Strengthening ties with Myanmar - Thai way or ASEAN way

Updated On: Aug 11, 2006

As Myanmar’s other ASEAN neighbours grow increasingly vocal in their criticism of MyanmarMyanmar should take comfort in Thailand’s recent gestures for strengthening bilateral economic ties.

Senior General Than Shwe has also provided a response to increasing ASEAN’s pressure on Myanmar by stressing on ASEAN day (8 August) the importance of upholding ASEAN’s principles of avoiding interference in other countries’ internal affairs.

More details of Thaksin’s recent trip to Myanmar have been made known this week as new economic deals with Myanmar have been announced or explained.Thailand is Myanmar’s largest trading partner, accounting for US$1.9 billion or about 38% of Myanmar’s foreign trade in 2004-5. 

On Tuesday 8 August, the Export-Import Bank of Thailand (Exim) has publicly defended its decision to grant Myanmar a loan of Bt 4 billion. This loan was officially granted in June 2004 to Myanmar Foreign Trade Bank (MFTB) for road construction and infrastructure development. The loan would be repayable over 12 years. Exim argued that its loan had helped to create jobs and income for 16 Thai export firms and boosted ties with a needy neighbour. The money was used by MFTB to allocate loans to various Myanmar agencies to procure capital goods and services from Thailand. Exim did not release the names of the firms which dealt with theMyanmar agencies.

Exim’s statement was a response to opponents to the loan who claimed that Thaksin’s family was among those who benefited from the loan and that the loan was related to Thaksin’s visit to Myanmar.

Top on the agenda of Thaksin’s visit was energy cooperation. This was revealed by Thailand’s Energy Minister Viset Choopiban who said that Thaksin tried to persuade Myanmar to give an exclusive gas concession in the A-1 oil-field in the Bay of Bengal to PTT Exploration and Production Plc (PTTEP). This meant thatThailand would now join the race with China and India for exclusive rights to obtain the reserves in the Gulf of Bengal

PTTEP had already secured a concession to explore M-9 oilfield in Myanmar where preliminary surveys had showed that there was significant gas and oil reserves. Currently, about 1 billion cubit feet of gas is piped from Myanmar’s offshore reserves in the Andaman Sea everyday. Thailand is also providing funds to construct dams in the northwest of Myanmar on the Salween River.

Timber trading was another issue discussed by Thaksin. Thaksin was successful in persuading Myanmar to resume timber trading with Thailand. However, this move has triggered concerns about the impact on the environment and the abuse of ethnic minorities in Myanmar. Panithi Thangpati, Chairman of the Tak Chamber of Commerce, voiced concern that loggers might cut the trees in Thai forests but brand them as imported. 

Thaksin’s trip to Myanmar has since been followed by Thailand’s Armed Forces Chief, Supreme Commander General Ruengroj Mahasaranond who left for a 3 day working trip in Myanmar on Monday, 7 August. General Ruengroj said that his trip was unrelated to Thaksin’s recent trip to Myanmar. Instead, the aims of his visit would be finding ways to boost positive relations between senior officials working along the border and solving the problems of narcotics smuggling and illegal labour. He would also visit Senior General Than Shwe, Chairman of the State Peace and Development Council at Myanmar’s new administrative capital of Naypidaw.

Myanmar has responded to Thailand’s economic interests by establishing another border trade zone in Myawaddy, a border town in Southeastern Kayin state, bordering Thailand’s Maesot. This will be the second largest trade zone in Myanmar. The largest trade zone is the Muse 105th Mile Border Trade Zone borderingChina’s Ruili in Yunan Province which opened in April 2006.


Thailand Export-Import Bank of Thailand Extends BT4 BN Loan to Myanmar (Burma) (Thai Press Report, 10 August 2006)

Exim Defends Bt4-bn Loan to Rangoon (The Nation, 9 August 2006)

NGO Urges Exim Bank to Clarify Loan to Myanmar (FnWeb.com, 9 August 2006)

Myanmar to Set up Second Largest Border Trade Zone in Myawaddy (Xinhua, 9 August 2006)

Myanmar Stresses Upholding of ASEAN Own Principles (Xinhua, 8 August 2006)

Thailand Asks Myanmar (Burma) for Exclusive Rights to Develop Natural Gas Fields (Thai Press Reports, 8 August 2006

ThailandMyanmar (Burma) Agrees to Resume Timber Trading With Thailand (Thai Press Reports, 8 August 2006)