Japanese investors are considering a shift from Thailand to Burma
where a large pool of low-cost workers is bound to attract
labor-intensive manufacturing industries. Japan’s industrial investors
stayed with Thailand through the army coups, the Bangkok-paralyzing
massed Red-Shirt protests, and the mismanaged floods of 2011 that
swamped so many Japanese-owned factories. But a huge labor force in
Burma ready to work for one-sixth of a Thai wage could be a turning
point.
The visit to Burma earlier this week by Japanese Prime Minister
Shinzo Abe’s has certainly got the government of Prime Minister Yingluck
Shinawatra in Bangkok worried. It helps explain why last week during a
trade promotion visit to Tokyo she apologized to Japanese business
leaders for “any inconvenience caused” to them and their businesses in
Thailand in recent years and promised to do better.
“Please be patient with Thailand and we will amend and change the
regulations for you and other investors,” Yingluck told a Tokyo
conference. “Our government will try to make sure that Thailand will be a
good place for investments for you all in the future,” she said in
response to calls for changes in Thai rules on investment.
“We will try to work out and implement regulations that will suit the
investors, as we want to make Thailand the regional hub,” Yingluck
said.
Political analysts have been quick to the view that Japan’s
intensifying interest in Burma is about seeking to counterbalance the
influence of China, but trade and business pundits note that Japanese
investment in large-scale manufacturing follows the cheap labor market.
On paper at least, Burma has all the elements required to create
another Asian economic miracle. With a population of 48 million, the
country has a large pool of low-cost workers custom-made to attract the
labor-intensive manufacturing that jump-started income growth from South
Korea to Malaysia.
Natural resources, such as timber and minerals, could woo billions in
foreign investment. And its strategic position nestled between China
and India could turn Burma into a prime location for tapping into the
megagrowth of those two Asian giants.Translating that promise into real
dollars isn’t going to be easy, however. Lots of nations possess the
potential for economic greatness. The problem is that few are ever able
to realize it. Burma has been a case study in that failure.
source: Thailand Business News
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