Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong...
Transcript of Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong...
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
1/16
JETROs SURVEY ON
BUSINESS NEEDS AND STRATEGIES
IN THE MEKONG SUB-REGION 2012
(major points of the interim report)
June 28th, 2012
Hideyasu Tamura
AMEICC Secretariat/JETRO Bangkok
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
2/16
Objective :Follow-up to Survey on the business needs and strategies in Mekong region
(August to October 2009, JETRO) and discussions in the Mekong-Japan Industry
and Government Dialogues, conduct survey on the most up-dated
needs/strategies of Japanese and local companies operating in the Mekong sub-region.
In this regard, coverage of the survey was mainly the i) members of Mekong-
Japan Industry and government dialogue and ii) companies which JETRO
interviewed during the previous survey in 2009.
The survey in 2012 focused mainly on the changes from 2009, in terms of
both business operation/strategies and improvement of soft- and hard-infrastructures.
Time period: March 20th to June 1st, 2012
Method: Interview to individual companies (for some companies, response toquestionnaires)
Number of companies responded to the survey: 190In Mekong sub-region---146
(Cambodia: 24, Lao PDR: 13, Myanmar: 21, Thailand: 40, Vietnam: 48)
In Singapore and Japan--- 44(Regional headquarters in Singapore and Kuala Lumpur: 10, Members of the
Mekong-Japan Industry and Government Dialogue in Japan:14, Servicessectors in Japan:20) 2
Overview of the survey in 2012
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
3/16
Upon the expansion of business operations in the Mekong sub-region
(e.g., exportation to global market), prioritization of development
plans/projects based on business needs is necessary.
On hard infrastructures, i) development of key seaports (e.g., Lach
Huyen, Cai Mep-Thi Vai and Vung Ang in Viet Nam and Dawei in
Myanmar), ii) connecting road to such seaports (e.g., completion of
Neak Leoung bridge) and iii) stable supply of electricity, are prioritized
projects from business viewpoint.
Trade/logistics facilitation, especially i) reduction of face-to-face
communication with custom officers through introduction of e-customs,
ii) enhanced utilization of FTAs through simplified ROO-related
procedures and iii) implementation/improvement of CBTA (extension
to GMS capitals) are strongly needed.
In order to achieve above-mentioned improvements, human resources
development in terms of both government and private sectors should
be further enhanced.
3
Key findings and recommendations:
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
4/16
Chapter-I. Overall Business
Needs and Strategies in theMekong sub-region
4
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
5/16
5
Summary of Chapter-I
Among 146 companies responded to the survey, 81 (55%) haveexpanded their operationsin these 3 years either in the form of
Newly established investments (e.g., new factories/facilities/production processes)
Expanding/up-grading existing operations, including shift from abroad
Enhanced trade both intra-region and to the outside
Especially, operations in Cambodia (parts manufacturers) and Lao
PDR (garment) have been expanding remarkably, including newlyestablished investments.
While many manufacturing companies regard it efficient to concentrate
the production operation in one place, they are facing the necessity todiversify the prospective risks (e.g., natural disasters, macroeconomicinstability).
In general, both local (especially, Thai) and Japanese companies expect
expansion ofoperation in Cambodia in the short-term (within a few
years) and Myanmar with a bit longer time frame.
Expanded operation between 2009 and 2012
Perspective for the future
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
6/16
(Reference) Enhanced production network involving CLM
- Design final products
(apparel)- Produce fabrics/textiles andexport to Cambodia
-Cut/sew/finish
in Lao PDRand/orCambodia
Export to overseas (e.g., Japan,Korea) by using AJCEP, AKFTA
Bangkok
- Produce semi-
finished parts inCambodia, andexport to Thailand,Malaysia
Bangkok
- Produce and export core parts to
other ASEAN countries byAFTA/to India, China throughThailand-India, ASEAN-ChinaFTA
6
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
7/16
Chapter-II. Trade and logistics
facilitation
7
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
8/16
8
Summary of Chapter-II
Among 146 companies, 39 regard custom procedures were improvedin these 3 years, through
Introduction ofAuthorized Economic Operator (AEO) or green-lane system(especially in Viet Nam)
Speed-up in obtaining import/export licensing (especially in Myanmar)Enhanced mutual understanding between custom authorities and companies.
