Myanmar coup to have “minimal” impact on Thai economy, government says
The Myanmar coup was expected to have minimal impact on the Thai economy, the government said Wednesday, but the investments in the Dawei Special Economic Zone will have to be put on hold for now.
The coup “should not be a problem” as cross-border trade, which was temporarily halted on Monday, had already resumed, Deputy Prime Minister and Minister of Labour Supattanapong Punmeechaow said after a meeting with Prime Minister Prayut Chan-ocha.
However, Thailand’s investments in the Dawei development project will be affected.
“The investment project in Dawei will have to be halted for now and talks will resume once there is a new government in Myanmar,” he said.
“We have to pay attention on Dawei as the Thai government have to take care of Thai investors who are investing there.
“If they have done nothing wrong and they did not break the law but they are receiving unfair treatment then we have to listen to them and try to create an understanding,” he added.
The government’s decision to halt investments in Dawei came after the Dawei Special Economic Zone Management Committee last month told Bangkok-listed Italian Thai Development (ITD) that they will terminate seven concession agreements with companies that ITD partially own.
The PM said last month that he had instructed the minister of labour, who is also chairman of the Thai-Myanmar Joint High-Level Committee for the special economic zone, and Arkhom Termpittayapaisith, the finance minister who is also the chairman of Joint Coordinating Committee, to negotiate with Myanmar authorities on the termination of these concessions.
Apart from the deals with Thai companies, Myanmar’s previous government was also seeking a loan worth 4.5 billion baht from Thailand to build a 139-kilometre road from the Ban Phu Nam Ron border in Kanchanaburi to the Dawei project.
Supattanapong said that with the “changes” in Myanmar, the Thai government cannot press them on the ITD issue until a new government is formed.
He said this is a matter for the private sector but the government must facilitate the deals by making sure that everything is in accord to the ASEAN Charter.
He did not comment on other negotiations and deals on Wednesday but he did say last month that the Thai government was committed to offering the loan for the road.
Apart from Thai investments in Dawei, the University of the Center for International Trade Studies at the University of the Thai Chamber of Commerce (UTCC) said on Monday that the declaration of the state of emergency in Myanmar could contribute to loss of 50 million baht in cross-border trade per day.
They expect the disruption in border trade caused by the coup to last for at least 30 days.
There are currently 21 checkpoints at the border between Thailand and Myanmar but because of the coronavirus outbreak, only three of them are now open. The Mae Sai, Mae Sot and Ranong checkpoints have an accumulated trade value of around 256 million baht per day in 2020, according to the data from the Ministry of Commerce.
However, the concern from the academic at the UTCC was already played down by Somdet Susomboon, the Director General of the Department of International Trade Promotion, who said on Tuesday that border trade had already resumed at all available checkpoints while the phone and internet connections have already been restored.
Not only that, he also said that that Myanmar people have been buying more products from Thailand since the coup on Monday, especially food and water, to stock up at their homes.
“There will be no long-term repercussion as Myanmar people will continue to have the demand for Thai products, especially for consumable goods,” he added.
Currently the total trade value between Thailand and Myanmar has amounted to 197.79 billion baht in 2020 with exports from Thailand to Myanmar accounted for 113.94 billion baht of the total trade.
Most of the products that are being exported to the neighbouring country include drinks, gasoline, machines, chemicals, steels, cosmetics, soaps, automobiles, motorcycles, wheat products, processed foods and textiles.