THE Export-Import Bank of Thailand plans to open a representative office in Yangon by next month as Thailand and Myanmar share the goal of boosting bilateral trade and investment.
Exim Thailand announced yesterday that the licence for the representative office was obtained on Monday and it would apply for a trading permit from Myanmar’s Ministry of National Planning and Economic Development.
The office will work in collaboration with relevant Thai government agencies including the Board of Investment as part of the “Thailand Team” to support Thai trade and investment in Myanmar by facilitating both start-up and expansion endeavours of Thai entrepreneurs.
“Exim Thailand is ready to support Thai entrepreneurs wishing to expand their export markets or relocating their factories to Myanmar with a view to lowering their production and transportation costs and better serving their consumers, both Myanmar and foreign investors whose business operations in Myanmar have been on the rise,” said Exim Thailand president Pisit Serewiwattana.
“This is also a move in response to Myanmar’s burgeoning urbanisation and infrastructure and manufacturing development, while nurturing social and economic development of Asean as a whole.”
Thailand is one of Myanmar’s major trade partners and top foreign investors. However, Thai investment in Myanmar has grown slowly for the past two years compared with other countries’.
As of the end of 2015, Thailand’s aggregate investment in Myanmar totalled US$10.352 billion (Bt366 billion), up by a slight 2.5 per cent from $10.098 billion in the previous year.
Thailand had been the second-biggest foreign investor in the country until 2014, trailing only China. In 2015, the ranking fell to third, taken over by Singapore, whose investment jumped significantly to US$11.82 billion compared |with $4.7 billion in the previous year.
Bilateral trade between Thailand and Myanmar has also fluctuated. In 2015, trade value was down to $7.74 billion from $8.15 billion in the previous year. But both countries aim to increase it to between $10 billion and $12 billion this year.
In an interview late last year, Pisit said: “As Myanmar’s economy is growing rapidly amid greater political stability, there are abundant opportunities for trade and investment. Our main goal in establishing the representative office fits into our mission and strategy to support Thai businesses to involve in international trade as well as to enhance Thai investors’ competitiveness abroad.”
According to Pisit, Exim’s rep office should contribute to Exim Thailand in terms of information and services for the bank’s existing and potential customers.
“We believe the representative office shall be able to help initiate and close financial transactions for Exim Thailand through Exim Thailand’s current facilities, namely overseas investment financing, trade financing, investment insurance, and export credit insurance.
The forecast for loans outstanding for Exim Thailand in Myanmar is expected at around Bt3 billion in 2017 and to grow by 10 per cent each year thereafter,” he said.
At the office, customers will be able to seek consultation services and join business-matching events. They could also tap in-depth information, which includes data on promising local companies.
The office also plans to work closely with Thai and Myanmar authorities, the private sector, and financial institutions to assist Thai businesses that would like to trade and invest in Myanmar.
Enormous opportunities are seen in the areas of construction, infrastructure, consumer goods, franchising and tourism (see graphic). Meanwhile, Thai companies should benefit greatly from huge demand for electricity in the country. There is also ample growth potential in agricultural and agro-processing industries.
Pisit noted that newcomers need in-depth information on Myanmar counterparts, and in this respect Exim Thailand hopes to meet this short-term challenge.
“In the long term, we believe that after Myanmar’s legal frameworks, financial system and banking system have been developed, Thai companies should be able easily to increase trade and investment transactions in the future,” he stressed.