At the same time, 55 found no specific improvement . These companiespointed out bottlenecks such asProblems in e-customs(e.g., i) systems shut down frequently, ii) face-to-faceprocedures still remain (especially in Viet Nam) and iii) insufficient introduction in thelocal provinces (especially in Cambodia and Lao PDR))
Burdensome procedures (e.g., i) lack ofsingle stop inspection along EWEC and SEC,ii) requirement of original documents (especially in Viet Nam))
Misclassification of HS code (necessity for introducing advance ruling system)
Necessity oflonger operation at border customs (e.g., 24 hours operation, out-of-regular office hours operation)
Unexpected costs through requirement of unofficial custom clearance fees(e.g., Cambodia, Viet Nam and Lao PDR)
Custom procedures
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
9/16
9
Cross border transportation agreement (CBTA)
FTA utilization
While ATIGA and EPAs with Japan are frequently utilized, several
companies already started to use FTAs such as ASEAN-China and
ASEAN-India.
In further enhancing the FTA utilization, following bottlenecks were found;Cumbersome procedures in obtaining Certificate of Origin (COO) (e.g., i) longertime in the issuance procedures, ii) inspection in factories by issuing authorities (especially
Viet Nam))
Rules of origin (e.g., i) different ROO across various FTAs, ii) stringent ROO underASEAN-India FTA)
Issues related to tariffs (e.g., i) difference in classification/understanding of HS code,ii) insufficient tariff reductionincluding those caused by reciprocity under ATIGA and
ASEAN-China).
CBTA is utilized in carrying both cargos and passengers (tourism).However, business sectors request further improvements such as;
Deregulate limitation of transportation inside each country (triple license)
Ratification/implementation of CBTA i) by Myanmar, and ii) along SouthernEconomic Corridor especially between Cambodia and Thailand
Increased number of permissions for cargo transportation.
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
10/16
Chapter-III. Development of hard
infrastructures
10
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
11/16
11
Summary of Chapter-III
On East-West Economic Corridor (EWEC), business sectors strongly needImprovement ofroad condition on EWEC (especially in Lao PDR and Myanmar)
Development ofseaports in Viet Nam (e.g., Lach Huyen and Vung Ang) andEasier access to such seaports through enhanced road connection.
On Southern Economic Corridor (SEC), business sectors regard fulfillment
of missing links is necessary, especially,Development ofDawei seaport and related infrastructures (e.g., road linkage to
Thailand, industrial estates, trade/transport facilitation)Completion ofNeak Leoung bridge andDevelopment ofCai-Mep Thi Vai seaport and easier access from HCMC.
Enhanced electricity supplythrough appropriate shared responsibilityamong relevant government agencies and private companies is strongly
needed in CLMV countries.
In addition, projects such as i) development ofnew SEZ (e.g., Thilawa), ii)
improvement ofkey airports in CLMV countries, should be given priority.
Hard Infrastructures on Economic Corridors
Other Hard Infrastructures
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
12/16
Improvement of roadcondition/spec
12
HARDINFRASTRUCTURES-1: EAST-WEST ECONOMIC CORRIDOR
-Improvement of road condition/spec ofEWEC (especially Lao part), along with
streetlights is essential for smoother
transportation.[auto maker in Thailand, logistics company in
Viet Nam, finance company in Viet Nam]
-Considering the future possibility incarrying cargos between Yangon, Thilawa
SEZ and Bangkok, improvement of EWEC
inside Myanmar, as well as stable
transportation at Mae Sot-Myawaddy
border point would be important.[auto parts maker and textile maker in TH,
logistics company in MM]
- In order to make Thilawa project useful,cold storage at the seaport should be
equipped (processed food companies in TH)
-Although the Third Mekong Bridge wasopened, short-cut route cannot be used
as a logistics route, since the customs
and transshipment facilities are not well
developed at Lao-Viet Nam border.[logistics companies in VN and TH]
Development of seaports
in Viet Nam
-Development ofLach Huyen seaport,as well as improvement of connectivity
with Hanoi (e.g., new National Route #5)
is essentially important for manufacturers
in North Viet Nam.[auto parts makers, E&E makers in VN]
-Development ofVung Ang seaport,along with connecting route, especially at
the mountainous part of National Route 12
of Lao PDR is important in order to
facilitate exportation of agriculture &
forestry products in Lao.[food processing company in Lao, logistics
company in VN, logistics company in TH]
New requests/proposals
-Ifrailway from Vientiane to Bangkokcould be used for cargo carriage, it
would be useful for lowering
transportation costs.[garment manufacturers in Lao]
-Development of National Route18 of Lao PDR to Da Nang
seaport would be beneficial for
sectors such as agro-business,
tourism and mining.
