Traders worried Asian linkage will spur shif of Myanmar's cross-border trade to China: study

Presenting the evaluation of four Thai government-sponsored infrastructure development projects in Myanmar and Laos, Charit Tingsabadh, director of the Centre for European Studies at Chulalongkorn University and study-team leader, said yesterday that local traders in Mae Sot, a northern district in Tak province sharing a border with Myanmar, are worried about a dilution of their area as a cross-border trading hub due to the emergence of increased border commerce between Myanmar and China.
 Myanmar’s trade with China via the Muse-Luili border point now represents about 60 per cent of its overall border commerce, with cross-border trade at Mae Sot now in second place.
 Teerasak Mongkolpod, senior vice president of the Neighbouring Countries Economic Development Cooperation Agency, yesterday said that while border trade in jewellery had begun to shift from Mae Sot to the Muse-Luili border in recent years, he did not regard it as a matter of great concern.
 However, Adool Islam, assistance vice president of Tesco Ltd, said local businesses now urged the government to quickly establish a special economic zone in Mae Sot in order to attract trade and investment.
 Otherwise, other sectors such as frozen seafood might also switch attention to the Muse-Luili border, he said, adding that the Chinese government offers better incentives to foreign investors than the Kingdom provides.
 According to the study led by Charit, the Thailand-Myawaddy-Tanasserim Hills Range road has contributed to an increase in trade between Thailand and Myanmar.
 The Thai government provided soft loans worth of Bt122.9 million for first-phase construction of 17.35 kilometres of road, which was completed in 2006. Two-way trade then increased sharply between 2007 and 2010, rising from Bt20 billion to about Bt60 billion a year.
 However, it is hard to quantify how much the trade volume was directly facilitated by new investment, as there are also other factors contributing to cross-border commerce.
 The study also found that the road had started to become damaged, partly due to overloaded Myanmar trucks. Myanmar officials cannot limit the load of their trucks, according to the study team.
 The Thai government has committed to providing second-phase assistance for a further 23km of road to the town of Kawkareik, in a project under consideration by the Myanmar authorities.
 If approved, the project will turn a one-lane road into a two-lane road. The current one-way traffic to and from Yangon is extremely time-consuming for drivers, who have to wait their turn to use the road.
 Meanwhile, although the rail project linking Nong Khai province in the Northeast to Nathalaeng in Laos has not been able to compete with bus and other land travel due to higher costs and lower convenience, the second-phase plan to extend the rail line to Vientiane is expected to increase passenger numbers and goods transport, the team said.
 As to Wattay international airport in Vientiane, since the Thai government built the aircraft taxi and parking areas for large planes in 2006 , the Japanese and Chinese government has poured in large levels of assistance to expand the airport.
 Meanwhile, water-drainage efforts in Vientiane have benefited local communities, according to the study.
 Teerasak said that among the major projects to be assisted by the Thai government over the next five years are an extension of the electricity grid into Myanmar and Laos, as well as the provision of a tap-water system in both countries.
 The government has committed financial assistance worth Bt10.7 billion to neighbouring countries, including Cambodia, with disbursement of about Bt4 billion to Bt5 billion to date, he added.