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Myanmar will host Nov. 11-12 the first meeting of the Economic Cooperation Strategy (ECS) trading bloc, a Thai initiative designed to deepen trade and economic ties between Thailand and its main neighbors on the Indochina Peninsula -- Myanmar, Cambodia and Laos. Although the three countries are not exactly a "who's who" list of global economic players -- or even of regional players -- Thailand's project to develop closer trading ties with them highlights its continued emergence as a regional power with one of Asia's most promising economies.
Bangkok is particularly well positioned geopolitically to expand its regional influence in a way that will help solidify its economic fortunes. Thailand's current efforts -- such as the ECS and various free trade agreements -- will help provide it with cheap raw commodities and deeper trade links, making it an increasingly popular manufacturing base as well as a hub for Pan-Asian trade. These efforts will help attract new investment and drive Thai markets, giving them substantial long-term growth potential.
Source of Inputs, and More
One of the ECS's main goals is to reduce -- eventually to zero -- the import tariffs between the four member countries and to increase Thailand's import quotas. In effect, Thailand will be able to more cheaply import various commodities as raw material from its poorer neighbors to produce goods that it then will export.
The production potential of Myanmar, Cambodia and Laos is far too low to allow for significant domestic production expansions. Instead, the poorer three will benefit from increased sales of raw materials and cheap goods to their richer neighbor -- as well as increased aid for infrastructure development -- while Thailand will have a significant pool of cheap resources upon which to further expand its manufacturing base.
Cambodia suffers from a very poorly educated population and an almost complete lack of infrastructure -- not to mention any kind of industrial base. First and foremost, Cambodia needs cash, and Thailand can give it in exchange for commodities such as cheap hydropower, timber, rubber and iron ore. Thailand and Cambodia reportedly will sign a natural gas and hydropower deal at the summit.
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