The Greater Mekong Subregion (GMS) economic cooperation program was established
in 1992 on the initiative of the Asian Development Bank (ADB). The group currently
consists of the six countries that the Mekong River has passed through since time
immemorial, i.e., Cambodia, the People’s Republic of China (PRC) (Yunnan Province
and Guangxi Zhuang Autonomous Region), the Lao People’s Democratic Republic (Lao
PDR), Myanmar, Thailand, and Viet Nam. It can be said that the history of the Mekong
region is in fact the history of relationships among these six countries. In times of
peace, the Mekong, like a mountain pass, served as a trade route, though the earliest
recorded history of formal trade dates only to the 19th century and to the first half of
the 20th century. At that time, treaties between Siam (now Thailand) and the French
colonial government on behalf of its protectorates in Indochina (as Cambodia, Lao
PDR, and Viet Nam were called at the time) regulated the navigational use of the Lower
Mekong. It was also during the colonial period that borderlines were drawn. Prior to that,
“In the days when there were no international frontiers, mountain ranges and rivers served
as boundaries between neighbouring countries, and thus, naturally, the Mekong served
as the boundary line between these riparian states” (Mya Than 1997).
During the colonial period, the Mekong region was divided politically into 4 parts:
French (Cambodia, Lao PDR, and Viet Nam), British (Myanmar); Thailand (never
colonized); and Yunnan (then an independent region). These divisions made economic
relations difficult though informal cross-border trade did exist. After World War II, the
Mekong countries were divided into three groups: pro-West (Thailand), pro-Soviet
(Cambodia, PRC, Lao PDR, and Viet Nam), and neutral Myanmar. During this period,
trade was minimal due to seemingly unending armed conflicts, doctrinaire socialist
ideologies, and an appalling lack of infrastructure.
Since the end of the Cold War, the command/control economies in the region have
gradually transformed into market-oriented systems, and cross-border trade has been
formalized. Myanmar signed trade agreements with the PRC in August 1988 and with
Thailand in June 1996 though informal trade and smuggling have persisted. In fact,
traditional/exchange trade along the narrow strip on both sides of the Myanmar-Thai border
has existed for a long time though more pronounced informal trade and smuggling started
soon after the military took power in Myanmar in 1962. (The junta nationalized most of
the economy which resulted in serious shortages of consumer goods.) Nevertheless, because
of these trade agreements, the Government of Myanmar has increased revenues from custom
duties, barter trade can be done without using foreign exchange in some cases, and security
and development in the border regions have been enhanced. Border trade is in fact becoming
increasingly important with improvements in political relations and infrastructure among
GMS neighbors. Unlike traditional cross-border trade, today’s trade includes economic
and technological cooperation and mutual exchange markets (He Shengda 2005).
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Cross-border trade is significant not only for Myanmar but for the PRC and Thailand
as well. In 2001/02, formal border trade accounted for more than 9% of the total overseas
trade from Myanmar’s international ports. In 2003/04, Yunnan’s share of Myanmar’s
total border trade was 72.8% and that of Thailand was 14.4%. According to the Thai
Farmers Research Center Co. Ltd. (August 7, 2002), Thai-Myanmar border trade
accounted for some 70% of overall trade between the two countries. Similarly, in
terms of value, Yunnan-Myanmar border trade accounted for 68.7% of the total (He
Shengda 2005). Despite these thriving economic relations, however, no reports exist
on cross-border economic activities although border trade among the Mekong countries
is mentioned very briefly in an ADB report (Preinvestment Study for the Greater Mekong
Subregion: East-West Corridor, vol. 1. Integrated Report. 2001).
Among GMS countries, Myanmar shares borders with the PRC (Yunnan Province),
Lao PDR, and Thailand, but since Lao PDR and Myanmar do not share a land border,
cross-border economic relations between the two are almost nonexistent. Thus, this
study is limited to Myanmar’s cross-border economic activities and economic cooperation
with Thailand and Yunnan Province. Section II discusses all forms of cross-border trade
from each country’s perspective. In Section III, recent developments in tourism are
addressed. Cooperation in terms of investment, labor, infrastructure, and services is
analyzed in Section IV. The conclusion addresses the prospects, issues, and challenges
of cross-border economic relations.