Spatial Economic Initiatives in Thailand

Last week I attended the International Conference on Thai Studies (http://www.icts13.chiangmai.cmu.ac.th/) held at the International Conference Centre in Chiang Mai (http://www.cmecc-mice.com/).

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(Walden Bello acting as discussant).

My paper was “Spatial Economic Initiatives in Thailand.”

Abstract

In common with other mainland Southeast Asian countries, Thailand has historically been dominated by a primate city, Bangkok, in which all principal economic, social, political, religious and monarchical institutions have been concentrated. Awareness of the problems that this concentration has caused has been recognised in developmental plans since the 1950s, when efforts at decentralization were first introduced. Assisted by improvements in transportation infrastructure made during the Cold War period, initiatives such as the creation of the Northern Region Industrial Estate have been intended to develop other parts of the country to modify migration flows and reduce income inequalities which have become more marked through the years. The Board of Investment has been instrumental in offering incentives to foreign and domestic investors in industrial estates to the north of Bangkok in Pathum Thani and Ayutthaya, where good roads link the places of production with the markets of the capital and the main port of Laem Chabang. Currently, the border special economic zone policy aims, insofar as its objectives have been coherently stated, to promote development in border regions which can take advantage of cross-border trade and investment. In these efforts, success has usually been achieved when public sector agencies have provided what private sector interests wanted and this is likely to continue in the future. This paper explores the various economic spatial initiatives that have taken place in the country and attempts to analyse when and where these have been successful and what lessons failures have been able to provide.

Keywords: Thailand, special economic zones, economic geography, regional development

Thailand’s Border Special Economic Zones and Precarious Life and Work

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I have returned from the NUS workshop on Living in an Age of Precarity, which was very successful.

This is the abstract of my presentation.

Thailand’s Border Special Economic Zones and Precarious Life and Work

John Walsh, Shinawatra University

ABSTRACT

Thailand’s proposed new special economic zone (SEZ) policy calls for more than ten projects in border areas across the country. After the military coup in 2014, it was stated that the SEZs would be used as internment camps for migrant workers as part of the campaign against the poor initiated by the junta. That policy has now changed to using day migrants in value-adding activities that will help lift Thailand out of the Middle Income Trap. These top-down approaches instil little confidence that genuine market demand or complementarity of production assets will lead to thriving SEZs with skilled and well-rewarded employees. Indeed, the presence of SEZs located across the Lao and Cambodian borders suggests there will be over-capacity of industrial space and, hence, under-utilisation of sites and the driving down of costs, including wages. Existing SEZs are already lying unused or, as in the case of Boten, stand as tribute to the damaging effects of cowboy capitalism. These examples suggest a flaw in the claim for SEZs in Thailand that they are different from industrial estates and not paces of pollution, contestation and social problems. This paper investigates the logic of the border SEZs in Thailand in the light of projects across the Mekong Region and, specifically, considers the extent to which they promote safe, decent and stable employment, in contrast to the precarious work and lifestyle of the factory hand and family members.

Keywords: employment, Mekong Region, precarity, special economic zones, Thailand

The Development of Dawei Special Economic Zone

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Announcing: Walsh, John, “The Development of Dawei Special Economic Zone,” The Myanmar Journal, Vol.2, No.2 (2015), pp.9-26, available at: http://www.komyra.com/bbs/board.php?bo_table=articles&wr_id=33.

Abstract: This paper uses a case study approach to explore the role of the Dawei special economic zone (SEZ) in the economic development of Myanmar, in the context of promotion of cross-border investment by neighbouring Thailand, which intends to take advantage of the presence of that SEZ. The SEZ is due to be built by the Thai corporation ITD, which has been facing problems with the mobilization of sufficient amounts of capital, resistance at the local level, political disturbances and other issues. Is it possible for this project to be completed and, if so, what are the difficulties (in addition to those already enumerated) that should be overcome and how should the resultant issues be addressed. The potential impacts of this development and the prospects of it being completed are also considered.

Key words: Asian Highway Network, connectivity, industry, Myanmar, special economic zone,

The Special Economic Zones of the Greater Mekong Subregion: Land Ownership and Social Transformation

I have returned from the Land Grabbing Conference held by RCSD at Chiang Mai University. It was a well-attended conference with many interesting speakers – unfortunately, I was only able to attend the first day.

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This was my paper:

The Special Economic Zones of the Greater Mekong Subregion: Land Ownership and Social Transformation

Abstract

Special economic zones (SEZs) are geographical areas bounded in space and time that are aimed at encouraging inward investment by privileging capital above labour and above the general legal system. In the Greater Mekong Subregion (GMSR), which consists of Cambodia, Laos, Myanmar, Thailand and Yunnan Province and Guangxi Zhuang Autonomous Zone of China, SEZs have been used extensively and with considerable success according to quantitative measures. In general, these measures have promoted the Factory Asia paradigm of low labour cost competitiveness in import-substituting, export-oriented manufacturing. This is a paradigm that is limited in time and ends with the effect known as the Middle Income Trap, which now affects Thailand and can only really be exited by qualitative change in economy and society to promote innovation and creativity. In other parts of the GMSR, states have not progressed so far along this trajectory and, in Laos and Myanmar, are at the very early stages of their journeys. In the majority of cases, SEZs are built with public sector support and, in particular, with assistance in obtaining land. Often, as in the case of Dawei SEZ in Myanmar, this has involved the forcible relocation of the villagers from an area the size of Singapore. At least some of the dispossessed villagers have mounted armed resistance to this relocation and halted construction. This may be seen as a form of creative destruction during the process of what Polanyi called the great transformation. Social relations and social capital are among the assets that are transformed into market relations as land itself is redefined and reconfigured as commercially important space. This paper explores the variety of SEZs in the GMSR and the way they interact with the people who once lived on or near the land they now occupy. Remedial social policy options are explored.

