Embedded Files
Literature Review, Senior Thesis Project
Naja Steward
Read the full thesis here!
What is a Special Economic Zone?
What is a Special Economic Zone?
Special Economic Zones (SEZs) are geographic development tools used to attract foreign direct investment (FDI). SEZs are purchased by foreign firms because of their attractive incentives, which may include tax breaks, looser labor or environmental regulations, land user rights, and even sovereign power. Companies (particularly operating dirty or sometimes illegal industries) “buy in” to SEZs because they are able to produce at a higher output without strict environmental, labor, or tax standards. There are around 5400 zones globally, and the number is only rising. In Laos and Myanmar, where my study is focused, SEZs are frequently intentionally located in ethnic communities. SEZ placement echoes European colonial mechanisms of land grabbing, which destroyed local communities to establish mega-plantations to solidify power and break up local resistance.
Dynamics of Displacement
Core-Periphery Model
The Core-Periphery model helps to explain the relationship between “highly developed societies” and lagging areas. Highly developed “cores” depend on extracting the raw materials from the lagging periphery areas. The core cannot exist without the periphery, and the periphery exists in a state of impoverishment as a result of the core’s extractivism.
Democracy and Authoritarianism
Weak democracies do not always perform better than authoritarian regimes, economically speaking. Weak democracies are unstable, borrow many ideas from authoritarian iterations of governance, and do not always ensure equity in human rights protections. Democracies also frequently fail to deliver on their promises to the poor, resulting in widening policy preferences between economic classes. For Laos and Myanmar, authoritarian governance is somewhat attractive because of the proximity of China and the Asian Tigers, who have been economically successful partly because of their resistance to lobbying and other political pressures.
Weak Laws and Regulatory Chill
The authoritarian governments of Laos and Myanmar have weak environmental and SEZ laws because of their desire to open their economies to capitalism. Strong environmental and SEZ laws would prevent willing industries from investing millions or billions of dollars into developing an SEZ. Therefore, Myanmar and Laos participate in the process of “regulatory chill,” where laws are deliberately weakened to attract dirty industries that cannot operate in countries with stronger environmental and SEZ laws.
Firm Land Compensation
In Laos and Myanmar, firms buying SEZs where prior land titles are recognized must compensate displaced people. Though a simplification, firms maximize profits and minimize costs; therefore, they would settle for the lowest compensation cost. which may not be accurate to lost land and livelihoods.
6 Case Study SEZs
Kyaukphyu SEZ
Kyaukphyu SEZ
Includes 5 mega projects including oil and gas pipelines, oil terminals, and industrial parks. Has led to the drastic deforestation of mangroves on Maday Island, Myanmar (left). After development plans accelerated in 2023, the military blocked the community’s access to the town and indiscriminately arrested people.
Thilawa SEZ
Thilawa SEZ
Residents were verbally notified of their evictions two weeks before they needed to leave, or face a 30 day imprisonment.
Dawei SEZ
Dawei SEZ
Plans for a petrochemical facility and deep sea port. Prior plans for a coal power plant were canceled after successful protests. A Rand survey (right) reveals many people were not compensated for their land.
Golden Boten SEZ
Golden Boten SEZ
Casino SEZ initially closed in 2012 following reports of gambling violence, including torture and murder. Only hired Lao people who spoke Mandarin, and formerly run by a drug lord. Plans to reopen the SEZ include a “traditional Lao village.”
Golden Triangle SEZ
Golden Triangle SEZ
Casino SEZ known for prostitution, drug trafficking, animal trafficking, and human trafficking. Displaced two villages and rebuilt cheap homes that are falling apart only years later. Patrolled by private security and the Laos military. Plans for extractive industries on former agricultural land.
Savan-Seno SEZ
Savan-Seno SEZ
Former casino SEZ initially owned by Laos, now owned by a Japanese company. Graphical representations of future plans for the SEZ are on the Laos SEZ website. Plans include “Site D,” which will be a housing complex for people displaced by the development project.
Findings
Valuation: during the SEZ approval process, land, the environment, and people are systematically valued to sell to the investor. Ethnic minority bodies and their labor are “captured” at the SEZs, preventing shifting agricultural techniques, nomadism, or subsistence agriculture, which makes people dependent on the goods and services of the SEZ and its investors. Culture, community, and lifestyles are replaced by the ways of living that the investor deems fit. Destroying these types of lifestyles is important to create “productive” bodies in the industrial complex. Those who live outside of that system are not valued by the state, the investor, or the industrial complex.
Civilization: part of China’s attitude towards development in Laos and Myanmar is to promote “civilization.” China views itself as the civilized investor putting down barbaric lifestyles in the wild northern frontiers of Myanmar and Laos. In the SEZs, painted as wealthy instant cities, Chinese language, money, culture, and architecture are juxtaposed by the “underdeveloped” frontier populated by ethnic minorities. Therefore, China’s actions can be summarized as neocolonial: part of their purpose for development is to spread their own ideas about what “civilization” is and enforce it on an unwilling population. Laos and Myanmar are complicit in this process, however, because they are unwilling to demand safeguards for their citizens for fear of losing FDI, but they also participated in the genocide of their own citizens. Money is more important than demanding basic protections for their own citizens because the authoritarian governments of Laos and Myanmar have enthusiastically embraced market-oriented reforms and deliberately place SEZs where ethnic minorities live.
The Environment: under the command of “civilizing” investors turning land into capital, the environment becomes valued in the capital market. As peripheries with few environmental safeguards, SEZ investors turn the environment into a binary well for natural resource extraction and a sink for pollution. The “mega projects” frequently built in SEZs typically use the environment in a binary way, such as industrial agriculture, mining, and damming. Subjugating the environment also means the subjugation of ethnic bodies who have long lived off the land and stewarded it.
Page updated
Report abuse