REGULATORY reforms in the Greater Mekong Subregion (GMS) are urgently needed to overcome the main obstacle to development of the pact, experts said recdently at the Euromoney Greater Mekong Investment Forum.
Kobsak Pootrakool, Bangkok Bank’s executive vice-president, cautioned that rules and regulations regarding each country’s import tariffs, coupled with complicated customs procedures, could prevent the six member countries from gaining the full benefit of integration.
Mr Kobsak said import tariffs imposed by governments in order to protect their own industries would be a major obstacle to trade flows in the region.
“If you want to boost the development of trade in the region, reforms of these rules and regulations are really needed,” he said.
Mr Kobsak admitted that several countries have started their reforms, but he said most were stalled in the policymaking stage.
With more than 300 million people, the GMS will let companies in the region and from abroad reap the benefits of special economic zones linking Thailand with its neighbors.
“The region is joining together with Thailand in the middle, and that will become a nicely integrated region that is competitive,” Mr Kobsak said.
The GMS consists of Cambodia, China, Laos, Myanmar, Thailand and Vietnam.
Stephen Groff, the Asian Development Bank (ADB) vice-president for East and Southeast Asia, said improving infrastructure would pave the way for greater regional trade.
“With lower trade barriers, the GMS is poised to become the next world manufacturing hub with a young workforce and growing middle class,” he said.
But the GMS still has an infrastructure deficit that needs to be addressed, not just through capital but also innovation, know-how and public-private partnerships.
Mr Groff said a foundation of good logistics networks and strong policies would need to be in place, along with streamlined rules and regulations for seamless trade.
Jingjai Hanchanlash, honorary chairman of the Greater Mekong Subregion Business Forum, said the new Asean single-window scheme would move goods more smoothly through the region.
The GMS will also enable companies in the automotive and agro-business sectors to expand their supply chain to neighboring countries, especially for labor-intensive production, before reimportation to Thailand for processing.
Another benefit expected to accrue is increased Chinese investment.
Manop Sangiambut, an executive vice-president of Siam Commercial Bank, said China would need to accelerate its overseas investment for the Chinese yuan to become a global currency.
Despite the economic slowdown in China, Chinese investment continues to grow.
In addition to infrastructure projects, other opportunities that could draw Chinese investors to the GMS include general manufacturing such as tyres and healthcare products.
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