At present, for Thailand and its Asean counterparts, there is much to be
happy about. The countries have managed to buck the economic woes from the
West.
In addition, Asean has also seen
a US re-engagement that will contribute to the balance of power, the upcoming
Asean Economic Community in 2015, and the latest and probably foremost
development, Myanmar on the rise.
Since the Myanmar elections of
2010, the world has been taken by surprise. Presently, the transition in
Myanmar look promising. The old regime itself has put great efforts into
transforming Myanmar. The democratisation process began at the same time as the
Arab Spring was rampant in the Middle East. The release of Aung San Suu Kyi and
political prisoners and the drafting of the highly anticipated foreign
investment bill are positive developments that bode well for Myanmar and the
region. Moreover, foreign observers were elated by the result of the
by-elections in April 2012 which gave the National League for Democracy (NLD),
the main opposition party, 43 out of 44 representative seats for which they
contested. Albeit not adequate to give the NLD a parliamentary majority, the
election outcome reflects a gradual shift in power from a cadre of military
elites to the people.
However, it is less important who
is holding power than the apparent concerted efforts of two political figures.
U Thein Sein and Mrs Suu Kyi, the leaders of the government and the opposition,
who are working in tandem to restore the country's position as one of the
region's wealthiest countries and the world's largest rice exporter that lasted
up until the 1960s.
Mrs Suu Kyi, who advocated that
the West should impose further economic sanctions on Myanmar, recently has
shown a more compromising stance. Mrs Suu Kyi's overseas trips have lobbied for
the easing of sanctions. Concurrently, President Thein Sen has also exhibited
seriousness in reconciling with minority groups and in the military
transitioning to full democracy; the Myanmar Times reported that since coming
to office in 2011 the government has reached ceasefire agreements with 10 of 11
non-state armed groups. The government has also relaxed control of the press by
ending pre-publication scrutiny.
This author had a chance to
converse with the locals. It was rather paradoxical but optimistic in the sense
that the reforms are being implemented and ubiquitous. One local expressed his
admiration for both the reformist president and the resolute opposition leader
for their omnipresent efforts. This anomaly is praiseworthy especially if
compared with our situation at home where compromise is seemingly remote.
For Thailand, it is imperative to
urge the public to recognise the rise of Myanmar. The direct beneficiary of
Myanmar's ascent is none other than Thailand, provided that it engages and
demonstrates to Myanmar that it is in for long-term mutual benefits, not
exploitative lopsided gains. Myanmar has demographic and geopolitical
significance for Thailand. Its geography is logistically and strategically
important as it is the region's direct gateway to the Indian Ocean. This allows
maritime trade, including oil from the Middle East, to bypass the congested
Malacca Straits, thereby reducing hefty amounts of time and cost.
That the Myanmar authorities made
the decision to reform the country and open its borders means a new market
opportunity of 60 million people for Thai businesses; regardless of Myanmar's
natural abundance and potential economic growth, which makes the opportunity
even more eye-catching. The value of Thai investments, accounting for 23.8% of
Myanmar's total foreign investments, is second only to that of China. Thai
merchandise is also well received by Myanmar consumers; the locals generally
prefer Thai products, deemed superior to Chinese ones.
So far Thailand has been blessed
with Myanmar consumers' loyalty. This is a soft power advantage on which Thai
policymakers and the private sector must continue to build for Thailand's
economic interests. In the near future, certainly most of the sanctions will be
lifted; Myanmar's rapid growth will inevitably spill over to its immediate
neighbour. Up until now Thailand has had luck in terms of its vast economic
presence in Myanmar. Since the coup in 1988, continuing pressure from
Washington has forced Western and Japanese enterprises to limit their
operations in Myanmar; foreign development aid was also halted. Thailand,
however, responded cleverly. Then-army chief General Chavalit Yongchaiyudh
espoused constructive engagement toward Myanmar. Furthermore, from 1997,
Thailand has pursued Asean's principle of flexible engagement with Myanmar,
which has helped improve the relationship.
Yet, from 2012 on, foreign
competition for economic influence in Myanmar will only intensify; a few years
back Thailand was the largest investor in Myanmar by investment volume. Now it
has lost that title to China. It is, thus, in Thailand's interests to ramp up
its engagement in Myanmar amid the rising number of players.
So what should be done on
Thailand's side? As a result of imperialism and hardline pressure from the
West, Myanmar has developed a strong distrust of foreigners. Thailand must
therefore display its commitments in development assistance to Myanmar. In
comparison to wealthy donors like China and Japan, Thailand is marginal in
terms of financial aid. However, with our proximity in cultures and in
distance, Thailand can conveniently offer assistance in capacity development
and technical knowledge that are more crucial. That Myanmar isolated itself for
over half a century implies that at the outset its institutions will likely
experience a shortage of technical knowledge and well-functioning bodies to run
public affairs. Notwithstanding the fact that rich countries (China, Japan, and
the US) best Thailand in technical and institutional expertise, such
inferiority is our advantage because Thailand's models would be more viable and
logical for Myanmar to follow.
One scenario is the financial
sector. For the financial industry, the introduction of complex financial
instruments and highly automated systems that are beyond officers' ability to
administer would only be poisonous. Even the US has failed to supervise
subprime and other complex financial instruments which led to the financial
meltdown in 2008. In this case, Thailand's model should be more suitable for
Myanmar's financial development. Just a few decades ago, trading stocks in
Thailand had to be done physically. Ex-officials and a few current officials
who have been in the financial sector since its embryonic stage can extend
their practical expertise and experience to institutions and businesses in
Myanmar. Without being too jocular, the Stock Exchange of Thailand has already
extended its influence beyond the expertise of the bourse. The Economist
reported that the winning numbers for Myanmar's informal lottery are generated
by the SET Index.
As this wave of opportunity lies
before us, it would be a grave mistake to manoeuvre at tortoise speed while
other counterparts vigorously expand their influence in Myanmar. Thailand's
cultural and economic influences in Myanmar are contingent on it developing
awareness of Myanmar domestically. Thailand's top priority is to publicise the
significance of Thailand's neighbours, be it Myanmar or Asean partners. If the
public can see the importance of their westernmost neighbour, more budgets and
resources can be allocated to engaging Myanmar. And once all the efforts start
bearing fruit, Myanmar's rise will be the new engine of the region and of
Thailand in particular.
Sirapol Ridhiprasart
Business & Investment Opportunities
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