Regional economic cooperation and coordination between Thai government agencies (03-05-07)
By Jon Fernquest[Introduction|Vocabulary|Article]
[Reading Questions|Answers]
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Schemes for economic cooperation and inter-regional trade between Thailand and her neighbors in Southeast Asia are difficult for two reasons.
First, coordination between the governments of individual countries each with their own agendas and goals, can be difficult.
Second, within each country coordination between government agencies can be difficult.
Today's article deals with the coordination problems that one scheme for regional cooperation, known as Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), has encountered along the way.
Please note that information necessary to answer the questions is often scattered throughout the article, so you may have to skim read the article first and then do a more detailed reading.
Stategies for regional trade
In another related article, strategies for developing regional trade in the GMS region are detailed by Ake-Aroon Auansakul of the International Institute for Trade and Development (ITD) at Chulalongkorn University in Bangkok. (Bangkok Post, 03-05-2007)
Currently, trade between Greater Mekong Subregion (GMS) countries represents only around 12% of the total trade with the rest of the world.
As the four less-developed countries in Asean: Cambodia, Laos, Myanmar-Burma, and Vietnam
(CLMV) open up their economies and began to trade with the rest of the world regional trade will become more important.
Four strategies are essential to increasing inter-regional trade in the long-run:
a. Infrastructure development
b. Trade facilitation (speeding up trading)
c. Trade policy, rule and regulation improvement:
d. Productivity enhancement
Infrastructure development includes developing "transport, communication and information technologies that make trading easier," which includes the "construction and improvement of roads, bridges, logistics, transport and communication networks and public utilities."
Research and development and language proficiency are aspects of educational infrastructure that need to be further developed.
Trade facilitation includes: improved customs inspection and clearance, regional SPS, food-safety regulations, product-quality standards, harmonising rules of origin and mutual recognition agreements (MRAs), network for private sector co-operation, and linking IT centres for trade and investment information exchanges.
Trade policy, rule, and regulation improvement includes: reduction of tariffs and non-tariff barriers, multilateral, regional and/or bilateral trade agreements, improved rules and regulations that promote investment by the private sector.
Production-efficiency enhancement is necessary for more developed Southeast Asian countries like Thailand to remain competitive when markets are opened to imports from Laos, Burma, and Cambodia with low labour costs.
Reading Questions
Here are some questions to guide your reading (See answers at end):1. What countries are involved in the ACMECS scheme?
2. How would you pronounce the acronym ACMECS ?
(Give some suggestions, Speculate)
3. What do the letters in the acronym ACMECS mean?
4. What is the meaning behind the long name of ACMECS (Ayerawaddy-Chao Phraya-Mekong Economic Co-operation Strategy) ? Explain.
5. Who initiated the ACMECS scheme?
6. What does ACMECS hope to achieve?
7. How does ACMECS seek to achieve its goal?
8. Is a lot of farm land involved in the scheme? Where is the farm land? Can you find a map online that shows roughly where this land is located? (Note: Research outside the article required here)
9. What crops are they farming? What are these agricultural products used for?
Are they used in Thailand or exported? (Note: Research required)
The crops involved in the scheme are maize, mung and castor bean.
10. What problem did farmers participating in the scheme encounter recently?
11. What Thai government agencies are involved in, affected by, or concerned about the scheme?
12. Why do you think the problem may have occured?
(Express opinion, speculate, and debate)
13. Are the farmers having much success resolving the issue with government officials?
Bangkok Post Article: 02-05-2007
CONTRACT FARMING Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) Govt urged to lift tariffs on Burma cropsSUPAMART KASEM
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The scheme aims to boost the border economy through the tariff-free arrangement under the regional scheme called the Ayerawaddy-Chao Phraya-Mekong Economic Co-operation Strategy (ACMECS), which includes Thailand, Burma, Cambodia, Laos and Vietnam.
But the project's prospects look to have dimmed as farmers in the scheme have had tariffs imposed on them when they import crops into Thailand, said Ruengchai Suwan, a member of the contract farming committee overseeing imports.
Under the project supervised by the National Economic and Social Development Board (NESDB), farmers are allowed to farm along the border on Burmese land and import produce to Thailand without having to pay tax.
The NESDB is responsible for asking the cabinet to waive tariffs on contract farming crops.
"The NESDB promised several months ago that it would ask the cabinet to relax the tariffs. But when we imported the crops, we got a letter from the customs authority," Mr Ruengchai said.
The farmers could not afford to pay the expensive tariffs and if their complaints continued to fall on deaf ears, they would terminate their investments in the project, Mr Ruengchai said.
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The project was initiated by ousted premier Thaksin Shinawatra, who wanted to boost border trade and the supply of agricultural produce across the borders of Thailand, Burma, Cambodia, and Laos.
The Thai government also hopes that the joint project will help solve the problem of illegal foreign labourers as they will be offered more jobs along the border.
Tak Governor Chumporn Polrak said the delay in lifting the tariffs could affect crop farming in the 2007-2008 farming year and have repercussion on other projects between Thailand and Burma.