[trading company and agro-businesscompany in Lao]
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
13/16
JETRO conducted the research on the trilateral transportation through the ThirdMekong Bridge from Bangkok to Hanoi in March 2012. Comparison with the route
through the East-West Economic Corridor via the Second Mekong Bridge is asfollows;
13
(Ref.) JETROS Research on a trilateral transportation (Bangkok-
Hanoi) through Third Mekong Bridge
(Comparison)
449km 595km -146km
40.7km/h 42.7km/h +2.0km/h
11:02 13:52 -2:50
5:54 2:28 +3:26
1:30 0:30 +1:00
Total Distance (Bangkok - Hanoi)Via 3rd Bridge 1,429kmVia 2nd Bridge 1,575km
Despite shorter distance, it is more costly and took longer lead time. Shorter custom clearance will be
expected by introducing Transit procedure under CBTA at the Third Bridge. Improvement of logistics
infrastructure, development of human resources, promotion of the single stop / single window and
extension of operating hours at the customs will contribute to the attractive business environment.
H 2 S E C
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
14/16
Improvement of roadcondition/spec
14
HARDINFRASTRUCTURES-2: SOUTHERN ECONOMIC CORRIDOR
-Improvement of road condition of SEC,including i) construction ofNeak Leoung
bridge and ii) development ofring-road
around Phnom Penh should be
expedited.[motorbike makers in KHM and VN, logistics
company in VN, trading company in TH,garment companies in KHM and VN, etc]
New requests/proposals-Responding to the increasing
number of cargo vessels navigating
through Mekong river to HCM , It
need to eliminate bottlenecks at Cho
Gao Canal such as narrow canal
width, too low for navigating under
bridge [logistics company in VietNam]
-Maintenance/ re-connectingof the current railway betweenBangkok, Phnom Penh and Ho
Chi Minh City would be helpful to
convey bulky products
[paper manufacturer in Malaysia]
-Access route to Cai Mep-Thi Bai
seaport should be further improved.[trading company and logistics companies in
VN]
Development of Dawei seaportand related infrastructures
-If Thailand and Myanmar governments
seriously support the establishment of
material industries in Dawei, including
development of seaport and its road
linkage to Thailand, as well as
trade/transport facilitation, it would
result in a remarkable re-allocation of
industries.[trading companies, steel maker, developer,
chemical maker in TH]
-Considering that automobile
industries in India would grow fast,
Dawei project would have a significant
meaning in realizing mutual
complementation between India and
Thailand.[auto company in TH]
-In order for Myanmar industries to reap
the benefit from Dawei project,
enhanced connectivity between Yangon
and Daweiwould be necessary.[E&E manufacturer in MM
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
15/16
Chapter-IV. Development of
potential industries and service
sectors in Mekong sub-region
15
-
7/31/2019 Fourth GMS Economic Corridors Forum (ECF-4): 5.b Session1-Business Needs & Strategies in the Mekong Subregion_JETRO
16/16
16
Summary of Chapter-IV
Business sectors pointed out potential of CLM countries, especially i) partsindustries in Cambodia and ii) garment industry (Yangon area) and material
industry (Dawei) in Myanmar.While manufacturing sectors investment in Mekong sub-region has been
increasing, several companies pointed out that agro-based industries are stillimportant especially in CLM countries.
Necessity ofappropriate industrial policy (especially, automobile industry inViet Nam) was also pointed out.
Both Japanese and local service industries (e.g., distribution, retail, finance,telecommunication) are interested in enhancing the operation across theMekong sub-region.At the same time, service providers face bottlenecks such as i) licensing
procedures, and ii) stringent regulations (e,g., foreign capital ratio, store size).
Many companies face the necessity of i) basic human resources developmentin Cambodia, Lao and Myanmar, and ii) appropriately responding to the hikeof labor cost in Thailand and Viet Nam through advancement of industriesand improved productivity.
Potential industries and appropriate policy
Further development of service industries
Necessity to appropriately address issues on labor/HRD