Greater Mekong Subregion - A New Economic Frontier
While the world economy still struggles, the Greater Mekong Subregion (GMS) economies have grown approximately 7% per year during the last decade. GMS comprises of Thailand, Vietnam, Myanmar, Cambodia, Laos and the Chinese provinces of Guanxi and Yunnan. It was formed 20 years ago with three Cs as its guiding principles – Connect, Community and Competitiveness. It is now drawing worldwide investors to explore this particular area.
As a part of the GMS, Thailand will benefit from potential of its neighbors both in direct investment and capitalization on Thailand’s distinctive edges in return. Thailand has transportation and infrastructure system such as ports, airports, roads and rail links serving as logistics channels among GMS countries.
Furthermore, with management expertise in small and medium enterprise (SMEs) and well-established family enterprises, Thai companies utilize plenty human and natural resources by investing in neighboring countries.
Positive factors such as sanctions lifted on Myanmar and cooperation with Cambodia, Myanmar, Laos and Thailand to develop special economic border zones widen the economic opportunities.
GMS countries are attracting foreign investments through incentives. For Example, Cambodia allows tax holidays for up to 10 years. Myanmar offers investment incentives in agriculture, tourism and real estate.
The GMS countries will be part of a greater regional economic group, the AEC (Asean Economic Community) in 2015. At that time trade and investment opportunities will increase tremendously. AEC members have planned or built facilities and infrastructure including major roads, railways, ports, air transport links, communications networks, gas pipelines and power stations.
Technology transfer, market access and know-how from more developed members of the AEC, such as Malaysia and Thailand, will be provided to other members in the same way that Japan, China and Taiwan helped with the early industrial development of Southeast Asian countries.
More cooperative agreements will occur to promote the products of the region. Major rubber producers – Indonesia, Thailand and Malaysia- have cooperated for many years. New cooperative agreements will be expanded in other sectors such as rice, cassava and textiles.