The government also needs to improve communication with Korean companies, emphasised Kwon Pyung-oh, president and chief executive officer of the Korea Trade and Investment Promotion Agency (KOTRA), speaking at a trade fair on Friday.

KOTRA has set the target of a 5 per cent increase in Thai-Korea trade for 2019, through holding various events and projects such as the Korean Brands and Entertainment Expo (KBEE), which was held last Friday.

However, in the first quarter of this year, Thai-Korea trade declined by 1.14 per cent, or US$4.47 billion (Bt140.22 billion) over the same period as last year. Thailand exported $1.57 billion (Bt49.25 billion) worth of goods to South Korea, a 4.13 per cent contraction year over year, according to the Thai Commerce Ministry.

The trade volume between the two countries achieved a record high in 2011 at $13.8 billion according to the Commerce Ministry.

“But after four consecutive years of decline due to political instability in Thailand and natural disasters, Thai-Korea trade started to recover again from 2016 to the present,” said Kwon in an interview with The Nation.

In 2018, Thai-Korea trade reached $13.7 billion in value, almost topping the record value in 2011, according to the Thai Commerce Ministry.

As soon as the new government of Thailand was inaugurated and economic policies become visible, Kwon said, business predictability will be improved and that would have a positive impact on trade and investment sentiment between the two countries.

Korean companies have been voicing their complaints that Thailand presents a variety of regulatory challenges to operating here, and this affects trade and investment, Kwon claimed, declining to elaborate on any specific regulation.

The Thai government should also establish closer communication with Korean companies, especially those that are exporting to Thailand or are currently located in the Eastern Economic Corridor (EEC), he said.

Currently, there are 400 Korean companies in Thailand, many of which are located in the EEC. Of these companies, 210 are in the manufacturing sector, according to the KOTRA president.

“KOTRA will cooperate with the Thailand Board of Investment (BOI) and the EEC Office to increase the number of Korean companies interested in Thailand,” Kwon continued. “However, there are still many Korean companies that do not know much about the business potential in Thailand – especially Korean startups, which are on the rise.”

Kwon called on the Thai government to step up its publicity efforts and communicate more with Korean companies in order to attract increased investment into the EEC.

He said that thus far neither trade nor investment between the |two countries was as high as it should be.

While the US-China trade conflict presents a risk factor for both Korean and Thai companies, Kwon remained optimistic.

He highlighted the possibility of diverting investment to Thailand, as many Korean companies producing in China may start to relocate their production bases to the Kingdom.

He told the 4th Emerging Asia Banking and FinTech Summit 2019 on Tuesday that Myanmar had fully drawn up the road map, which would be officially launched once approved by the cabinet.

“It is now in the final stage, and we expect it to come up in the second half of this year, as early as next month,” he said.

With the support of the United Nations Capital Development Fund, the road map will aim to improve the nation’s financial sector in the next few years until 2022. It will oversee three key sectors – demand, supply and regulations.

“In our view, MAP means making access possible. We will help businesses meet their target markets, improve the whole landscape and reduce regulatory barriers,” he said.

According to the official, the road map aims to improve financial access, usage and quality of financial services to all. It will mainly focus on four areas – supporting the national financial inclusion strategy and implementation plan, elevating capacity building to enhance the ecosystem, promoting innovations via digital platforms and increasing awareness on financial education and consumer protection.

“We will increase formal financial inclusion from 48 per cent last year to 60 per cent by 2022,” he said.

The officials said all the stakeholders must work together on a wide range of affordable, quality financial services to support job creation, poverty reduction and household resilience.

“In a country like Myanmar, financial inclusion is a topic of growing importance. At the FRD, we play a supervisory role in the insurance and micro-finance sectors. We have liberalised the insurance and banking sectors over the past few months,” he said.

The government will select foreign insurers to form joint ventures with local providers under a 35 per cent ownership cap. Insurance providers need to invest 30 per cent of the US$14-million (Bt438million) licensing fee in government bonds. The move will provide a boost to Myanmar’s economy and spark further investor interest.

Fintech has been identified as an effective vehicle to drive true financial inclusion, given the rapid mobile penetration rate in Myanmar. Within the next two years, telcos are expected to cover more than 90 per cent of the population.

This increased data and online access will continue to pave the way for more innovation and opportunities.

Myanmar is uniquely positioned to achieve large-scale financial inclusion with the aid of the mobile revolution, the official said.

“In Myanmar, fintech companies and corporations are contributing to the nation’s rapid development, and the increasing smartphone penetration will offer low cost, user-friendly digital financial products,” he said.

He sees rapid advancement in technology changing the way of financial products, and Myanmar’s financial industry gradually growing by utilising new fintech solutions.

“The capital market is something lagging behind due to Myanmar’s business tradition,” he said.

The official said Myanmar would also control the licensing of new mobile financial services. To date, 181 companies are officially providing mobile financial services in the market.

“Every month, we receive around 10 new applications for mobile financial service licences. We are reviewing them in line with our policies for poverty reduction,” he said.

“In the past, the minimum capital to establish an MFI was only 3 million kyat (Bt614,000). Now, we have raised it to 100 million kyat for non-deposit-taking MFIs and 300 million kyat for deposit-taking MFIs. But we still have some restrictions for deposit-taking MFIs. For example, they are not allowed to take deposit from the public. Instead, they are permitted to get deposits from their corporate partners.”

The official insisted that Myanmar does not allow shadow banking to prevent conflict of interest between banks and mobile financial services.

Speaking at the conference, Chelsea Phua, partner and head of technology and fintech at Klareco Communications, said she believed the banking and insurance sectors are able to leverage technology and new regulations to change the lives of millions in a positive way, given the rapid digital transformation of Myanmar’s economy.

