Seminar hears hurdles to GMS development

Participants at a seminar in Bangkok yesterday raised concerns over labour shortages and how to share resources in the growing economy of the Greater Mekong Subregion.

The labour market in the GMS was one of the topics at “GMS and the Asean Economic Community: Convergence, Opportunity and Challenges”, a seminar arranged by Euromoney Conferences.

The GMS consists of Cambodia, Laos, Myanmar, Thailand, Vietnam, and China’s Yunnan province.

The participants agreed that the subregion was an attractive market for trade and investment ahead of the AEC, and the economies of the riparian countries were improving as a result.

However, labour shortages might become a barrier to business competitiveness, said Virasak Sutanthavibul, senior executive vice president of Bangkok Bank.

Virasak said the GMS was the place for businesses that want low costs, citing Cambodia as an example.

The shortage of labour, however, is a more serious issue for Thailand than other countries in the GMS because it is no longer considered a low-wage market, so many labour-intensive businesses have shifted to Cambodia.

Thai businesses should seriously think about mechanising their production because they cannot rely on workers from neighbouring countries, he said.

“Laos is not a source of labour because of the low population, while workers in Cambodia often strike. Therefore, Myanmar is the choice for Thai business, but Myanmar is developing, and once it has become a developed country, Thailand might be unable to rely on workers from Myanmar.” 

He said the bank had attempted to encourage small and medium-sized enterprises to use more machines in the production process.

“Many SMEs are injecting capital into mechanisation, which will fuel loan growth of financial institutions as well,” he said.

Neav Chanthana, deputy governor of the National Bank of Cambodia, noted that the free movement of labour might be a barrier for businesses’ competitiveness as companies might not be able to secure workers. Further, the slow growth of the younger population in some countries in the GMS was another challenge to the growth of the sub-region.

“Cross-border trade in the GMS means businesses have connectivity, but we have to monitor closely the conflict [for river resources] between the lower and upper Mekong countries,” she said. 

Narongchai Akrasanee, former minister of commerce and member of the Bank of Thailand’s Monetary Policy Committee, said 40 per cent of the water in the Mekong River came from China and the rest from rainfall in Laos and Thailand.

“It could be a big challenge for the GMS on how to share the resources, and it might take time to reach a conclusion,” he said.