Bangkok Targets Burma in Special Border Trade Plan

By William Boot 1 September 2014

The military junta now governing Thailand is pressing forward with plans to create a special status border trading area with Burma as Thai overland exports mushroom and financiers urge the establishment of border factories.

The move could lead to greater control of migrant Burmese labor by attempting to confine foreign workers to the zones, a report said.

Special-purpose economic zones dotted along Thailand’s borders have been on the debating table in Bangkok for more than a decade, but the National Council for Peace and Order (NCPO) is now promoting action.

The NCPO, led by Army chief Gen. Prayuth Chan-ocha, was created following the military coup in May after months of political unrest in the capital Bangkok.

“[A] committee will oversee the establishment of 12 proposed special economic zones along Thailand’s border areas. The National Economic and Social Development Board, a government-funded planning agency, has reportedly hired a consulting firm to study the development of the zones in 12 provinces,” said a statement issued by the Thai Embassy in Washington.

Priority will be given to five zones, bordering Burma, Laos, Cambodia and Malaysia, said the state radio and television operator MCOT.

The zone most likely to be developed first is at Mae Sot, opposite the Burmese town of Myawaddy and already a major employer of migrant Burmese labor, MCOT said.

The NCPO’s prioritization of the special economic zones comes as new figures published show that Thailand’s trade deficit with Burma is evaporating as Thai businesses push more exports across the border.

There has long been a trade imbalance between the two countries because of Thailand’s importation of large volumes of Burmese natural gas.

However, the gap is rapidly narrowing as Thai businesses speed up overland exports, now ranging from fuel oils such as diesel, vehicles, textiles, electronics, and even food and beverages.

Thai exports to Burma have been increasing 17 percent annually since the end of the Burmese military regime, according to a study by Bangkok Bank made public this week.

The trade imbalance between the two countries had averaged US$2 billion a year since 2000, due to Thailand’s large imports of natural gas, but the bank estimates that the gap will be narrowed this year to $626 million.

By 2016, the gap will have vanished and the value of Thailand’s exports to Burma will exceed its gas imports, bank executive vice-president Kobsak Pootrakool said in a report presentation in Bangkok.

Thai manufacturers and exporters should take advantage of Burma’s growing market prospects and establish factories in the border provinces, the bank said.

The biggest existing export point is the Mae Sot-Myawaddy border crossing and it is the Thai side of the divide that is now expected to get a special development status green light from the NCPO.

“General Prayuth would like to see special economic zones that will import and use raw materials from nearby countries and allow foreign laborers to travel across the border to work there with ease,” Thailand’s Embassy in the United States says in a promotional statement on its website.

“Special economic zones in border areas could replace a strategy abandoned by the [Thai] Board of Investment in which greater incentives were offered to businesses that invested in areas far from Bangkok.”

But it appears there is also another reason why the NCPO is keen to revive the decade-old proposal for border development zones: keeping foreign migrant workers at arm’s length.

“An added benefit of the zones would be to prevent large influxes of migrant workers into big cities, with their attendant social problems,” said the embassy in Washington.

Since taking power in May, the military has been cracking down on migrant labor in Thailand. More than a quarter of a million Cambodians have left the country and Burmese workers—even those with legitimate papers—have been harassed, say human rights NGOs.

There are an estimated 2 million migrant workers in Thailand and around 80 percent of them are Burmese, although an accurate head count is impossible because black market trading in illegal labor has gone on for years.

Burma is being increasingly targeted by an NCPO leadership that has focused on reviving Thailand’s economy, which has been stymied by political instability.

The Irrawaddy reported last week on how the NCPO is providing impetus for the country’s state-controlled oil and gas companies to chase business in Burma.

Senior Army officers now sit on the board of Thailand’s giant energy company PTT, parent of PTTEP, which operates numerous oil and gas blocks in Burma.