Chiang Mai gains from lure of CLMV markets
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HALF of the economic growth in Chiang Mai has been driven by businesses from other regions that want to cash in on the opportunities opening up in the CLMV countries, according to the Federation of Thai Industries' chapter in the northern province.
Businesses from the Central region and the Northeast want to have a presence in Chiang Mai to take advantage of the growing purchasing power in Cambodia, Laos, Myanmar and Vietnam as well as southern China, Jakkarin Wangwiwat, vice president of the Chiang Mai Chapter, told a CIMB Thai Bank seminar last week
Local companies must cluster to increase competitiveness and must offer a “selling point” to get in on the act, he said.
Small business is the key engine of economic growth in the province. Recently, food businesses assembled as a food valley, focusing on research to add more value to their products.
Industries that could compete should set up their own valley. The FTI will assist them by organising roadshows to help them see the market first-hand and meet prospective partners in neighbouring countries.
What local businesses need from the government is keeping fuel prices the same as in Bangkok. Logistics is important for doing business in Chiang Mai and the North as most products are supplied to neighbouring countries, he added.
Vipaval Woraputtipong, president of the Chiang Mai Chamber of Commerce, said what is limiting Chiang Mai’s growth is the urban planning law, which does not encourage property investment and factory expansion. The chamber is pushing for an amendment.
Another problem that will be brought to the government’s urgent attention is smog, which drastically erodes the confidence of tourists.
Each year, the province loses Bt80 billion in income from the health problem caused by haze, which is a high figure. This province needs income from tourism to keep GDP growing, she said.
Amonthep Chawla, head of research at CIMB Thai Bank, said Chiang Mai shares borders with CLM countries, which have a rising middle class. This will be a boon for tourism in Chiang Mai and Thailand.
The country should hurry to promote twin cities to serve the cross-border travel of those tourists in the future.
The global economic slowdown will eventually dampen trading in the CLMV, and those countries might not grow as fast as before.
If China’s economy loses more momentum, that would also act as a drag on transactions in the CLMV, so businesses in Chiang Mai should look for other lines than trading.
“The enterprises should try to attract consumers from CLMV and China to come to the province, like some provinces in the Northeast did. Wealthy Laotians come to Udon Thani for shopping and repairing their luxury vehicles. The service business in Chiang Mai has the potential to do that as well.
“Value upgrades are important for the province in dealing with the middle income consumers in CLM countries,” he said.
