ASEAN Roundtable Series on Malaysia-Thailand: Towards Connectivity Beyond Borders

Published on 28 February 2020

CARI Viewpoint: Investments into border infrastructure and more continuity in consultation mechanisms can facilitate greater connectivity between Malaysia and Thailand, boosting the growth of bilateral trade

The CIMB ASEAN Research Institute (CARI) in collaboration with the Royal Thai Embassy in Malaysia organised an ASEAN Roundtable Series (ARS) on 18 February 2020 at the Embassy of Thailand in Kuala Lumpur. Titled “Malaysia-Thailand: Towards Connectivity Beyond Borders,” the roundtable looked at how Thailand and Malaysia can facilitate greater connectivity encompassing infrastructure, trade, investments, and peoples. Panellists at the roundtable also discussed how better bilateral connectivity can catalyse greater regionalism within the larger ASEAN bloc.

To bring clarity to such issues, the roundtable gathered eminent speakers such as H.E. Narong Sasitorn, Ambassador of Thailand to Malaysia; H.E. Mr. Arkhom Termpittayapaisith, former Minister of Transport for Thailand; and YB Dato’ Sri Mustapa bin Mohamed, Former Minister of International Trade and Industry and currently Chairman of the Bumiputera Agenda Steering Unit (Teraju).

Moderating the discussion was Tan Sri Munir Majid, Chairman of CIMB ASEAN Research Institute (CARI), President of the ASEAN Business Club.

 

A need for a common vision


In his opening remarks, H.E. Narong Sasitorn noted that while connectivity is always discussed at every level, besides the 24/7 opening of the border crossing at the Bukit Kayu Hitam-Sadao area, there hasn’t been much progress on the ground. He attributed this to changes in governments and budgetary constraints.

He also observed that even when government leaders agree to certain proposals, these proposals are then assigned to certain departments or agencies who work in silos. He posits that no one has an overall “common vision” of what connectivity means for both countries and the region. He argues that a common vision will provide the commitment needed to push projects through. He also argues that the US-China Trade War and the coronavirus outbreak has forced shifts in global supply chains from China towards ASEAN. In order to attract investors, ASEAN’s leadership must signal that they understand the opportunities this will bring. Ambassador Narong believes that Malaysia and Thailand can serve as the “core anchor” for greater ASEAN connectivity.

Tan Sri Munir Majid added to Ambassador Narong’s comments about a common vision, pointing out that traditionally Thailand has looked towards the Mekong region while Malaysia looked towards the Malay archipelago. He stresses that ultimately there must be trust between both countries in order for anything to happen.

 

Building greater connectivity within ASEAN


Arkhom shared his experience as former Minister of Transport for Thailand in promoting greater connectivity both within Thailand and the larger ASEAN region. He noted that there are several connectivity frameworks at different levels in place in Southeast Asia, including the Master Plan on ASEAN Connectivity 2025, sub-regional cooperation agreements such as the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT), and larger global projects such as China’s Belt and Road Initiative.

Arkhom discusses the difficulties in establishing seamless connectivity within the larger ASEAN region; most notably the wide disparity in the infrastructure of different member states. For instance, efforts to build a regional highway connectivity under the ASEAN Highway Network are complicated by the fact that the quality of highways differs depending on the respective Member State (including Malaysia and Thailand). The cross-border movement of trade and peoples are also hindered by the “soft infrastructure” of different rules and regulations in each country, which are being resolved through ongoing initiatives such as the ASEAN Single Window. Arkhom warns that ambitions to see the seamless movement of trucking between ASEAN countries can be hindered by simple differences such as differing driving regulations in each country.

 

Investing in Border Areas


Arkhom noted that during his time at the Ministry of Transport of Thailand, there was a proposal to build ten special economic zones at the border areas but in order to attract industries to set up in the zones, he states that infrastructure would have to be built to facilitate them.

Dato’ Sri’ Mustapa Mohamed made similar observations during his discussions on cross-border connectivity from the standpoint of his own constituency of Jeli, a border district located in Kelantan state. He believes that the relative underdevelopment (particularly in infrastructure) of southern Thailand and north-east Malaysia is a reason for the lack of connectivity between both countries. He also stated that currently there is a disproportionate amount of development occurring on the west coast of peninsular Malaysia instead of the east.

Ambassador Narong Sasitorn discussed that Thailand is currently undergoing large-scale infrastructure transformation. He stresses that Malaysian companies would be able to take advantage of these newly built logistical networks to access fast-growing markets such as Cambodia and Laos, southern China, and Bangladesh. But before these could be exploited, congestion at the Malaysia-Thailand border would have to be resolved first. Ambassador Narong notes that given the slowing global economy, infrastructure development at the border could provide a useful form of stimulus for the local economy. Tan Sri Munir also warned that entry points at the border risk becoming “chokepoints” without proper development. He stressed that development at the border areas should commence immediately before land value rises in the future.

 

Making consultation mechanisms more “business-as-usual”


Dato’ Sri Mustapa observed that another major challenge to building greater connectivity between both countries has been that present bilateral consultation mechanisms often lack effective follow-up. He stresses that these consultations need to be taken more seriously. In particular, he argues that while there is a lot of sharing at the central level (between Kuala Lumpur and Bangkok), these are often lacking at the local level. Dato’ Sri’ Mustapa believes that regional authorities such as the East Coast Economic Region (ECER) and the Northern Corridor Implementation Authority (NCIA), should collaborate more with their Thai counterparts. Ambassador Sasitorn pointed out that a problem with central collaboration is that government initiatives can often be interrupted or new ones introduced to the detriment of long-term continuity.

Tan Sri Munir concurs that a lack of political will and consistency have held back greater connectivity between both countries. He noted that the Malaysia-Thailand Joint Authority (MTJA) set up in the Gulf of Siam (which saw oil resources exploited by a company jointly held by both countries) was one example of both countries effectively solving bilateral problems together. On why this example of joint connectivity development could not be implemented again, he believes there ultimately needs to be “leaders and champions” in both governments to push for greater cross-border connectivity. Tan Sri Munir states that since Malaysia will be organising the next consultation (the last being in 2016), the onus is now on Malaysia to revive the current laxity in present relations.

The panellists also believe that future conversations must also involve feedback from the grassroots and private sector. Tan Sri Munir pointed to the ASEAN Business Club (ABC) as being one possible avenue within the private sector to expand cooperation.

 

Beyond economic ties


One participant in the audience noted that while there is lots of talk of infrastructure development and business cooperation, he questioned what is being done to facilitate people-to-people connectivity between the Thai and Malaysian peoples. Dato’ Sri’ Mustapa pointed out that while there are a lot of Thai students studying in Malaysia, there are fewer Malaysians studying in Thailand. Bilateral tourism flows should also be increased. He stressed that mechanisms should be sought to better connect younger people from each country.

Also discussed was the ongoing security situation in southern Thailand, with Dato’ Sri’ Mustapa pointing out that many Malaysians are worried about violence spilling over the border. He stated that the Malaysian government is currently facilitating peace talks in southern Thailand, with the hope that more security will allow more fluid traffic.

 

Concluding thoughts


In conclusion, panellists believe that ASEAN can no longer rely too heavily on external markets such as China in light of present circumstances. ASEAN must ultimately look more to their “inner strengths” moving forward, and find ways to increase intra-trade through greater liberalisation as well as infrastructure development. Ultimately, Malaysia and Thailand can lead the way in propelling ASEAN connectivity with a common vision and stronger political commitment.