MoUs inked to step up Thailand-Myanmar cross-border trade

Business communities and the governments of Thailand and Myanmar have agreed on bolstering cross-border trade by improving existing channels and developing new routes, and with an emphasis on the exchange of data and a new cross-border SEZ.

The Thai delegation, led by Thailand’s Deputy Prime Minister Somkid Jatusripitak, met with State Counsellor Daw Aung San Suu Kyi on February 2. Jatusripitak was also received by President Htin Kyaw at the Credential Hall of the President’s Office in Nay Pyi Taw. In a statement, the President’s Office said the two sides discussed supporting small-and-medium-sized enterprises (SMEs), developing the border areas and promoting investment in infrastructure.

The deputy PM, who was on his first visit to civilian-administered Myanmar, highlighted the economic importance of border trading for both countries, and announced that both sides agreed to deepen ties by extending and upgrading the Thailand-Myanmar Road.

Jatusripitak said that the route – which passes from India to Myanmar and then to Thailand before continuing to Laos and Vietnam – is the main channel connecting the two countries, and hence a pivotal route for the entire region. He said Thailand will take a proactive role in financing the construction of under-developed routes located in Thailand and Myanmar. The deputy PM added that a committee would be formed to support and monitor the development of important routes.

While the Mae Sot-Myawaddy border crossing is very important, there are other opportunities on the horizon. If the relevant administrative authorities in Thailand and state or regional chief ministers in Myanmar agree, new gates along the border can serve as cross-border trading routes. Trading along the border will then flourish. With the establishment of the ASEAN Economic Community, fostering cross-border trade by integrating the two countries will help penetrate the market, especially those of the CLMV (Cambodia, Laos, Myanmar, Vietnam) countries. 

A total of 16 bilateral business memoranda of understanding (MoUs) were signed. They touched upon bolstering Myanmar-Thailand tourism, improving border trading and collaborating on developing rural areas. The private sectors in the two neighbour countries, led separately by the Federation of Thai Industries (FTI) and Union of Myanmar Federation of Chamber and Industry (UMFCCI), signed the memoranda to collaborate in various fields such as infrastructure, communications, construction and agriculture. Strategic partnerships include upgrading Dawei General Hospital, cooperation in fishery industry and a mechanism between Krung Thai Bank and Myanma Economic Bank to ease the procedures for Myanmar migrant workers in Thailand to transfer money.

Jatusripitak said that Thailand has plenty of experience in developing industrial and agricultural sectors, both of which have a significant potential in Myanmar. The memoranda are expected to cover the next two to three years.

Cross-border trade these days is as much about the exchange of information as it is about the movement of services and goods. The business agreements also encompass developing Myanmar’s SMEs, digital economy, human resources and software standards. Specific ventures named include the products barcode system, widespread usage of GS1 and e-wallet platform systems. The memoranda have emphasised the strengthening of information sharing. Partnering with UMFCCI, the University of Thai Chamber of Commerce (UTCC) and the FTI will develop human resources and share economic research data respectively. The latter would also exchange industrial technologies and software development.

“We want to and we have planned to support the export of products made in Myanmar, to Thailand or to the global market,” said Panitarn Pavarolavidya, chair of Thai-Myanmar Business Council and deputy secretary general of FTI.

“There is an age-old saying: Myanmar is the farmland, Thailand is the kitchen. We want Myanmar to be the farmland, and also the kitchen, so we will help until Myanmar and Thailand are able to stand equally in the supply change.”

There were plans to develop Mae Sot and Myawaddy, separated by the Moei River, into a special economic zone. For that to happen, investments and infrastructure are not adequate: the countries would also explore the need to designate a currency for the SEZ. According to the deputy PM, there would be no problem for road infrastructure support and cargo transport, and the Thai government, working together with the energy sector, has provided plans to its Myanmar counterpart for upgrading existing energy supply facilities.

Back in 2013, the Thai government decided to establish an SEZ at the border town of Mae Sot. Dr Mg Mg Lay, then-UMFCCI vice chair, said the zone could bring benefits to both countries.

“The establishment of an SEZ in Mae Sot could help the ASEAN Economic Community develop and create more jobs … Workers from Myawaddy in Kayin State on the Myanmar side, could also earn ... later on if the demand for labour is competitive. We have a plan to set up another SEZ in Myawaddy as well,” he said.

At that time, Mae Sot customs officials boasted that the border town was located on the projected East-West Economic Corridor Route that would connect Muse, Tamu, Mandalay and Yangon, bringing potential benefits to millions of people.

The then-Kayin Chief Minister U Zaw Min also spoke in favour of the Economic Corridor Route, a project backed by the Asian Development Bank which has been years behind schedule on the western Myanmar end of the proposed “corridor”.

A 1450-kilometre (900-mile) highway, in various stages of development, was intended to link Vietnam starting in Da Nang with Laos and Thailand and then pass through Kayin state to the port of Mawlamyine at the mouth of the Thanlwin (Salween) river. It was believed that the ambitious venture would facilitate economic integration between Myanmar and Thailand, as well as improving connectivity within the Mekong sub-region.

According to the Thai delegation, there are plans submitted to Nay Pyi Taw to authorise and regulate the use of baht in Myanmar to facilitate trade. Thai currency, as well as the Chinese renminbi, are widely used in some parts of Myanmar.

By Chan Mya Htwe