China, Japan poised to cut out Thai firms
Thai businesses must be ready to seize Myanmar's new opportunities by late 2015, when the Asean Economic Community (AEC) will kick off, or they will be squeezed out of the market by Japan and China, say experts.
Nitivadee Manitkul, the Foreign Ministry's director of economic relations and cooperation, said Thailand's private sector currently lacks the knowledge to take advantage of the trade agreements or operate effectively in Myanmar.
Japan, on the other hand, has already set up an information office to help its companies gain a foothold in the previously military-run nation, she said.
"Currently, 80% of Thai-Myanmar trade occurs on the border and still operates under the same conditions as before Myanmar opened up," said Ms Nitivadee.
She said Board of Investment initiatives are also failing to promote Thai investments abroad effectively.
Myanmar will chair Asean next year, then the AEC will take effect at the end of 2015, reinforcing the Myanmar government's steady efforts to promote foreign investment, said Ms Nitivadee.
In a related development, Thailand's International Institute for Trade and Development will soon issue a report on Thai investment opportunities in Myanmar to spearhead the delivery of useful information to Thai businesses.
"One of the most overlooked factors in conducting businesses in Myanmar is the country's business culture such as business attire," said Teera Sindecharak, a researcher on the report.
He said while Thailand has a long-established trading relationship with Myanmar, the historical link can also involve unresolved grievances.
"Our perceptions of them must change to accommodate this new reality," said Mr Teera.
To realise opportunities in Myanmar, Thai investors must overcome challenges such as inadequate basic infrastructure and protracted ethnic conflicts.
But Watcharas Leelawath, the report's lead researcher, said understanding local and, especially, foreign investment law is the most crucial aspect for Thai firms.
"But what we found out during our research is such laws are ambiguous and difficult to follow," he said.
Mr Watcharas said government seminars should be organised to inform investors, who could miss out through not being aware of new trade deals.
This article first appeared in the Bangkok Post on September 14, 2013.