Shwegu can be visited conveniently as a stopover when travelling by boat from Katha to Bhamo.
It is an interesting town in its own right with a lovely monastery and many pottery making workshops, but the main reason for a stopover is the island Kyundaw in the middle of the Ayeyrwaddy. There are more than 5,000 pagodas on the island built around the central spire Shwe Baw Kyune. Many are in good shape but many are in ruins. Yet even those old ones have some lovely statues of Buddha in the central niches. It is an incredible sight to walk through the sea of pagodas (barefooted even where there are no footpaths).
The only guesthouse for foreigners in Shwegu is Mya Myint Mo. A few minutes by horse cart from the harbour.
There is no problem to hire a boat to get to Kyundaw island BUT the boatman will not take you there until he gets OK from the local immigration office. We spent more than an hour negotiating with them. First two local policemen came (have a copy of your passport and visa ready). Then another immigration officer turned up and talked to us for another 30 minute (very politely). He became visibly friendlier when he learned that my wife was a buddhist. Then he said that everything is OK but we would have to wait for the 3 star commander. The top guy arrived later and said: “We welcome turists in Shwegu but we have to be very careful. You can visit the island but only with one of my officers.” No problems after that. Therefore, my suggestion is to go to the Immigration office first and sort out the permission before you go to the harbour.
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