FEW TAKERS FOR LAND IN BURMA'S NEW CAPITAL

UNCLAS SECTION 01 OF 02 RANGOON 001240

SIPDIS

STATE FOR EAP/MLS
TREASURY FOR OASIA:AJEWELL

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: ECON PGOV BM
SUBJECT: FEW TAKERS FOR LAND IN BURMA'S NEW CAPITAL

REF: A) 2005 RANGOON 1421

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1. (SBU) Summary: On August 20, the Naypyitaw City
Development Committee (NCDC) announced that it will accept
applications to buy residential plots and small business
sites in Burma's new capital. By tightly regulating private
development in the new capital, the GOB aims to provide
services to the unhappy civil servants forced to live there,
while at the same time keeping their new administrative
center small and controllable. Our contacts indicate little
interest in pursuing commercial opportunities in the new
capital due to the restrictive conditions and uncertain
future. End summary.

Businesses Wanted
--------------

2. (U) On August 20, in full-page advertisements in Burmese
language government newspapers, the Naypyitaw City
Development Committee invited applications to buy real
estate in the new capital. The NCDC offer includes 8,000
new residential plots of land, half located north of the
Naypyitaw government area on the way to Taung Nyo, and half
in the south beside the road to Lei Way. Other real estate
options include land allocated for small businesses, a
shopping complex, warehouses, car workshops and a bus
terminal. The NCDC stated that actual sales prices would
not be determined until the final week of August.


3. (SBU) The thousands of civil servants forced to move to
Naypyitaw without their families this year would probably
welcome the addition of any new services in the capital.
Cin Suan Mang, a retail trader who travels to Naypyitaw
regularly for import/export permits told us that, with few
existing restaurants, teashops or other diversions, and
great distances between ministries and housing areas,
government workers can only chat with neighbors near their
homes or drink and gamble after work. Those who can afford
it take the nine-hour train ride back to Rangoon as often as
possible.

Caveat Emptor
--------------

4. (SBU) Naypyitaw land comes with many strings attached.
Buyers must choose a building design pre-determined by the
authorities, cannot resell for ten years, and can only open
businesses on an approved list (restaurants, pharmacies,
barbershops, beauty parlors, tailors, preschools, and
appliance shops). Buyers must begin building within three
months of settlement, and finish construction within one
year. Buyers cannot lease their business, and all
businesses "must operate successfully." If owners do not
meet these conditions, the authorities will confiscate their
property without compensation. Applicants must also: be
Burmese citizens; comply with all local laws; have never
violated Burma's anti-drug and money laundering laws; and
have no contact with "illegal organizations" or those who
break the law. The information office of the NCDC declined
to explain the restrictions, but banning those with ties to
"illegal organizations" would keep out of Naypyitaw those
connected to political parties and organizations not part of
the regime's "legal fold."


5. (SBU) The announcement also described the government's
plan to construct community buildings in the new area,
including schools, markets, fire and police stations, health
clinics, sports grounds, and parks. The NCDC promised that
concrete roads, stable power supplies and telephone lines,
and water and drainage systems would service all new
facilities. Ma Moe, a real estate agent who frequently
visits Naypyitaw, told us that sales would be sluggish
because most people doubt the GOB's commitment to supply
modern infrastructure beyond their own compounds.


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6. (SBU) Tin Maung Win, an engineer, told us that it would
be impossible to start construction within the prescribed
three-month window. He also shared that a high-level GOB
official close to him warned against investing in Naypyitaw
because of the tight restrictions. Many traders regularly
visit Naypyitaw to conduct business with the government, but
few intend to establish a permanent base there. Others we
contacted, including tourism sector manager Kyaw Ni Khin,
hotelier Nay Zin Latt and journalist Min Naing Soe, agreed
that the Naypyitaw opportunity is unattractive because of
the government's unreasonable conditions and uncertainty
about the new capital's future.


7. (SBU) Comment: The GOB's strict sales terms are intended
to dissuade speculators yet facilitate the development of a
controllable, compliant commercial presence in the new
capital. With most civil servants forcibly relocated to the
new capital, there is a captive market for shops and
services. We do not expect many grand openings in the near
future since most business people see the regulations and
risks as still outweighing any potential rewards. End
comment.

VILLAROSA