Than Ei lived in the Thilawa area near Yangon for years, growing vegetables in her backyard and sending her two children to school with money from her husband’s construction job.

Then came the government order to move. Than Ei’s family was among 68 households relocated in 2013 to make way for the Thilawa Special Economic Zone (SEZ), the first such industrial area in Myanmar, about 23km (15 miles) southeast of Yangon.

Authorities said each family would get a home a few miles away, or a plot of land and money to build a house, as well as jobs in the new factories, with good wages.

But six years on, Than Ei and others who moved say their incomes are lower than before, and they have only limited access to services. Many families sold their homes and left the area after they ran out of money, Than Ei said.

“There is no land to grow vegetables or to keep chickens, and we are not close to transport or the market anymore,” Than Ei said outside her one-room home in Myaing Thar Yar village.

“My husband only got a job as a security guard two years after (the move). We had to take out a loan until then, which we are still paying off.”

For developing nations like Myanmar – which emerged from decades of economic isolation in 2011 when the military stepped back from direct control – SEZs are seen as a way to attract much-needed foreign investment and create jobs.

Authorities say Thilawa SEZ is being built according to international environmental and social safeguards, which includes getting the consent of residents and offering adequate compensation.

But for those whose lives have been uprooted by the country’s economic ambitions, the reality is different, said Mike Griffiths, a researcher at the Myanmar Social Policy and Poverty Research Group, a think tank based in Yangon.

“They not only have lower levels of income, but are more likely to have higher expenditure, higher rates of debt and lower employment rates,” he wrote in a report last year on the relocated households. “The picture is of extreme vulnerability.”

Risky Model

The model for economic growth that Myanmar and other countries in the region hope to emulate is that of China, which in the 1980s set up about half a dozen major SEZs to boost its market reforms.

Experts say SEZs have contributed significantly to China’s economic growth, with the World Bank estimating in 2015 that they accounted for nearly a quarter of the country’s GDP.

Spurred by China’s example, governments from sub-Saharan Africa to southeast Asia have adopted SEZs, but analysts say they have a mixed record of success.

“The model has passed its use-by-date, and officials have been slow to catch on,” said Charlie Thame, a professor of political science at Bangkok’s Thammasat University.

“Even from an economic point of view they are fraught with risk, mostly borne by host states.”

In poorer nations, SEZs “overwhelmingly fail to provide decent jobs or generate beneficial effects to local economies,” he said, and domestic legislation and international investment frameworks largely fail to protect those affected.

No Consultation

When completed, the Thilawa SEZ will cover some 2,400 hectares (9 sq. miles) of land. Dozens of manufacturers, largely making goods for export, are already operating there.

Thilawa is the only operational SEZ in the country, with the Dawei SEZ in the southern region of Tanintharyi on hold after some initial construction. A third SEZ is planned, with Chinese investment, in Kyauk Pyu in Rakhine state.

The site in Thilawa had been earmarked for industrial use under the junta government in 1996, but the original plans fell through.

When authorities announced the start of development for the SEZ six years ago, they said since the land already belonged to the government, villagers living on it were only eligible to be compensated for their crops.

None of the residents made to move were consulted on the economic or social impacts of the development, said Mya Hlaing, a member of the Thilawa Social Development Group, which was set up to represent the villagers.

“We were also promised training and jobs, but very few have got jobs – and even then, only as cleaners and security guards,” he told the Thomson Reuters Foundation.

A spokesman for Myanmar Japan Thilawa Development, which operates Zone 1 of the SEZ, said the land acquisition was carried out by government authorities, and that those affected had been offered several job opportunities.

Myanmar authorities did not respond to calls and e-mails seeking comment.


About 600km away in southern Myanmar, development of the Dawei SEZ has been suspended since 2013, after it sparked community protests and hit funding difficulties.

The project is a joint venture of the Thai and Myanmar governments, and includes a 140-km road to the Thai border, a port, a power plant, a reservoir and an industrial estate.

Most residents affected by the initial phase of construction refused to move into the nearly 500 homes that had been built a couple of miles away.

“We were not told what types of factories would be built or what their impact would be,” said Mar Lar, who sold some of her land in the southern Htein Gyi village but still lives in her own home.

Residents in Dawei fear construction on the stalled project will resume soon, even as a backlash against SEZs is growing.

Protests broke out in Vietnam last year over planned new SEZs.

In India, the Supreme Court has asked why land acquired for SEZs is not being used, and the Myanmar government has scaled back its Kyauk Pyu project with China over fears of a debt trap.

But back in Thilawa, the second phase of construction is about to kick off and will see the relocation of more than 800 families, said Aye Khaing Win, a community leader.

“The government says the SEZ has done many good things, but we have lost our land. We have not benefited,” he said.