A great article I just found on the FT’s website talking about how the changes in the Mekong trade are affecting Thailand’s trade with its neighbours, the key points are as follows:
Credit-fuelled consumption booms in Laos and Cambodia have begun to soften, while Myanmar is diversifying its trading relationships. The result has been sharp falls in Thai exports of cars, machinery and even beverages.
- The fall in oil prices has been a factor. Petrol and other refined fuels make up a major Thai export to the Mekong and the value of these exports has weakened considerably. There has also been slower growth in exports of machinery and consumer goods.
- Infrastructure and logistics remain an issue, but in the case of Cambodia, new special economic zones with secure power supplies have been set up on the Thai border, resulting in a surge in Thai import growth.
- And after several false starts in the past five years, there is an emerging commitment among Myanmar authorities to develop new industrial zones and related infrastructure in Dawei, a coastal city in Myanmar’s south-east that is only 300km from Bangkok.
- Thailand’s status as the region’s production hub is unlikely to be challenged any time soon. But its weakening trade surplus and the siphoning off of parts of its supply chain to its neighbours will put growing pressure on the country’s political and business leaders to move the country up the value chain to stay competitive.