If Myanmar holds firm to their political and economic reforms, it will pave the way for sustainable relations with the US and the rest of the world. It would give Myanmar greater leeway to undertake economic expansion and afford them a greater presence in the global community. KResearch holds the view that fortified Myanmar-US economic ties will certainly be a plus for Thailand. With brighter prospects of Myanmar economic growth and exports, demand for Thai shipments will likely increase in tandem. Myanmar will not likely become our competitor in the US market, though, since their most significant exports differ from ours.
The Myanmar economy should see formidable growth of at least 6 percent, p.a., until 2015, driven mainly by rising foreign direct investment (FDI), consumer spending and domestic investment. We forecast that Thai exports to Myanmar in 2012 may reach THB94.5 billion, growing at least 10 percent YoY, possibly reaching 15-20 percent in the foreseeable future.
A bright future is expected for our border trade with Myanmar via the Mae Sot-Myawaddy checkpoint, a key contributor for Thai exports into Myanmar. In 2012, our shipments via this channel are likely to reach THB37 billion. We also plan to open more checkpoints with Myanmar to facilitate bilateral trade. In terms of investments, however, close attention should be paid to progress of the Myanmar's new investment law, now under review, to draw greater FDI.
Myanmar investment liberalization, plus the opening up of access for Myanmar products to large economies like the US and EU will present opportunities for Thai exporters, by using Myanmar as a manufacturing base. Aside from reduced costs of production, we would also benefit from substantial trade privileges granted by large economies to Myanmar shipments. Nonetheless, caution should be exercised toward Myanmar's fledgling reform process that may come with challenges. More time is therefore needed for Myanmar to win greater confidence of the international community.
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