FTI: Boost border economy

FTI: Boost border economy

The business sector has urged the government to set up exhibition centres in neighbouring countries to support border trade and channel regional integration after the implementation of the Asean Economic Community (AEC).

Exhibition centres should be set up in all countries bordering Thailand, including Cambodia, Laos, Myanmar, Vietnam and Malaysia, to help increase exports via cross-border trade, said Thawatchai Hengprasert, vice-chairman of the Federation of Thai Industries (FTI).

"Thai products are very well known in Asean, especially consumer items, construction materials and food products," he said.

"The export value of these products continues to grow in Asean."

As a result, the FTI has asked the government to speed up the construction of logistics centres in special economic zones (SEZs) as a way to boost the border economy. 

The government has kicked off the development of SEZs along the border with the aim of setting up industrial estates, trade facilities and modern border checkpoints to boost trade and investment in remote areas.

But land speculation and protests by villagers, plus misunderstandings about the policy, have delayed the projects for almost a year.

This has led the private sector to urge the government to develop some parts of the SEZs first instead of promoting them as whole projects in order to boost border trade.

"We have heard about the SEZ policy for a long time but progress has been very slow. However, the government could accelerate the development of logistics centres, which can immediately help boost border trade and exports," he said.

The FTI forecasts the value of cross-border trade to rise by 1% in the first quarter to 281 billion baht.

Mr Thawatchai said the 1% growth in the first quarter of this year was far below the 10% growth in the first quarter of 2015, which he attributed to the sharp drop in commodity prices.

"For instance, the price of rubber, which is exported largely from Thailand's southern provinces to the global market via the Malaysian border, has fallen by more than half over the past few years. This has also sharply cut the value of trade along the border in general," he said.

According to the Commerce Ministry's Border Trade Service Centre, Thailand's total border trade was valued at 1.14 trillion baht in 2015. 

Of the total, Thai-Malaysian border trade contributed 214 billion baht, while Thai-Laotian border trade was worth 176 billion baht.

Thai-Cambodian trade accounted for 124 billion baht while 50 billion baht was generated from border trade with Vietnam.

Border trade this year is expected to reach 1.5 trillion baht due to the growing economies in neighbouring countries after the AEC came into effect.

Mr Thawatchai said given the weak outlook for rubber prices, he expected the value of trade between Thailand and Malaysia to remain low this year.

However, the value of trade along the borders with Cambodia, Laos, Myanmar and Vietnam is expected to grow substantially, he said.

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