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Thailand bent on bigger influence in Myanmar

Publication Date : 01-08-2012

 

Last week, when Thai Prime Minister Yingluck Shinawatra reaffirmed Bangkok's support for a multibillion-dollar deep sea port in neighbouring Myanmar, she was not just announcing another infrastructure project. Rather, she was trumpeting Thailand's determination to extend its influence in the strategically positioned state at a time when major players such as India and China have similar ambitions.

The Dawei port development on Myanmar's southern Andaman coast is a key part of the impoverished country's plans to transform its economy in the wake of relaxed international sanctions. For Bangkok, it offers a way of currying favour with senior figures in Naypyidaw while at the same time developing infrastructure that will provide Thai exporters with a direct outlet to the Indian Ocean.

While many large Western corporations remain reluctant to invest in Myanmar because of uncertainty about local laws and confusing signals from their governments about the future of international sanctions, Chinese, Indian and Thai businessmen are actively seeking out new business opportunities. Even Bangladeshi businessmen are showing interest now that a long-running dispute over rival territorial claims in the Bay of Bengal has been settled.

Having been overtaken by China as Myanmar's largest trading partner in recent years, Thailand is clearly determined to maintain its influence in a country long regarded as a traditional enemy.

For the financial year ended in June, Myanmar's border trade rose by a surprisingly robust 58 per cent to US$3.36 billion compared to the previous year. China was by far the biggest border trade partner, accounting for more than US$2 billion of the total. Thailand was in second place and India third.

According to the Myanmar Investment Commission (MIC), six official Chinese delegations visited the country last year to discuss investment in infrastructure, mining, energy and manufacturing. China and Myanmar trade mainly via the Muse trading zone on the Shweli river, as well as a limited number of other border crossings, including one in Shan state. Other possible entry points are closed as a result of armed conflict with rebel groups.

MIC data shows China invested about US$13.6 billion in Myanmar, mostly in the energy sector in the 2010-11 financial year.

The value of border trade is likely to rise significantly in the coming years. Most of the current trade with India, for example, goes by sea. But Indian Prime Minister Manmohan Singh recently renewed high-level talks on a highway project that would allow for much higher land-based volumes.

Apart from boosting Thai exports, the proposed Dawei deep sea port would allow goods entering the country via Myanmar to be transported by rail or road directly to Thailand's eastern seaboard, thus bypassing Singapore and the busy Strait of Malacca. But the project, together with its associated free trade zone, has been finding it hard to attract investors. Local villagers are also opposed to the plan. Currently, it is being led by Bangkok construction firm Italian-Thai Development.

Last week, when Myanmar President Thein Sein visited Thailand, the two nations attempted to revive interest in the project by signing a memorandum of understanding on the development of a special economic zone in the area.

"In our talks, I reaffirmed the commitment of the Thai government to push forward with this cooperation with Myanmar in regard to the development of the Dawei deep sea port to have concrete progress," Agence France- Presse news agency quoted Ms Yingluck as saying.

While in Bangkok, Thein Sein also took the opportunity to talk to the leaders of Thai business groups that have already established a presence in Myanmar. These included the Siam Cement Group and Charoen Pokphand Foods (CPF).

The result was a string of announcements that reflected the positive view Thai corporations have of Myanmar's prospects. CPF, for example, said it planned to invest US$550 million in Myanmar over the next three years. This compares to an investment of just US$150 million over the past 15 years.

Thai energy giant PTT also announced it intended to forgo its right to excess supplies of gas produced at a gas field in the country in an effort to help Myanmar resolve its power supply shortage. The move may not have been entirely altruistic. PTT chief executive Pailin Chuchottaworn later said the company expected to sign more gas supply contracts with the Myanmar government.

All sides might nevertheless benefit from the advice of Nobel Peace Prize winner Aung San Suu Kyi, who visited Bangkok in June to attend the World Economic Forum. Beware of "reckless optimism", she told delegates. "Even the best investment laws would be of no use whatsoever if there are no courts that are clean enough and independent enough to be able to administer those laws justly," she said, adding: "We are not aware of any reforms on the judicial front."

For Thailand, which has a long history of troubled relations with Myanmar, that sounds like particularly good advice.

 

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