Vocabulary (in discussion above)
International Institute for Trade and Development (ITD) - training and research on trade and development in collaboration with the Thai government and United Nations Conference on Trade and Development (UNCTAD), goal is to "achieve optimal benefits from the dual processes of globalization and liberalization and enhance the potential and capacity of human resources." (See website)
contract farming - when farmers farm for a larger agribusiness under a contract (rather than selling themselves on the market) (Read paper on contract farming and a book chapter)
Ayerawaddy-Chao Phraya-Mekong Economic Co-operation Strategy (ACMECS) - organisation for economic cooperation between Thailand, Laos, Myanmar, Vietnam, and Cambodia founded in 2003, adopted the Bagan Declaration pledging to "cooperate in five priority areas of cooperation, and endorsed the Economic Cooperation Strategy Plan of Action, under which 46 common projects and 224 bilateral projects were listed for implementation over the next ten years." (See website and page at Thailand's Foreign Ministry)
tariffs - tax collected by the government on goods coming into the country (See Wikipedia)
* lift tariffs
* relax the tariffs
an incentive - a reward to encourage people to do something
vowed to do x - make serious decision to do x
prospects - chances of being successful
dimmed prospects - unlikely to be successful
National Economic and Social Development Board (NESDB) -
waive - give permission not to follow a regulation or law, say that
waive tariffs - give permission not to pay tariffs
the customs authority, customs - government agency collecting taxes on goods coming into the country and also preventing illegal goods from entering the country
complaints fall on deaf ears - no one acted on their complaint to correct the problems
maize - corn (See Wikipedia)
mung beans - small free round beans commonly used in Chinese cuisine and in soup (See Wikipedia)
castor beans - used to make castor oil used to make "soaps, lubricants, hydraulic and brake fluids, paints, dyes, coatings, inks, cold resistant plastics, waxes and polishes, nylon, pharmaceuticals and perfumes. In internal combustion engines, castor oil is renowned for its ability to lubricate under extreme conditions and temperatures, such as in air-cooled engines...its use is...restricted to engines that are regularly rebuilt, such as motorcycle race engines." (See Wikipedia on castor beans and castor oil)
Mae Sot - the largest city on Thailand's northwestern border with Burma, adjacent to the Karen State of Burma (See Wikipedia)
Phop Phra - an administrative division in Tak province located just to the south of Mae Sot city (See Wikipedia on Phop Phra)
Mae Ramat - an administrative division in Tak province located just to the north of Mae Sot city (See Wikipedia on Mae Ramat)
x has repercussions - bad or unpleasant things happened after x happened
Answer Key:
1. What countries are involved in the ACMECS scheme?
ACMECS includes Thailand, Burma, Cambodia, Laos and Vietnam, the countries in mainland Southeast Asia.
2. How would you pronounce the acronym ACMECS ?
(Give some suggestions, Speculate)
Since the pronunciation is not given,
we have to guess, for example:
ack - me - s
"ack" as in hack, pack, stack
3. What do the letters in the acronym ACMES mean?
A - Ayerawaddy or Irrawaddy River in Central Burma
C - Chao Phraya River
M - Mekong River
E - Economic cooperation
S - Strategy
4. What is the meaning behind the long name of ACMES (Ayerawaddy-Chao Phraya-Mekong Economic Co-operation Strategy) ? Explain.
Economic cooperation among countries located along the three important rivers in the name.
5. Who initiated the ACMES scheme?
Ex-Prime Minister Thaksin Shinawatra.
6. What does ACMECS hope to achieve?
"Boost the border economy."
"The project was initiated by ousted premier Thaksin Shinawatra, who wanted to boost border trade and the supply of agricultural produce across the borders of Thailand, Burma, Cambodia, and Laos."
7. How does ACMECS seek to achieve its goal?
By eliminating tariffs (taxes) on agricultural imports grown along the border.
8. Is a lot of farm land involved in the scheme? Where is the farm land? Can you find a map online that shows roughly where this land is located? (Note: Research outside the article required here)
("...on areas totalling 40,000 rai along the Burmese border opposite Tak's Mae Sot, Phop Phra, and Mae Ramat districts.")
9. What crops are they farming? What are these agricultural products used for?
Are they used in Thailand or exported? (Note: Research required)
The crops involved in the scheme are maize, mung and castor bean.
10. What problem did farmers participating in the scheme encounter recently?
They had to pay tariffs (taxes) after they were told they didn't have to pay them.
11. What Thai government agencies are involved in, affected by, or concerned about the scheme?
a. The Customs Department collected the tariffs.
b. The project was supervised by the National Economic and Social Development Board (NESDB).
c. The local provincial government of Tak wants a resolution of the problem
("Tak Governor Chumporn Polrak said the delay in lifting the tariffs could affect crop farming in the 2007-2008 farming year and have repercussion on other projects between Thailand and Burma.")
12. Why do you think the problem may have occured?
(Express opinion, speculate, and debate)
There may have been a lack of coordination between the government agencies
involved.
13. Are the farmers having much success resolving the issue with government officials?
No, they are not. They claim that government officials are not listening to them
and have threatened to pull their investments from the scheme.
("The farmers could not afford to pay the expensive tariffs and if their complaints continued to fall on deaf ears, they would terminate their investments in the project, Mr Ruengchai said.")
