Myanmar 'offers big challenge'
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Myanmar 'offers big challenge'

European firms keen to invest in Thailand

Myanmar's opening up gives Thailand opportunities but challenges also lie ahead in terms of investments to improve infrastructure and skilled labour supply, say European executives.

Better links will affirm Thailand’s role as Asean hub, says Ms Yingluck.

Rolf Schulze, Germany's ambassador to Thailand, said Myanmar's emergence poses both positives and challenges for Thailand, so the country should enhance its competitiveness by increasing connectivity with neighbouring countries.

"Given the ongoing political stability, trust is here in Thailand as the important ingredient for foreign direct investment," he told the Bangkok Post.

"With the clear message from the government about [2 trillion baht in] infrastructure investment over the next seven years, Thailand is on the right track to enhance the country's competitiveness."

German investors, like those from other countries, are keen to build their presence in Myanmar, while Thailand is a potential base to tap into a market of 601 million people in neighbouring countries, said Mr Schulze.

Thailand is Asean's second-largest trading partner with Germany after Indonesia, with bilateral trade approaching US$10 billion last year.

Germany, meanwhile, is by far Thailand's biggest trading partner in the EU.

About 600 German companies are doing business with and in Thailand, with investment here totalling 6 billion baht last year.

"German companies are once again looking into the possibility of realising major direct investment in Thailand in the coming years," Mr Schulze said.

Addressing a lunch of foreign chambers hosted by the German-Thai Chamber of Commerce (GTCC), Prime Minister Yingluck Shinawatra admitted deficiencies in infrastructure and logistics in recent years have reduced Thailand's competitiveness with neighbouring countries due to a heavy reliance on road transport.

With the planned huge investment in infrastructure including high-speed trains and mass transit rail lines, Thailand will have better links with other countries in the region and increasing cross-boarder trade.

"These will affirm our position as a logistics and manufacturing hub of Asean," said Ms Yingluck.

The government is also reviewing investment proposals for the $9-billion water management regime, with implementation of projects expected by year-end, the prime minister said.

GTCC president Karl-Heinz Heckhausen said Thailand has the best advantages to capitalise on Myanmar's opening up and to be the Asean hub of German companies given the country's industrial competitiveness.

"For German companies, Thailand's competitiveness is No.1 in Asean, especially in the automotive industry," said Mr Heckhausen.

However, he noted that supplies of skilled labour, especially engineers, and education should be improved to serve increasing investments in the country.

Thomas Chambers, managing director of the auto parts maker Continental Automotive (Thailand), agreed that a good supply of labour as well as rail and airport expansion are vital for Thailand's future.

Continental Automotive aims to expand its factory in Thailand, possibly in the next three years, to serve its market penetration in Myanmar and the establishment of the Asean Economic Community in 2016, he said.

Transparency and clear tender regulations are expected by foreign investors from now on for the massive planned infrastructure investment, said Mr Chambers.

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