Burma opening up to more Thai investment

Heavy emphasis on infrastructure projects 

Burma hopes to lure Thai investment this year, particularly in infrastructure projects, after many years of low cooperation with the exception of PTT, says the Neighbouring Countries Economic Development Cooperation Agency (NEDA).

President Acksiri Buranasiri said the agency's executives held discussions with Burmese ministry officials during a state visit last October, focusing on assistance Thailand could provide to Burma.
The Burmese officials asked Thailand to assist in developing a road to complete a transport network called the East-West economic corridor. They also want Thailand to invest in developing its Bagan airport, where it plans to allow direct flights of mid-sized airplanes.
Bagan airport is a part of Burma's "Emerald Triangle" national development plan, which is aimed at bridging cultural and tourist destinations including Bagan - the so-called land of a thousand pagodas - to Pakse in Laos, Cambodia's Siem Reap and Thailand's Sukhothai.
"This plan is aimed at building up regional cultural tourist attractions instead of each place alone, so that it is convenient to visit several locations across borders during a single trip, similar to travel in Europe," said Mr Acksiri.
Providing financial assistance to neighbouring countries is expected to benefit Thailand as well. For example, around 70% of travellers to Laos transit through Suvarnabhumi airport. Once the new airport in Laos has been built, it will attract more visitors through Thailand.
Burmese projects are expected to stimulate the Thai construction business as NEDA's contract offers a low interest rate of 1.5% on loans provided the lender agrees to hire only Thai contractors and use at least 50% Thai raw materials.
NEDA is waiting for the Burmese government to set up after its recent election before it signs an agreement.
In the past, most projects in Burma earned financial and development assistance from China. An exception is the 30-kilometre road from Myawaddy to Tanaosri, which used a 4-billion-baht loan from the Export-Import Bank of Thailand.
In the past, NEDA provided a 1-billion-baht soft loan to Cambodia for the route from Chong Jom in Surin province to Siem Reap, but it was revoked due to tensions between the two countries, so financing fell to the Chinese government.
Since the agency began in 2005, NEDA has provided soft loans for 12 projects worth 5 billion baht and given an additional 2.5 billion baht in financial grants. There are eight projects in Laos, two in Cambodia, and one each in Burma and Vietnam.NEDA is expanding external economic development by focusing on smaller economies as Thailand is still a developing country.
It plans to seek cabinet approval to extend its coverage to East Timor, Sri Lanka and Bhutan, where it foresees great potential for infrastructure development in the future.
Laos still requires development projects that will cost around 180 million baht, such as the second phase of Pakse airport, as that city tries to become the second largest behind Vientiane.
"Laos asked us if we can help finance development projects in six or seven cities, but we might limit it to a few major cities first. Each city requires only slightly over 100 million baht, but it helps strengthen the relationship of Thais with Laotians as the development improves their quality of living," said Mr Acksiri.
This development aids Thailand, he noted, as the branch with the highest sales earned for Tesco Lotus in Thailand is Nong Khai, which is on the border with Laos.
In the near future, NEDA will focus on paving ways for Thai companies to be priority investors in these neighbour countries by setting conditions on soft loan agreements.
"For instance, if we provide soft loans to some country to build roads, railways or container yards, Thai private firms should have priority to invest in related projects such as hotels," said Mr Acksiri.