May I take this opportunity to extend my warmest congratulations on the opening of Siam Commercial Bank's representative office in Yangon, Myanmar.
The presence of a renowned Thai banking institution in this beautiful country carries with it several important but hidden connotations. Firstly, it represents the degree of confidence of investors and businessmen towards Myanmar. In other words, it is an endorsement of Myanmar's reform policy as well as a clear testimony on Myanmar economic potential. Secondly, it reflects the awareness of Thai society towards various opportunities in Myanmar as a result of the reform process. They are opportunities that will not only contribute to our two countries' mutual benefit, but will also create a solid foundation for regional development, aspirations for the Asean community, and progress and prosperity in the "Asian Century". The SCB presence will serve as a binding force that will link our two peoples, our businessmen and investors, and our two countries through financial facilities, great hospitality and excellent services.
As neighbours, our interdependency extends beyond geographic importance. Our economic interactions have jumped to an unprecedented level and will continue to do so in the future. While Thailand has performed well with respect to the economy, Myanmar has exhibited a leap towards democracy and a market economy. As both countries progressively advance, the degree of economic cohesion also deepens. How can the two countries complement each other and ensure mutual economic sustainability?
The answer lies in the compatibility of the two economies. Although they are distinct in respect of size, the discrepancy is a cornerstone of the "growing together" phenomenon. In terms of development, at the outset Myanmar will likely undergo structural change from agriculture to manufacturing-based industry. At the same time, in Thailand the process of industrial transformation is also at work. Thailand is currently facing the ordeal of the middle income trap, from wages to diminishing competitiveness. Thailand therefore has resolved to mitigate these problems by shifting its industrial focus towards a "value creation economy". Growth under the old formula is no longer feasible for us.
Thus, Thailand is departing from being a manufacturing and export economy and is passing the baton to emerging Myanmar. I envisage a host of Thai companies relocating their manufacturing plants to Myanmar, once the construction of industrial estates like Dawei and Thilawa are complete. Dawei is a shared vision of co-development between Thailand and Myanmar. It is expected to bring large-scale employment to Myanmar. Before long, Myanmar's national income will rise accordingly.
In addition Myanmar is likely to benefit from technology transfer and increased capital, as industrialisation brings machinery and technical knowledge from outside. Overall, the country's productivity will rise as a result, and so too its economic growth.
In terms of trade, on the one hand Myanmar helped prop up Thailand's exports during the global economic meltdown in 2008. In the aftermath of the financial crisis, Thailand was faced with a plunge in global demand. Enfeebled export industries were trying in earnest to survive. Cambodia, Myanmar, Laos and Vietnam (CLMV) have come to cushion our declining export figures. According to the Financial Times, "Exports to CLMV countries now account for nearly 8 per cent of Thailand's total exports - only slightly lower than the share of exports to the EU." Myanmar has increasingly become an important patron of Thai products. Thailand's exports to Myanmar soared by 30 per cent in 2011 compared to the previous year, a remarkable figure, indeed.
On the other hand, Thailand plays a major role in Myanmar's exports. In fact Thailand is Myanmar's largest trading partner, accounting for almost 40 per cent of Myanmar's total export volume. Thai demand for Myanmar products constitutes a sizeable share of Myanmar's national income, whereas Myanmar's growing import figures for Thai products displays a rebalancing of our terms of trade, which is a key ingredient for the sustainability of our economic interaction.
The above phenomena are a manifestation of our complementary characteristics. Thailand and Myanmar need to build on our intricately woven partnership and grow together in an inclusive fashion. Statistics and figures confirm that the deepening degree of our economic activities is by and large the foundation of mutual prosperity, as SCB has already put it eloquently in its slogan "Together We Can".
Pisanu Suvanajata is Thailand's ambassador to Myanmar. Remarks taken from a SCB gala dinner speech entitled "Myanmar and Thailand: Growing Together; Mutual Growth and Partnership."
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Article source: http://www.thethailandlinks.com/2012/11/28/bank-forges-myanmar-links/
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