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International relations

Myanmar economic zone reimagined as export hub to India

Japan hopes reworked Dawei will mean more leverage over Chinese influence

The Dawei special economic zone was originally envisioned as a home for heavy industry, but much of the land is still vacant.   © Getty Images

TOKYO -- Plans for an economic zone in southern Myanmar will be reworked by Japan into an export base to such markets as India, Nikkei has learned, in an attempt to kick-start the stalled project as China expands its economic influence in the Southeast Asian country.

The new proposal for the Dawei special economic zone being developed jointly by Japan, Myanmar and Thailand will prioritize building logistics and port facilities to turn it into a base for shipping and light industry by 2030.

Japan, Thailand and Myanmar signed an agreement on developing Dawei in 2015, with Tokyo investing in the project through the Japan Bank for International Cooperation. The original plan was to focus on heavy industry and chemical manufacturing. But much of the land in the area remains vacant, and the planned port has yet to be built.

The change in approach comes amid a massive China-funded port development project in the Kyaukphyu special economic zone, which is situated on the Indian Ocean near the Chinese border. The project includes a pipeline from China and is under the auspices of Beijing's regionwide Belt and Road infrastructure initiative.

Tokyo sees developing Dawei as an opportunity to strengthen its own influence in Southeast Asia. The city is an endpoint of the cross-border Southern Economic Corridor running from Ho Chi Minh City through Phnom Penh and Bangkok to the Indian Ocean, and as such would serve as a useful export channel.

The proposed revamp will be announced Monday at a briefing for Japanese businesses by Japan's Ministry of Economy, Trade and Industry. Representatives from Tokyo, Bangkok and Naypyitaw will begin talks on reworking the project as early as this fall.

Japan has also supported development of the Thilawa special economic zone near Yangon.

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