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BKK Post, March 24, 1998. TRADE
- Subject: BKK Post, March 24, 1998. TRADE
- From: burma@xxxxxxxxxx
- Date: Tue, 24 Mar 1998 02:08:00
March 24, 1998. TRADE
Thais will press Rangoon to loosen tight new regulations
Cross-border trade plunges
Woranuj Maneerungsee
Thailand's deputy commerce and foreign ministers will attempt to
persuade the Burmese government to ease its tough new bilateral trade
regulations during a planned visit to Rangoon early next month.
Border trade between the two countries has plummeted since last December
when the ruling State Peace and Development Council stipulated that all
goods must be traded through US dollars-denominated letters of credit.
Burma badly needs hard foreign currency to prop up its ailing economy
which is experiencing severe inflation.
The new system replaces the traditional baht-kyat payment and has
resulted in border trade in the Thai northern province of Tak alone to
fall from 500 million baht a month to 50 million baht.
Other regulations include import controls to reduce Burma's ballooning
current account deficit and to maintain its foreign currency levels, as
well as curbing inflation.
Paniti Tungphati, chairman of the Thai Trade Chamber in Tak province,
said the new regulations were not practical for border trade as no
commercial banks operated along the border to provide letters of credit.
He also said those involved in border trade are not normally registered
and therefore could not ask for letters of credit from commercial banks.
Mr Paniti said the impact of the regulations was being felt on both
sides of the border but it was worse for Burma as consumers there were
forced to pay more for smuggled goods from Thailand.
The new import controls were also aimed at curbing the import of luxury
items from Thailand, said Niyom Wairaipanij, chairman of Border Trade
Committee of Thai Chamber of Commerce.
Burmese companies are only allowed to import only 60% of what they
export and goods must by essential to production, such as raw materials.
Border trade between Thailand and Burma reached 8.9 billion baht last
year, with Thailand exporting goods worth 8.3 billion baht and importing
667 million baht.
Overall trade was worth 15 billion baht, with Thailand's importing 2.5
billion baht and exporting 12.5 billion baht.
Meanwhile, the Commerce Ministry will ask the Burmese government to
abolish its monopoly on gem exports, deputy minister Photipong Lamsam
said.
He said the Burmese government should limit local firms exporting gems
to $25,000 if it feared companies would export too much.
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