The ongoing conflict in Myanmar between the military government and opposition forces is intensifying, leading to significant economic repercussions. Thai companies are pulling out, divesting $7 billion, and causing a notable decline in trade between the two nations.
Key Takeaways
- Thai companies have divested $7 billion from Myanmar.
- Trade between Thailand and Myanmar has decreased by 10.46% from January to May 2024.
- The Myanmar government is implementing stricter import regulations to reduce its trade deficit.
- Foreign investment in Myanmar remains high, with Singapore, China, and Thailand as top investors.
- The condominium market in Thailand has seen a shift in foreign buyers, with Myanmar buyers overtaking Russians in early 2024.
Economic Impact on Thai Investments
In the past, Thai investors ranked third in investment promotion applications in Myanmar, with a total value of $11.6 billion. However, Thai investment has now dropped to fifth place, with a value of $4.45 billion. This represents a loss of 50 projects and an investment value of $7.1 billion.
From January to May 2024, trade between Thailand and Myanmar totaled $3 billion, a decrease of 10.46% compared to the same period last year. Thai exports decreased by 11.81% to $1.7 billion due to lengthy import licensing procedures in Myanmar. Thai imports from Myanmar fell by 8.52% to $1.2 billion, resulting in a trade surplus for Thailand of $499.3 million.
Myanmar’s Response to Trade Deficit
In response to the trade deficit, the Myanmar government announced that goods found in ports or airports without import licenses will face legal action under export and import laws starting July 1, 2024. Seven categories of goods now require an import license from the FESC: fertilizers, steel, solar products, polypropylene pellets, raw materials for plastic production, commercial vehicles, and commercial machinery.
A report from Thailand’s Trade Promotion Office in Yangon projected Myanmar’s economy to grow by 1.5% in 2024. Between April and May 2024, international trade totaled $4.5 billion, a 14.50% decrease compared to the same period last year. Exports increased by 10.94% to $2.3 billion, while imports fell by 30.82% to $2.2 billion, resulting in a trade surplus of $63.53 million for Myanmar.
Foreign Investment and Real Estate Market
As of June 2024, total foreign investment in Myanmar for the fiscal year 2024-2025 stood at $95.5 billion. Ongoing foreign investment projects were valued at $74.87 billion. The top investing countries were Singapore, China, and Thailand.
In the condominium market, Myanmar buyers rose to second place, overtaking Russians, in the first quarter of 2024. However, this trend was abruptly halted by Myanmar’s policy to prevent capital outflows, causing financial instability. The Myanmar government cracked down on buyers and sellers involved in promotional events in the second quarter of 2024, leading to a sudden drop in market activity.
Thai Businesses Retreat
Many Thai companies listed on the Stock Exchange of Thailand have closed their operations in Myanmar. TPBI Public Company Limited announced the dissolution and liquidation of its subsidiary TPBI & Myanmar Star Company Limited on July 8, 2024, due to economic uncertainty and business regulations in Myanmar.
In early July, Christiani & Nielsen (Thai) Public Company Limited announced the dissolution of its subsidiary, Christiani & Nielsen (Myanmar) Company Limited, on July 2, 2024. General Engineering Public Company Limited announced the termination of a 45% interest in joint ventures in Myanmar on February 29, 2024, due to continued losses and unfavorable political conditions.
At the end of 2023, Grand Prix International Public Company Limited dissolved its subsidiary, GPI Myanmar Company Limited, due to non-commercial activities.
Sources
- Myanmar Conflict Escalates, Thai Companies Pull Out, Khaosod English.
