FRIDAY, March 29, 2024
nationthailand

Mae Sot: Not a small border town

Mae Sot: Not a small border town

Tak Governor Somchai Hatayatanti has likened Mae Sot to the Mackenna gold mine in the 1969 western "Mackenna's Gold".

 

Speaking to Thai and Myanmar businessmen recently, he said that the western province’s district was at the centre of the east-west economic corridor that links Vietnam to Myanmar and also benefited by being a sister city of Myanmar’s Myawady,

Tak’s potential will only rise now that 14 tambons in three districts, including Mae Sot, have been declared special economic zones, he said.

Somchai said a business delegation from Taiwan would explore the area next month, while Korean companies had expressed an interest in investing in beauty businesses and golf courses there.

To accommodate investment flows, tambon-level working committees have been set up. The Thai-Myanmar Labour Development Centre would be established to address skilled labour shortages.

He said now that Myanmar’s military no longer ruled the country, some refugees from Myanmar may choose to stay in Thailand. These people could satisfy the labour demands.

"The word ‘border’ will fade through time. I foresee two tiers of business here – foreign businesses and local ones consisting of cooperatives focusing on local expertise like food," he said at a conference organised by Kasikornbank.

The private sector in Mae Sot is upbeat over the trade and investment prospects there. The border town now boasts a number of auto showrooms, retail businesses like HomePro and a soon-to-launch Robinson Department Store as well as branches of nearly every Thai bank.

They are also catering services for locals and Myanmar nationals crossing the border via the Myanmar-Thai Friendship Bridge. Business transactions are expected to rise when a second bridge is completed in mid-2017, just as the special economic zone is slated to take shape.

The Customs Department data shows Mae Sot was already the busiest checkpoint among the five permanent ones along the Myanmar-Thai border. Thai exports to Myanmar through this checkpoint reached Bt42 billion in the first eight months of the year, or 66 per cent of total border trade with the country.

Even with transport bottlenecks, the result of the only road into Myanmar built in the British colonial era. The one-lane road allows for one-way traffic on alternate days. It is thought the upcoming new bridge and road will ease congestion and shorten the travel time. This will be complimented by road improvements on the Myanmar side.

While Thailand is supporting improvements to the road linking Myawady and Kawkareik in the south of Kayin State, the Asian Development Bank last week approved a US$100 million (Bt3.6 trillion) loan to improve a 66-kilometre section of road connecting the towns of Eindu and Kawkareik – the missing link of the Greater Mekong Subregion’s east-west corridor.

The project, scheduled for completion in September 2019, will improve the existing two-lane road in line with the GMS road network standards and improve the road link between Mawlamyine and Yangon with Da Nang in Vietnam.

"Kayin has been affected by sectarian conflict for decades, resulting in weak infrastructure and high levels of poverty. But it also has the principal road link to Thailand, along which 25 per cent of the country’s land-based trade passes," said James Leather, principal transport specialist for ADB’s Southeast Asia Department.

"Upgrading this stretch of the road will complete improvements to the Myanmar sections of the GMS east west-corridor. This will open up new economic opportunities for the state and country and support inclusive growth."

Kitti Suttisumpun, head of Maesot Customs House, is convinced that bilateral border trade through the checkpoint will expand at a faster rate than in the past. The value rose nearly four folds in the past five years, from Bt17.49 billion in the 2011 fiscal year to Bt64.24 billion in the 2015 fiscal year. Yet, most Thai exports consisted of goods imported from other countries for export to Myanmar. For example, mobile phones and accessories from Japan and South Korea, palm oil from Indonesia, cigarettes from Singapore, betel nuts from India and electrical appliances from Japan.

"Thai companies earn only transport fees, sometimes warehousing fees. I guess the Commerce Ministry will soon require these exporters to apply for licences," Kitti said.

While the Thai government expects more exports of made-in-Thailand products once the SEZ takes shape, Prasert Juengkijrungroj, vice chairman of Tak Chamber of Commerce, has cast doubts on its prospects.

He said that the scheme, highlighted by Board of Investment incentives, was set to draw big Thai companies and foreign companies in the manufacturing industry to Tak. He said instead of aiming to do that the chamber had proposed a plan centred on primarily strengthening local businesses which have expertise in trade and logistics and steering Mae Sot towards the benefits offered by the Asean Economic Community.

"Local businesses are now weighing up if they should move into the zone, fretting about competition. Another concern is a possible shortage of labour," he said, adding that about 50 per cent of Mae Sot’s labour force are Myanmar nationals.

But he is glad that the government as ably materialised the long-delayed development plan. Like others, he expects that it will bring about better infrastructure and investment in Mae Sot and Tak as a whole.

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