Chronic power shortages hampering economic development in Myanmar

Five years after the devastation of Cyclone Nargis, the Hlaing Thar Yar Industrial Zone on the outskirts of Yangon in Myanmar is showing signs of a boom, with new factories sprouting every month behind its fences.

To many visitors, the park - the second largest in the country, occupying 567 hectares and employing more than 58,000 people - is the epitome of a new Myanmar and the nation's potential for rapid growth. But talk to local industrialists, however, and the conversation inevitably moves to bitter complaints about chronic power shortages.

The electricity supply, not the natural disaster that hit the park and much of the country in 2008, seems to pose the biggest challenge to a dream of prosperity.

"The biggest headache for manufacturers is the lack of electricity," says Kyaw Zin Htet, marketing manager for footwear maker Reva. "We have to rely on our own diesel generator [for power] every day from 12pm to 3pm, Monday to Saturday."

John Lee, the deputy secretary general of the Chinese Enterprises Chamber in Myanmar, says the cost to companies of generating their own electricity could be five to 10 times that of taking power from the grid.

"The price of electricity is protected by the government but the price of diesel is subject to the international price," Lee says. The chamber, representing investors from China, has over 100 members, mostly in the mining, energy, clothing, medicine, food processing and light industries. The number could be higher but some potential investors are put off by the power problems.