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Identifier
Created
Classification
Origin
04RANGOON488
2004-04-21 03:37:00
CONFIDENTIAL
Embassy Rangoon
Cable title:  

THE BURMA-THAI BORDER TRADE CHRONICLES: PART I,

Tags:   ETRD  ECON  PREL  PGOV  EFIS  BM  TH 
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						C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 000488 

SIPDIS

STATE FOR EAP/BCLTV, EB
COMMERCE FOR ITA JEAN KELLY
TREASURY FOR OASIA JEFF NEIL
USPACOM FOR FPA

E.O. 12958: DECL: 04/20/2014
TAGS: ETRD ECON PREL PGOV EFIS BM TH
SUBJECT: THE BURMA-THAI BORDER TRADE CHRONICLES: PART I,
THE SOUTHERN FRONTIER

REF: A. RANGOON 138 AND PREVIOUS


B. 03 RANGOON 1552

C. 03 BANGKOK 7434

Classified By: DCM Ron McMullen for Reasons 1.4 (B,D)



1. (C) Summary: A recent joint visit by Bangkok and Rangoon
Econoffs to Ranong and Kawthaung, along the southern
Burmese-Thai border, shows business as usual in the informal
movement of goods and people. However, the formal economy on
both sides is sluggish due to the continued ban on Thai
fishing in Burmese waters and the Burmese government's
perpetually capricious economic policies. For Kawthaung
(Burma), economic activity from the southern border trade
continues to provide critically needed goods, and the border
crossing remains an important outlet for workers from the
interior seeking better economic opportunities in Thailand
and Malaysia. In Ranong (Thailand), locals are giving up on
Burma and looking regionally for their economic future. End
summary.

Waiting for Fish: Ranong



2. (U) To assess the current environment along the Thai-Burma
border, Bangkok and Rangoon Econoffs traveled March 15-19 to
two major border trade points -- Ranong (Thailand) and
Kawthaung (Burma) and Mae Sot (Thailand) and Myawaddy (Burma;
septel). Separated by a wide river mouth on the Andaman Sea,
Ranong and Kawthaung are tied together by the fishing
industry and modest amounts of legal and illegal trade.
According to Ranong Fisheries Association sources, more than
2,000 fishing boats (of various sizes) call Ranong home
despite the fact that rich Burmese territorial waters have
been off-limits to Thais for several years. Local
businesspeople still blame the previous Thai Prime Minister
Chuan Leekpai whose tough Burma policy led to the Burmese
regime's cut off of Thai access to Burmese waters. Other Thai
fishing industry sources blame overzealous Thai fishermen for
decimating Burmese fish stocks in the 1990s, which led to a
permanent Burmese crackdown.



3. (SBU) Whatever the reason, the fishing ban is slowly
strangling Ranong's once vibrant commercial fishing and
processing industry. Local Thai waters are not as rich, and
severe responses by the Burmese Navy to poaching -- 40 Thai
boats were seized in 2003 -- discourage poaching in Burmese
waters. While a few fish processing plants remain, they buy
much of their raw materials from Songkhla and other fishing
grounds to the south to supply the domestic market.



4. (C) Border trade between the two countries is steady, but
stifling GOB import controls and foreign exchange laws
prevent it from booming. This environment keeps traders on
their toes and requires creativity in sourcing and methods.
The local Thai Customs chief noted that when the Burmese
regime closed the border for trade in May 2002, Chinese
products replaced Thai goods in Kawthaung's markets. Ranong
Chamber of Commerce officials told us they would never invest

in Burma because of its unstable business environment, and
that trade is only possible on a small scale between
"friends." A Burmese border trader agreed, saying only a
small group Burmese businessmen in Kawthaung can thrive on
trading with Ranong, using small boats to import consumer
goods and diesel fuel -- usually illegally -- and export
foodstuffs.



5. (SBU) Ranong's business community, and local RTG
officials, say the future of Ranong is as much or more
regional than bilateral. There is a vision of a major 20,000
ton-per-year port at Ranong that would serve as Bangkok's
access to the Andaman Sea and points west. There is also
hope that the touristic development of Burma's untouched
Myeik Archipelago (800 islands lying offshore of Kawthaung
and north) will be a boon for Ranong's hotels, boat
operators, and tour guides.

Tourism and Palm Oil: Kawthaung



6. (C) In Kawthaung, Burma's southernmost point, local
businesspeople are rather pessimistic about the town's
economic future. Its proximity to Thailand and Malaysia, and
the number of small craft that ply the coastal waterways,
will always ensure its role as a border trading and smuggling
center and a mustering area for illegal migration to Thailand
and Malaysia. However, Kawthaung's lack of infrastructure
and neglect by the GOB will likely retard any major
development (such as tourism or fisheries).



7. (C) A major GOB campaign underway north of Kawthaung is
the development of large import-substituting palm oil and
rubber plantations. Small businesspeople with whom we spoke
supported the program, wherein the GOB will give low-interest
loans and other assistance to set up these farms. However,
this will be a crony-dominated program though larger, more
savvy entrepreneurs admitted they were dubious that the
government would ultimately prove a reliable consumer, at a
fair price, of the end product.

Comment: Diverging Priorities



8. (C) Action along the Ranong-Kawthaung border, while
relatively sleepy, illustrates several national trends.
Particularly we saw in action the chilling effect on legal
commerce of the Burmese regime's capricious and often
punitive policies. Fortunately for local businesspeople,
their close historical personal ties allow a continuation of
trade on the informal level. However, this is no way to
sustainably expand cross border economic ties. Sadly the
Burmese business community is helpless to improve its lot.
However local Thai entrepreneurs can and are moving on,
looking elsewhere for their economic future. End comment.



9. (U) This is a joint Embassy Rangoon-Embassy Bangkok cable.
Martinez