Re: modern highway R3a linking China, Laos and Thailand is expected to substantially raise economic prosperity in the region through increased trade and investments

On Mar 30, 10:42 am, Chim <Chi...@xxxxxxx> wrote:
Saturday March 29, 2008
A route to prosperity
The R3a highway holds plenty of promise, but certain issues need to be
sorted out first, writes Walailak Keeratipipatpong

The launch of the modern highway R3a linking China, Laos and Thailand
is expected to substantially raise economic prosperity in the region
through increased trade and investments.

Local businessmen estimate that the route, linking Thailand through
the yet-to-be-built Thai-Lao bridge in Chiang Khong district of Chiang
Rai and Houei Xai district of Bokeo province in Laos, will help
bolster Chiang Rai's trade with neighbouring countries by tenfold to
100 billion baht in the next decade.

The Thai government is also planning about eight billion baht worth of
infrastructure projects to foster further development, among them the
new bridge in Chiang Khong.

Significant improvements have been made to the infrastructure and
facilities initiated under the Greater Mekong Sub-region in recent
years, with the latest being the completion of the about 250
kilometres of the R3a highway, which will be opened officially on
Monday. While the development has delighted the business community,
question remain as to how all sides can make the most out of this
transport system to assist border trade.

Differences in customs procedures, as well as the unsettled issue of
revenue sharing from the fee collected for the use of the Thailand-
Laos bridge linking Mukdahan and Savannakhet, are likely to inhibit
the new route's potential. For example, cargoes from China to Thailand
would have to pass different customs checks, including those in
Vietnam and Laos. Such inconveniences and the time-consuming process
will definitely cost traders more.

Acknowledging the problem, the Chiang Rai Chamber of Commerce is
planning to propose a single-stop inspection system for goods shipped
through the R3a route.

The system requires all involved countries to harmonise their customs
procedures and private companies are being urged to team up and
register as a safeguard and risk-management measure.

The chamber's chairman, Pattana Sitthisombat, said that once
everything was sorted out, an inspection of shipments at the Chinese
distribution centre would be enough and the goods would not need to be
checked again in Vietnam, Laos, and Thailand.

Mr Pattana, who also heads the Quadrangle Economic Development
Business Committee that groups 10 provincial chambers of commerce in
the north of Thailand, suggested the government urgently address the
problem before R3a becomes widely used.

He said that the chambers would meet next month and draft more
proposals relating to logistics, tourism and trade to the government,
adding that the National Economic Social Development Board should
spearhead the issue.

The agribusiness conglomerate CP Group also voiced support for the
harmonisation of customs procedures since it could speed up and
facilitate farm shipments from country to country.

CP, which has invested extensively in the agricultural sectors in
Indochina for decades, still counters difficulties resulting from
imports and exports regulations.

CP Group vice-chairman Ajva Taulananda said that certificates of
origin would likely become a problem as well.

"The output harvested from the Ayeyawady area needs to have
certificates issued in Rangoon. Or the trucks that carry them need to
be changed when getting through Laos," said Dr Ajva, citing some of
the difficulties he foresaw.

At present, imports of production from crops that Thai companies
invest in neighbouring countries are prohibited.

"Customs harmonisation and eased imports regulations would even make
the region more attractive for trade and investments," he said.

Though the CP Group is not allowed to bring back the commodities it
planted in neighbouring countries to Thailand, it is still upbeat
about its contract-farming to promote planting of maize and soybeans
in the countries under the pact of the Ayeyawady-Chao Phraya-Mekong
Economic Co-operation Strategy (Acmecs).

"We could supply this produce to our animal-feed plants and feed CP's
poultry and shrimp operations that are spreading throughout the
region," he said.

According to Dr Ajva, CP has pioneered contract-farming to grow maize
on a total of 3.6 million rai in four Acmecs neighbours: Cambodia,
Laos, Burma and Vietnam.

It plans to increase the areas to one million rai each in Cambodia and
Laos, from 600,000 and 200,000 rai respectively.

As a former chairman of the Acmecs Business Council, Dr Ajva suggested
Thai businessmen use the Acmecs mechanism to expand trade and
investments in member countries, where farm businesses are a good
choice due to abundant and fertile land.

Besides maize and soybeans, rubber and palm oil have a prosperous
outlook. They could produce strong yields, given healthy soil with no
need for fertilisers."Even the flooded areas along the Ayeyawady River
have as high as one million rai of fertile land that that are perfect
for farming," Dr Ajva said.

In Thailand, an estimated 130 million rai of farm areas are
diminishing, giving way to economic expansion and urbanisation. Maize
plantation areas have shrunk markedly to only six million rai today,
and Thai companies should not overlook their neighbouring countries.

"What Thai investors should bear in mind is that they have to buy back
output at fair prices and provide technical assistance to show their
willingness in doing business there," he suggested.

Another leading businessman said Thais should not be too aggressive,
arrogant or greedy when doing business in the neighbouring countries.

"Instead, they should have morality and show their sincerity and
sensitivity on issues involving mutual benefits from joint ventures,"
suggested Jingjai Hanchanlash, a director of Loxley Co, who has played
a big role in developing the GMS scheme.

"Local partners prefer longer-term investments to short-lived ventures
where investors aim only to dig gold from their rich resources and
then leave," he elaborated.

Dr Jingjai, also former chairman of the GMS Business Council, expects
substantial foreign investments including those from Loxley, which
plans to set up a culinary school in Laos and open convenience stores
in Burma.

Asked about political uncertainties in these countries, he said:
"Though there was political unrest in some of these countries, it has
to date had minimal effects on business communities. The same goes for
Thailand, where changes in politics have no great impact on local
businesses."

will this new High Way pass through Luan Nam Tha ?



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