Time for Mekong region to make preparations for AEC

Speaking at a seminar entitled “The Mekong Mainland: Axis of Prosperity, Security and Competition”, Chulalongkorn University academic Thitinan Pongsudhirak said the integration of countries in the Mekong basin would have to be deeper in line with integral markets and geographical proximity.

As the region is growing, it is gaining attention from major powerhouses such as China, Japan and the United States, he said. He pointed out that China had a greater role in Myanmar, Laos and Thailand both economically and politically, while the US is more engaged with nations in the lower Mekong, although it has not been very successful yet. 

Japan had also invested a lot in the region, but felt it was slipping away, he said. 

China, meanwhile, is changing its role and attitude toward the region, he said. Rather than taking immediate advantage, Beijing is using “soft power” instead to deal with foreign countries. 

“Of course, China still wants output from relations, but it is offering more in exchange,” he said. 

Meanwhile, Southeast Asian countries have their own problems. Reform in Myanmar is progressing slowly and it may hit political difficulties next year if the constitution is not amended to open the way for Aung San Suu Kyi to lead the country, he said. 

Thailand is under junta rule, while Vietnam and Laos are dealing with the high costs of modernising. Also, Cambodia’s strongman Prime Minister Hun Sen appears to be getting weaker, he added. 

The World Bank’s country director Ulrich Zachau said Southeast Asia was one of the dramatically growing regions of the world. Growth in the region, with the exception of Thailand, has averaged more than 6 per cent per annum. The region has been able to boost growth while reducing inequality, he said.

He suggested that countries follow three steps to boost growth and equality – deepen regional economic integration; increase access to education and finance sources for people; and create job opportunities, plus support small and medium enterprises. 

The Mekong region is part of the Asean Economic Community, which will be launched at the end of next year and promote a free flow of goods, service and skilled labour. But he said non-tariff measures remain major obstacles, with Asean having some 3,500 non-tariff measures blocking economic free flow. 

Meanwhile, infrastructure, notably energy and roads, is still inadequate in the Mekong region, he said.

Ruth Banomyong, from Thammasat University’s Department of International Business, Logistics and Transport, said the Greater Mekong Sub-region had been developing infrastructure for logistics for decades, but it was not enough. 

Another key problem for logistics is the Mekong region does not have any effective rules and regulations for cross-border transportation. There is also a lack of local logistics networks in the region, while the governing of logistics lacks transparency and the quality of logistics is still low, he added. 

“It is not difficult to build roads, but the laws and regulations for transportation are a problem,” Ruth said. 

Akira Murakoshi, president of Mitsubishi (Thailand), said regional economic integration would create great opportunities for investment. He said if Thailand wants to maintain its lead role in the region, it should open its doors to neighbouring countries to facilitate trade, service and investment as well as the exchange of labour force. 

“By doing this, foreign companies will continue investing in Thailand,” he said.