Mekong Monitor: Thailand seeks to cut Malacca Strait shipping time via land link

Photo Credit: The Jakarta Post





Thailand seeks to cut Malacca Strait shipping time via land link
(1 September 2020) Thailand hopes to cut shipping time via the Strait of Malacca with a 100-km highway and railway passageway. Discussions are underway to construct two deep seaports on both sides of the country’s southern coast that would be linked via rail and highway. The government has reportedly set US$2.4 million aside for a study into the building of the seaports, along with a further US$2.9 million to look into the feasibility of highway and rail connections between the two. The new project is expected to reduce shipping time by two days by bypassing the Strait of Malacca, which runs along Peninsular Malaysia’s south-west coast, before turning east past Singapore. This proposal replaces the Kra Canal plan, which has now been shelved on environmental grounds. Thailand’s transport minister Saksiam Chidchob said around a quarter of globally traded goods use the Strait of Malacca and therefore, an alternative route is now a necessity.
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Government extends financial support measures for local businesses
(9 September 2020) The Myanmar government has extended financial support for local businesses until the end of the year. On 7 September, the Ministry of Planning, Finance and Industry (MOPFI) issued Notification 3/2020 which extends current support measures for businesses due to COVID-19 until 31 December 2020. The measures include the extension of tax reliefs to prioritised sectors from 30 September to 31 December. Under the previous notification, corporate income tax and commercial tax payment deadlines for cut, make, pack (CMP) businesses, hotel and tourism firms and SMEs were extended to 30 September. Under Notification 3/2020, income tax payments for the second to fourth quarters of the current financial year have also been extended to 31 December 2020. The Union of Myanmar Travel Association welcomed the extension, saying the relaxation of tax obligations would be good for businesses.
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Laos forms joint power grid company with China
(7 September 2020) Lao state enterprise, Electricite du Laos (EDL), and China Southern Power Grid have signed an agreement to jointly establish a new venture to operate the country’s power grid. The new venture, Electricite du Laos Transmission Company Limited (EDLT), will work under the Lao government but would take advantage of China Southern’s expertise in constructing, running, and maintaining power grids in addition to its financial resources. Once established, the EDLT is expected to provide reliable power transmission service for EDL, driving social and economic development and improving standards of living in Laos. The company will also assist Laos in enhancing power grid interconnection with neighbouring countries, helping Laos to become the “battery” of clean energy in Southeast Asia.
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Vietnamese textile enterprises turn to domestic market amid COVID-19
(9 September 2020) With export activities facing difficulties due to the COVID-19 pandemic, Vietnamese textile and garment enterprises are turning to the domestic market as they consider it as one of the potential market segments to help offset revenue loss. According to the Vietnam Textile and Apparel Association (VITAS), the domestic consumption of textiles and garments is currently worth about US$3.5-4 billion and covers a population of nearly 100 million people. VISTA vice chairman Truong Van Cam said that although Vietnamese enterprises have been successful in exporting, doing business at home is still difficult for them. This is because when operating in the domestic market, local companies must produce, build distribution systems, and plan other sales and marketing campaigns, rather than only focusing on fulfilling shipments for export. Local businesses have been urged to build a distribution network for the domestic market, and invest in design and standardise their customer service.
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Cambodia mulling FTA with Japan
(7 September 2020) Cambodia is exploring the possibility of establishing a free trade agreement with Japan, said Prime Minister Hun Sen when he chaired a cabinet meeting on 4 September. According to Hun Sen, he conveyed his intent to the Japanese foreign minister Motegi Toshimitsu when he visited Cambodia in the third week of August. The trade volume between Cambodia and Japan decreased by 3.7% to US$1.01 billion in the first half of 2020. Data from the Japan External Trade Organization (JETRO) from January to June 2020 showed that Cambodia exported US$791.6 million worth of products to Japan, marking a year-on-year decrease of 0.2%. During the same period, Cambodia spent US$218.6 million importing products from Japan, equivalent to a 14.6% decrease.
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About Greater Mekong Subregion (GMS)

The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.

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