In line with Myanmar's expected growth, Thai shipments to the country should double by 2015, in time for the Asean Economic Community (AEC), a study by University of the Thai Chamber of Commerce (UTCC) found. Aat Pisanwanich, director of the UTCC's International Trade Studies Centre, said exports to Myanmar would show strong growth this year due to higher demand for consumer goods and the increase in foreign direct investment (FDI) in that country. Meanwhile, the Bank of Thailand and the Central Bank of Myanmar (CBM) have inked an agreement for technical assistance. On average, Thai exports to Myanmar should grow by 27.1 per cent per year, with export value rising to US$14.2 billion (Bt446 billion) by 2015 from $7.01 billion in 2011. The export of industrial goods will enjoy significant growth, with their proportion of total exports rising from 72.7 per cent last year to 74.3 per cent in 2015. The value of industrial products exported will rise from $5.09 billion to $10.5 billion, showing average growth of 27.7 per cent a year, up from the current 19.8 per cent a year.
The top products being shipped to Myanmar include machines, fuel, vehicles, plastic, electrical appliances, rubber and rubber products, chemical products, steel and iron, and pharmaceutical products. Aat predicted that demand for products such as cotton, aluminium, ceramics, cement, copper, furniture, textiles, leather goods, and boats and ships would increase strongly in Myanmar because of strong growth in several industries thanks to rising FDI. However, products that might be more difficult to export to Myanmar include footwear, soap, detergent, garments, books and pictures, because the country has its own factories to match domestic demand.
Agricultural exports to drop
The shipment of Thai farm goods to Myanmar will also drop in comparison with industrial goods because the country is expected to focus on developing its agricultural sector. Export of agricultural goods from Thailand to Myanmar is expected to drop from 27.3 per cent of the total to 25.7 per cent by 2015. However, the export value of Thai farm goods sent to Myanmar has shown a 0.9-per-cent annual increase from $1.9 billion in 2011 to $3.64 billion. The agricultural products that will continue enjoying stronger export growth include beverages, salt, soil, rock, seasonings, dairy products and cooking oil. Such products as fruit, meat, cocoa and coffee are expected to face slower growth because of competition and expanding farming areas in Myanmar. Aat said Thai enterprises had greater opportunities to invest in Myanmar now that the government is starting to change its rules and regulations. Since the government is also extending its tax waiver from three to five years, Thai enterprises should consider expanding in the Myanmar market, he advised. Also, he said, Myanmar's large population will help Thai businesses deal with the shortage of labour.
Other businesses that have strong growth potential in Myanmar include tourism, logistics, textiles and garments, processed farm goods, construction and services. In a related development, under a memorandum of understanding signed by BOT Governor Prasarn Trairatvorakul and CBM governor Than Nyein, the Thai central bank will provide training to staff at its Myanmar counterpart, which should support the development of the neighbouring country's financial system and economy as well as the AEC. According to a statement by the BOT, the MoU names the Thai central bank as the official provider of such assistance, while it can also seek support from local and international organisations on policy setting, experience exchanges, consultation, field trips, and scholarships. The BOT will also help train the CBM on supervision of financial institutions, payment systems, banknote management and human-resource development.