Property developers have warned of lay-offs and cut pay after the Yangon authorities brought a halt to work on many of the city’s mushrooming tower blocks in an effort to tackle planning-law breaches, safety problems and corruption.
The move has sparked debate over whether the government’s good intentions risk being undermined by lack of process, consultation or consistency. It comes amid wider corporate anxiety as executives accustomed to years of dealing with a military-backed government wait to learn what lies in store under the administration headed by Aung San Suu Kyi’s National League for Democracy that was installed almost three months ago.
“We want to hear the new economic policy,” said Sai Sam Htun, chairman of Loi Hein, a drinks company. “What do they want to do? Where are they going?”
The clampdown on high-rise construction pending a review of the sector is a rare check on development in Yangon since the formal end of almost half a century of military rule in 2011. New shopping malls, offices and apartment blocks have sprung up but so have fears about construction standards and the destruction of the city’s heritage buildings and atmospheric views.
Naming Group, a family-owned construction business, said the building ban imposed by the Yangon City Development Committee affected a third of its high-rise projects, representing well over $100m of investment. At an office and residential tower being built by the company near the city’s East Race Course, there was little activity on a recent morning apart from a handyman sweeping away monsoon rain and a couple of workers piling rubble.
The company said it had temporarily relocated four-fifths of the site’s 150 workers to training or other projects. Other property businesses are reported to have stopped paying employees, with some giving them only rice and oil instead.
“This affects our daily lives and livelihoods,” said Aung Myo Win, a Naing Group foreman with teeth stained red from chewing betel nut. “I have to manage 40 or 50 people so I am also worried about them.”
Zaw Naing Oo, Naing Group’s chairman, says that while the company understands the authorities’s intentions, it is unhappy because it had already obtained all necessary permits and had been given no indication of the process or timescale of the official review.
“The Yangon City Development Committee don’t have a plan, they don’t have a procedure, they don’t have a policy, he said. “It’s a big problem.”
Other industry insiders suggest the rules are being applied arbitrarily. Some companies who were ordered to stop work have privately done deals with the authorities to continue, said one architectural consultant who asked not to be named.
Close to the Naing project there was no sign of a stoppage at Golden City, a 33-storey Singapore-Myanmar joint venture that includes a hotel and apartments. A company official who declined to be named confirmed no official order to halt had been received but denied this was because the project was being built on land formerly occupied by a building of the still-powerful military.
Neither Yangon City Development Committee nor the office of Phyo Min Thein, Yangon chief minister, responded to requests for comment. The minister has previously condemned the high-rise sector as suffering from corruption and profiteering collusion between business people and authorities.
The Yangon clampdown is part of a shift to “strict and effective” regulation under the chief minister, an ex-political prisoner. He replaced Myint Swe, a hardline retired general who is now Myanmar’s vice-president under constitutional powers still retained by the military.
The business community — both local and foreign, and particularly those that enjoyed lucrative relations with the military — are waiting to see if the Yangon clampdown heralds moves at national level. While the new central government has shown few radical economic instincts, it has refrained from courting corporate Myanmar or foreign investors as publicly as its predecessor.
Government insiders have promised a big announcement on the economy soon, while business people say the administration has already held meetings with companies in crucial sectors such as power. But observers are looking for a signal of how the government plans to strike the balance between encouraging the private sector and ridding it of past excesses.
One long-time Yangon resident says of the high-rise crackdown: “The whole thing may be so rotten that by fixing it you cause more problems.”
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