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Economic zone expected to drive up Thai-Burmese border trade

Border trade between Thailand and Burma via the friendship bridge stood at US$6 billion in 2013 (Photo: DVB)

Thailand’s border trade with Burma is expected to flourish over the next couple of years, driven mainly by the planned development of a special economic zone (SEZ) in Tak’s Mae Sot district.

Isara Vongkusolkit, chairman of the Thai Chamber of Commerce (TCC), said this year alone the cross-border trade between the two countries was expected to grow by 10% from last year’s 197 billion baht.

This is fuelled particularly by the bustling activity in Mae Sot, where the border trade is expected to surge 30% this year from 43.7 billion baht in 2013.

Mae Sot was chosen in July by the National Council for Peace and Order to be developed into an SEZ.

Other SEZs in Thailand are  in Songkhla’s Sadao district, tambon Khlong Luek of Sa Kaeo’s Aranyaprathet district, Trat’s Khlong Yai district and Mukdahan’s Muang district.

However, Mr Isara said the Mae Sot checkpoint still had problems with transport infrastructure and roads.

“Tak’s border trade would be greatly facilitated if a second Thai-Burma Friendship Bridge could be built connecting the two countries and roads were improved on the Burmese side around Myawaddy,” he said.

TCC vice-president Niyom Waiyaratpanich also believes a second bridge linking Thailand and Burma would facilitate bilateral trade, particularly in terms of logistics costs, which could be halved to one baht a kilogramme.

Thailand will gain much benefit from a Mae Sot SEZ, not only from reduced logistics costs but also higher employment of foreign workers, he said.

Mr Niyom said more importantly, the new SEZ would convince small and medium-sized enterprises to invest more in the area.

However, the government should also offer attractive incentives to attract investment there, he said.

Foreign Trade Department statistics show Thailand’s border trade with Burma amounted to 123 billion baht in the first eight months of this year, down by 2.51% year-on-year.

The border trade with Burma during that period accounted for 19.5% of Thailand’s border trade in all areas, which totalled 633 billion baht, up by 4.3% year-on-year.

Last year, Thailand’s overall border trade with all four neighbouring countries was valued at 924 billion baht, up by 1.51% from 2012.

Of that total, exports accounted for 560 billion baht, up by 0.58% from 2012, and imports 364 billion baht, up by 2.98%.

Mr Isara expects 2014 will turn out to be another good year for Thailand’s overall cross-border trade, growing by at least 10%.

This article was originally published in the Bangkok Post on 15 October 2014