Martial law, ambiguity cloud push for development of SEZs
SA KAEW March 16, 2015 1:00 amINVESTORS WORRIED ABOUT LAW; PLUS DECISIONS ARE YET TO BE MADE ON SITES
DESPITE Thailand's push for the establishment of special economic zones (SEZs) in border provinces, there are still concerns over the continuation of martial law in those areas and ambiguity in the development plan.
Cabinet late last year approved five potential border areas - in Tak, Sa Kaew, Trat, Mukdahan and Songkhla - to be developed as the country's first SEZs to enhance economic integration with neighbouring countries for the upcoming Asean Economic Community (AEC) era.
Prasit Sangrungrueng, deputy chairman of Sa Kaew's SEZ, said a major obstacle in proceeding with the project was the imposition of martial law in border provinces.
"Lenders or bankers are afraid of giving loans to investors because there will be no insurance coverage in an area under martial law," he explained.
Although he has proposed to the government that it lift martial law in the area designated for the special zone, he is still waiting for an answer.
If the government accepts his proposal, he would be able to send invitations to potential investors in the Sa Kaew SEZ within two weeks, he added.
However, Panitan Wattanayagorn, an adviser to Prawit Wongsuwan, defence minister and deputy prime minister, said the issue had to be examined on a case-by-case basis because the implementation of martial law in those areas was done only in cases related to security, including |smuggling and other illegal |activity.
"In general, martial law does not obstruct trade activities," Panitan said, adding that the most important factor for a SEZ is to prepare all the required infrastructure and suitable conditions, in order to assure investors that they can pursue economic activities in the long run.
Colonel Picheanrat Pharunnit, Burapa Task Force's planning division chief, said that while martial law was enforced in border towns throughout the country, it did not affect the rights and freedom of traders.
According to Prasit, foreign investors from South Korea, Japan, Germany and China have showed interest and are ready to invest in the Sa Kaew zone.
However, besides martial law, other concerns include the unclear legal status of land-title documents in the area, as many of the plots would probably encroach on forests and have no legal title deeds, he said.
The lack of clear regulations from the government was another problem investors face, Prasit said. Moreover, officials still lack understanding about the plan.
Pakkarathorn Teainchai, the governor of Sa Kaew province, called for a clear policy from the government about what kind of business would be in focus in the SEZs, as well as incentives for investors, so that he can prepare a manual guide for officials and investors.
He also urged the government to be more decentralised and allow provincial agencies to grant certain
approvals in relation to the special zones, to speed up the process and gear up for the AEC.
The main objectives of the SEZs are to attract foreign direct investment, generate employment, boost living conditions through income distribution, improve border-area security, and enhance Thailand's competitiveness to prepare for the AEC at the end of this year.
Two areas in Sa Kaew - Ban Nong Ian in tambon Tha Kam, and tambon Ban Rai, 10 kilometres north of Rong Klua market in Aranyaprathet - are being considered as potential sites for setting up an industrial estate for the special zone.
Both potential sites have strong and weak points.
Ban Nong Ian was initially selected as there is no problem regarding the boundary line with Cambodia, but it is a flood-prone area.
The Ban Rai area, meanwhile, is more convenient as it is located opposite the Poipet O'Neang special economic zone, but it still has a disputed border area with Cambodia.
The provincial authority appears to support the former site, as it planned to set up a permanent border-crossing point between Ban Nong Ian and Stungbot on the Cambodian side to help reduce congestion at the current Khlong Luek-Poipet checkpoint.
The Thai Highway Department plans to build a flyover motorway to connect Ban Nong Ian and Stungbot.
A local source said that indecision over the site area had also led to uncertainty concerning the development plan.
This is the first in a series by The Nation on special economic zones, which are part of plans by the Prayut Chan-o-cha government to boost economic integration and border development for the Asean Economic Community, which is due to come into effect at the end of this year.