Keywords: Greater Mekong Subregion, land, special economic zone, transformation

The full-text version of the paper is online at the conference website (here).

Myanmar Embraces the Factory Asia Paradigm

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Walsh, John, “Myanmar Embraces the Factory Asia Paradigm,” paper to be presented at the 1st International Conference on ASEAN Studies,” organized by the Pridi Banomyong International College, Thammasat University (October 3rd-4th, 2015).

Abstract

Some of the more important sites where rapid economic development will take place in Myanmar in the years to come are the special economic zones (SEZs) which will host the Factory Asia paradigm: import substituting, export oriented, low labour cost manufacturing based on the movement of labour from manufacturing to industry (pre-Lewisian point) and then suppression of workers’ rights (post-Lewisian point). This will, presumably, take place in the designated areas of Dawei, which will be dominated by Thai capital, and Thilawa, which will be dominated by Japanese capital. Peripheral SEZs in border areas have also been proposed but these are jeopardized by continued attempts to ensure autonomy for ethnic and tribal groups opposed to central Burman rule. The SEZs will be linked to the places of consumption and production across Asia by the Asian Development Bank’s Asian Highway Network, which consists of road and rail links which will, in the case of Myanmar, connect Yangon and Manadalay to Kanchanburi in Thailand (and hence China to the north via Route 3) and the eastern border of India and, hence, make numerous potential export industrial sectors profitable which were not profitable with the existing level of physical and social infrastructure. There will be a human cost to pay for this transformation, despite aggregate increases of income overall. Alienation, state-sponsored violence and family conflicts are all to be expected, since these have routinely been found in the other countries to have embraced the Factory Asia paradigm. This paper explores the likely trajectory of development to be followed in Myanmar based on the history of neighbouring countries and the potential impact on the workers and family member involved in this paradigm. Policy recommendations are drawn from the analysis.

Keywords: Asian Development Bank, Asian Highway Network, Factory Asia, Special Economic Zones, Thailand

John Walsh, Shinawatra University

More details here.

Joint Operation of a Special Economic Zone by Enemies: The Case of Kaesong Industrial Complex

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Walsh, John, “Joint Operation of a Special Economic Zone by Enemies: The Case of Kaesong Industrial Complex,” The International Journal of Nepalese Academy of Management, Vol.2, No.1 (2014), pp.80-92, available at: http://www.nam.org.np/userfiles/IJHRM%202014.pdf.

I was able to pick up a hard copy from the editor Dr Dhruba Kumar Gautam during my recent trip to ICMC 2014 in Greater Noida.

Abstract: Special economic zones have become important means by which states can hope to enact various developmental goals. They are used in a wide variety of environments and situations and thus have evolved to meet the conditions in which they are expected to operate. However, joint operation by enemy states is a venture that has not been tried in this way before. The border between North and South Korea is one of the most intensely contested in the world; periodic outbreaks of violence have punctuated the sixty years since the Korean Civil War was calmed by a ceasefire. The increasing inequality across the border, as the South has become a successfully developed capitalist country and the North has regressed into poverty and hunger, acts as a further stimulant to disorder. To reduce tension and promote cooperation, the South Korean government proposed various joint cross-border economic ventures, the most persistent and successful of which has been the Kaesong Industrial Complex, involving Southern capital and know how and Northern labour and land. The venture has been successful in terms of employment generation and production volumes but it has been bedeviled by political and managerial problems. This paper takes a case study approach to the situation with a view to exploring the issues involved and how problems have been managed to date. The path ahead remains a precarious one.

Keywords: cross-border ventures, Kaesong Industrial Complex, Korea,
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Mitsui OSK: Logistics Management and the National Single Window at Thilawa Special Economic Zone, Myanmar

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Newly published: Walsh, John, “Mitsui OSK: Logistics Management and the National Single Window at Thilawa Special Economic Zone, Myanmar,” in G.D. Sardana and Tojo Thatchenkery, eds., Understanding Work Experiences from Multiple Perspectives: New Paradigms for Organizational Excellence (New Delhi: Bloomsbury India, 2015), pp.136-48.

Abstract: Transporting goods by sea remains the dominant more of importing and exporting merchandise and the amount of such movements was revolutionized by the containerization, which standardized crate sizes on seagoing vessels and dramatically increased the efficiency of operations. Yet there are other constraints to efficient operations and such issues as customs clearance, tariffs and non-tariff barriers can all have a significant effect. The ten member states of the Association of Southeast Asian Nations (ASEAN) aim to reduce delays and paperwork through the use of the National Single Window (NSW) concept that members should introduce as part of the ASEAN Economic Community (AEC), which is scheduled to be launched in 2015. An ASW should improve competitiveness within the region as a whole because it will be common among all members and will be in operation in all ports of entry and exit. One such port is at Thilawat special economic zone (SEZ) in Myanmar, which is being developed primarily by Japanese capital and it is anticipated that it will act as a centre for future investments from the country in what is now one of the most attractive emerging markets in Asia. It will need a deep-sea port that will be able to handle the rapidly-increasing number of container movements now taking place in Myanmar. Mitsui OSK has been a prominent international shipping line for more than a century and was an important figure in the containerization revolution. It is also a leader in shipping containers to and from Myanmar. However, Myanmar can still be a difficult place to do business because of unexpected government interventions, lack of infrastructure and poor connectivity. This case study investigates the role of logistics companies such as Mitsui OSK in promoting connectivity in an emerging market and, hence, enabling rapid economic and commercial development to take place.