5. Concluding remarks: Thailand and the GMs, and the larger context of regional cooperation
This paper has to discuss the development of the economic cooperation among the riparian attempted river, which is known the countries of the Mekong the area now role of or GMs. pointed out the al, initiating Asian Development Bank(ADB) in launching. managing. facilitating. and promoting the discusses the rationale for the formation of this cooperation from each country's point of view, far, and the problems and prospects in the future. This paper would like to end the discussion by offering some concluding remarks about th in the GMS
After the fall of socialism in the southeast Asia and Indochina. is good position to be involved in this economic on, and through the development of triangles or growth areas. From the point of view of Thailand, the existence and progress is economic zone provide both the stimulus and incentives to look ahead upon in the future regional and subregional development. The benefits and costs of specific items of cooperation in the GMs economic zone have been mentioned in the paper, but there is a need for Thailand to look beyond the confine of this subregional cooperation and perceive this present development in the light of a larger regional and global economic cooperation Four observations could be made as follows.
First, Thailand must look upon this economic zone as part of its effort to increase its international competitiveness, by adopting the"offensive plan' rather than'defensive plan future strategy economic development. Thailand must realise that it is tougher competition from other lower-cost countries in the region in the production that its existing comparative advantage will soon be eroded. This strategic concern future competitiveness of the Thai economy has always received highest level of attention from the government. A report by a govemment study team has shown thar since the the dependence on US and European markets has decline and that on and other regional and subregional markets has increased, attesting to the promise of subregional cooperation like the GMS
Second, the geographical position of Thailand in the Southeast Asian and Indochina makes it imperative that Thailand play a leading role in fostering greater economic cooperation in the region and subregion. Thailand was cautious at first when the idea of opening up its northern border with Indochinese neighbours and China w proposed fearing that influx of goods and services fromChina would compete unfairly with local products. But after careful planning and preparation, it has come to a conclu as long as unhindered market forces are allowed to be the guiding principle of economic
interactions among nations. Thailand should not fear as long as it is willing to adust itself to the changing situations on the issue of subregional cooperation, Thailand knows that Singapore and Malaysia are pushing hard from the south to gaan access into Thailand to connect with Indochina and China, Thailand welcomes the gesture and is eager and willing to promote greater economie cooperation in the subregion Note that mailand isalso active in the participation of another subrego onal cooperation with Malaysia and Indonesia in the so-called Indonesia-Malaysia-Thauland Growth Triangle imt-GT Project
third, the subject of Baht zone, that is to say, the regular use to the Thai baht as international n the GMs is often as a consequence of being the strongest and closest economy in the subregion it least policy of the Thai government to see Thai baht a fully convertble intemational in the subregion, the fact remains that the use of Thai baht in thr GMs trade has become widespread, and the Thai monetary authorities did not attempt to discourage this use of the baht in the GMS from the practice one way or the other The benefits ofincreased point of view of Thailand are quite obvious. Thailand and its GMs neighbours are
First of all. trade and investment berween scarce in pected to increase because the need to use convenible umencies which are foreign- many of these GMS countries substantially removed. Secondly the cost of exchange purchase and the nsk of exchange-rate fluctuation from the point of view of Thai businessmen are reduced, providing an additional competitive edge to Thai bosinessmen. Thirdly as it has been projected that the balance of uade between Thailand and its GMS neighbours will be against Thailand in the future, the use of bahr will help reduce the Fourthly the use of ure on Thailand's intemational reserves, at least in the short-run senice hclping baht will have a direct link with domestic (Thai) production of goods and similar to the local economy. And fifthly the use of baht gives seigniorage gains to Thailand lending of these GMs countries to Thailand without charging interest. a larger regional
Fourth, eventually this subregional economic cooperation will lead to with only in Southeast Asia are now members of ASEAN, Asone of exception of East Timor which is the newest sovereign nation in Southeast Asia to lay the the general principles of GMS economic cooperation is that it has no intention docs Dot foundation towards the formation of a trade bloc, this subregional cooperation APEC, conflict with the main guiding principle of ASEAN. And a larger context of ASEAN is always a proponent that APEC is a forum for intergovemmental cooperation with a view to supporting and promoting non-preferential and trade and investment in the Asia-Pacific region. As such the GMS economic zone could be looked upon as apan of a much larger global economic arrangement that, once accomplished, will lead to a better life and livelihood of all the people in the region.