile, in the southeast of the city, the Thilawa Special Economic Zone opened in 2015 with Japanese support. More than 100 companies now operate there. Japan has also provided yen-denominated loans to replace two nearby bridges, expanding the number of lanes from two to four in order to boost capacity by 70%.

The first new bridge opened in August. Construction on the second, which is expected to cost a total of 35.5 billion yen ($319 million), will start in February.

China is helping Yangon expand westward. The regional government announced in March that it wants to develop 80 sq. km across the Yangon river from the city through corporate investment, not intergovernmental loans. State-run China Communications Construction has expressed interest in the project, which includes a new power plant, water treatment facility, industrial park and two bridges, at a likely total of $1.5 billion.

No final decisions have been made, but the Chinese company is expected to get the contract. The project is also part of the China-Myanmar Economic Corridor, an infrastructure initiative of the two governments.

Many Western companies have shied away from Myanmar since hundreds of thousands of its Rohingya Muslim minority fled the country to escape persecution. But Japan and China are taking a different approach.

"I don't think that stopping economic cooperation will help solve the problem," a Japanese diplomat said. Tokyo has kept up its historic friendship with Myanmar, especially as China extends its influence in the country, which it considers a key piece of its greater Belt and Road initiative.

Yangon is not the only city experiencing a building boom. Many of Southeast Asia's big cities are located along rivers, and countries, particularly those with less developed economies, are considering new bridges and other major projects.

In the Cambodian capital of Phnom Penh, Japan-backed repairs at the Chroy Changwar Bridge are slated for completion in 2019. This is expected to help alleviate growing traffic at a different bridge built with Chinese support in 2014. The 2.8-km Binh Khanh Bridge is to be completed in Vietnam's Ho Chi Minh City in 2020.

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