The political situation in Myanmar continues to deteriorate. And tends to escalate continuously. This is not good for Myanmar’s economy itself. Of course, Thailand as a neighboring country will also be affected.
fast Kengchon, managing director of the research centerKasikorn Thai Unveiled with THE DEFAULT ASSET that short term. The economic and political uncertainty of Myanmar will affect Thailand in three main areas:
1. Cross-border trade in which Thailand is already trading with CLMV (Cambodia, Laos, Myanmar, Vietnam) and southern China. Myanmar’s economy was hit by COVID-19 as early as 2020, so 2021 continued to have additional political ramifications.
2. Myanmar migrants entering Thailand may be more difficult than usual. Because of the two factors mentioned above, this affects companies that employ workers.
3. Investment Dimension The investment industry in Myanmar is simple. They do not use very high technology like textiles which emphasize high manpower and require low cost. If the manufacturing base is relocated from Myanmar, it will likely relocate to Vietnam, Cambodia, Bangladesh and India, with Thailand not benefiting from the relocation.
While Thai companies investing in Myanmar for the long term are likely to plan to deal with various situations, they have no control over their investment intentions.
“In the short term until the end of 2021, the situation is difficult to predict. People need to be careful and closely monitor the harmful and worrying political situation in Myanmar. I saw news about product shortages. Increased product price The interruption of employment affects purchasing power What affects consumer goods ”
Amonthep Jawa La Senior Director CIMB Thai Bank Research Office opposite THE DEFAULT HEALTH that Thailand does not see Myanmar as a competitor. However, the economic and middle class growth in Myanmar will fuel the economy and support the growth of Thailand and the region.
The factors to monitor are whether the situation in Myanmar is advanced. There could be sanctions from the West such as the European Union (UN) and the US that could take the form of fines. Or in the case of an import ban on goods like textiles etc from Myanmar, which may affect some groups and some Thai industries involved in the supply of raw materials and machinery to Myanmar But today the share of exports from Thailand to Myanmar is always not very high yet.
However, the uncertain political situation in Myanmar has led many parties to believe that Myanmar’s GDP will increase from 6% to 2% in 2021 and needs to monitor the situation closely. In the second quarter of 21 in particular, the short-term effects will be seen in two areas:
1. Thai exports to Myanmar are mostly consumer goods such as food, beverages, utensils, etc. that can be affected.
2. Foreign direct investment (FDI), which provides the opportunity to watch Myanmar production emigrate from the country. Because the economy is slowing down, most of them are textiles. Which can move to Cambodia, Vietnam
Proofreading: Pasinee Permphanphong
