'Too few trickle-down benefits' in SEZ plans

[webfact]

'Too few trickle-down benefits' in SEZ plans
The Nation

BANGKOK: -- This is the third in a series on special economic zones, which the government is promoting for deepening economic integration in the Asean Economic Community and border development, The Nation's Wiraj Sripong reports.

THE special economic zones (SEZs) in border provinces, as heavily driven by Prime Minister General Prayut Chan-o-cha's government, would not fully trickle down benefits to local industries - and to small and medium-sized enterprises (SMEs), in particular - according to the business community in one of the selected areas.

The government has designated border areas in the provinces of Tak, Mukdahan, Sa Kaeo, Trat and Songkhla for the first phase of SEZ development.

Last week, the Policy Committee on Special Economic Zone Development selected another five provinces - Kanchanaburi, Chiang Rai, Nong Khai, Nakhon Panom and Narathiwat - for the second phase.

Akom Termpitayapaisit, deputy transport minister and secretary-general of the Office of the National Economic and Social Development Board, said border areas such as Tak's Mae Sot district and Sa Kaeo's Aranyaprathet had the potential to boost border trade activities and connectivity with neighbouring countries.

Agriculture, logistics, industrial estates and tourism will be promoted as key economic activities in the zones, he said.

Mae Sot district, which borders Myanmar, has the potential to develop such sectors and welcome investment for high-technology industries, he said.

However, the current size of Mae Sot's airport could no longer support a huge flow of traders, investors and tourists, and therefore needs to be expanded as basic infrastructure for the zone, he added.

"Many people travel to Mae Sot for the purpose of going to Myanmar and Thailand's border area," he said during an interview with The Nation.

The SEZs will help to improve infrastructure in the area, paving the way for labour-intensive and heavy industries such as electronics to be established, said the deputy minister.

Meanwhile, Prasert Juengkijrungroj, secretary-general of the Tak Chamber of Commerce, commented that many things remained to be done to achieve the real goal of the SEZ in the border district.

"The government has to be clear about the industrial sectors that it wants to establish in the area," he said.

It should start by developing labour-intensive industries that already exist and boosting border trade by strengthening the capacity of Thai SMEs, he suggested.

The government should take advantage of the surge in border-trade activities, he added.

According to records kept by Mae Sot Customs House, the district experienced rapid cross-border commercial growth with Myanmar last year, when bilateral trade grew to Bt55 billion from Bt41 billion in 2013.

Thailand imported farm products and many raw materials such as minerals, marl clay for the ceramics industry and wood from Myanmar, Prasert said, adding that these items were subject to import restrictions.

The chamber of commerce chief stressed that incentives granted by the government to promote the special zone might not benefit local investors, and that the tax incentive from the Board of Investment, for example, would not be profitable to them at all.

He said the incentives had been designed to serve strategic industries rather than local ones.

Another issue that worries local people in Mae Sot is the level of pollution, which would increase as a result of intense and heavy industrial activity in the SEZ.

Developing linkage

Prasert also said that while Mae Sot was not far from Myanmar's chief business city and former capital, Yangon, Prayut's government should pay more attention to easing cross-border regulations and the construction of roads to facilitate trade between the countries.

Akom, meanwhile, has unveiled several government plans to develop linkages, |which will be implemented under the SEZ project.

The main focus will be on the realisation of basic infrastructure such as roads, bridges and railways, boosting the connectivity between each SEZ and the economic zones in the Kingdom's neighbours, he said.

For the area of Mae Sot, the government has already commenced construction of the second Thai-Myanmar bridge across the Moei River, linking Mae Sot and the town of Myawaddy.

This is part of a wider plan to link Thailand to Myanmar's growing market, said Akom.

As for the development of the SEZ project in Aranyaprathet, he said the government had designated the area for basic activities in the automotive, electrical and electronics industries.

Logistics will also be at the heart of the Aranyaprathet SEZ due to its proximity to Cambodia, he added.

Source: http://www.nationmultimedia.com/politics/Too-few-trickle-down-benefits-in-SEZ-plans-30256548.html


-- The Nation 2015-03-23

[Thai at Heart]

With a minimum wage of 6gbp a day, I think its pretty obvious why there aren't many trickle down benefits from investment.

The benefits trickle 90% to the owners.

[maidee]

trickle down ...

the rich handing out money with the left hand and receiving it in their back pocket with the right hand

[Srikcir]

The Junta's SEZ plans call for trinkle-down benefits.

You know you're benefitting by the wet feeling you have in your legs.

The one major hurdle for Thailand is that it has a minimum daily wage which is much higher than the average daily wage of the other ASEAN countries. But I believe the Junta has previously announced in economic development of other parts of Thailand it will not honor the bt300 daily minimum wage - that the wage should be appropriate to the economic conditions of the area's labor market. Looks like SEZ business will need to plan on nonThai labor only.

Edited March 23, 2015 by Srikcir

[Thai at Heart]

The Junta's SEZ plans call for trinkle-down benefits.

You know you're benefitting by the wet feeling you have in your legs.

The one major hurdle for Thailand is that it has a minimum daily wage which is much higher than the average daily wage of the other ASEAN countries. But I believe the Junta has previously announced in economic development of other parts of Thailand it will not honor the bt300 daily minimum wage - that the wage should be appropriate to the economic conditions of the area's labor market. Looks like SEZ business will need to plan on nonThai labor only.

Not true. Thailands minimum wage is only markedly higher than Laos, Cambodia, Vietnam and Burma.

Of course, Thailand has always taken great pride in pointing out that it is considerably smarter, better educated and more prosperous than these countries, so shall it be.....

[Strangebrew]

Guess this mean tier 3 here to stay.