“Sound business strategies, an understanding of market needs and the ability to communicate these strategies and impact will enable companies in these sectors to ride the momentum,” she said.

Phua said clear and effective communication to targeted audiences could help companies build trust with their stakeholders, rise above the competition and become leaders in their fields.

The DEPA, along with Frost and Sullivan, has conducted research on technological trends in the country and identified the five technologies that will be increasingly adopted in the years from 2020 to 2025. They are: data analytics, distributed ledger technology (blockchain), artificial intelligence, next-generation telecom (5G) and the internet of things.

Currently, Thailand graduates 20,000 technology-oriented student each year from local universities, with 13,000 graduates entering industries related to digital technology and automation, noted Nuttapon Nimmanphat-charin, president and chief executive officer of the DEPA.

He was speaking yesterday at “Thailand’s Digital Technology Foresight” seminar, held jointly by the DEPA and Frost and Sullivan. Of the 13,000 graduates, 54 per cent enter jobs supporting the new technological industries, while the remaining 46 per cent take jobs directly related to digital technology development.

However, Nuttapon continued, these technological industries require an additional 40,000 talents per year, leaving Thailand facing an imminent and severe shortage of skilled labour.

To cope with this issue, DEPA has been taking canvassing tech-firms such as Google, Microsoft, Cisco and Huawei for curriculum suggestions.

“We have received a total of 84 curricula from these four organisations and our plan is to categorise these and offer official certificates to people who graduate from these programmes,” the DEPA head told reporters on the sidelines of the seminar.

The plan will be proposed to the new government once it is established, with a working target to implement the certificates by the fourth quarter of this year.

The certificate is aimed to increase the number of skilled labourers in Thailand in order to answer the demand from new technological industries. Hence, these programmes will focus on developing coding, data analytics or other relevant practical skills.

Lasting from six months to a year, the programmes will be taught both online and at university campuses, as well as by the four participating tech-companies, Nuttapon said. The annual production of people with tech skills will increase with the contribution from the programmes, and help move toward the set target of 40,000 local talents graduating yearly by 2022.

Certain economic sectors in Thailand are more adept at technological transformation than others, Richard Wong, vice president of Frost and Sullivan told the seminar. For example, financial institutions and the telecommunications sector have been faster to implement new technologies, while SMEs, the agriculture and tourism sectors, among others, have been less resourceful to date, he said.

The DEPA should develop and focus on the latter group, Wong suggested. In addition to being Thailand’s core sectors, they are also major contributions to the country’s GDP. Furthermore, the DEPA should recruit and leverage talent from regional and global grounds to help build and support new talent creation locally. For example, Wong said, the DEPA should recruit international talent in blockchain technology to help build skills in coding languages and architecture required in blockchain implementation.

Thai trade officials have been juggling for a negotiating slot with the EU, after talks for a Thai-EU FTA were halted back in 2014 following the military coup.

Thai and EU trade officials will meet today in Brussels, Belgium to discuss the possibility of revitalising the talks. However, as Thailand is in the process of forming a new government, specific details related to a potential trade deal will not be discussed at the upcoming meeting, said Auramon Supthaweethum, director-general of the Commerce Ministry’s Department of Trade Negotiations (DTN).

Thailand is preparing for official negotiations to begin in the second half of this year, she said.

Meanwhile, the ongoing US-China trade tensions have caused a slowdown and decline in global trade since mid-2018. This was reflected in Thai-EU trade, which grew year on year by a mere 6 per cent in 2018 compared to the 10.8 per cent growth in 2017. The trend came into sharp relief in the first quarter of 2019, which saw Thai-EU trade decline of up to 11 per cent compared to the same period of last year.

In the first four months of this year, Thai-EU trade was valued at US$13.4 billion (Bt420.3 billion), with Thai exports valuing at $7 billion (Bt219.6 billion) and imports at $6 billion (Bt188.2 billion). This marked a significant decline in bilateral trade between the trade partners, which stood at $15.1 billion (Bt473.7 billion) in the first quarter of 2018.

Thai-EU trade will continue to decline in the second half of this year, with dim prospects in the next decades if the Kingdom is unable to swiftly act to negotiate a trade deal with the European bloc, warned Aat Pisanwanich, director of the University of the Thai Chamber of Commerce’s Centre for International Trade Studies (CITS).

“This is due to the fact that Vietnam, a key competitor of Thailand in terms of exports, has established an FTA with the EU that will become active in the third quarter of this year,” he said.

Vietnamese goods that compete with Thai goods, Aat said, such as electrical appliances, rice and fruit, will become even more competitive due to the lower tariffs in place after the FTA is activated. This would reduce Thailand’s market share of goods in the EU and lead to long-term negative impacts on Thai exports unless a Thai-EU trade agreement is soon put in place.

Research from the CITS suggested that after the Vietnam-EU FTA kicks in, Vietnamese exports to the EU would increase from $50 billion to $70 billion annually. This will reduce Thai exports by $20 billion in the second quarter of this year, and $40 billion in the next two years.

Judy Baker, lead economist for social, urban, rural and resilient global practice at the World Bank, said Myanmar must urgently address key challenges to meet the growing needs of citizens in cities.

The challenges include lack of access to piped water, traffic congestion, informal settlements, infrastructure needs, lack of inclusive growth and skilled workers, spatial inclusion, inequitable opportunities, lack of transparency and fair decision making.

“The increase in urban population has begun to put a severe strain on cities, particularly Yangon,” she said.

Baker stressed the need for affordable housing, infrastructure and services. She said urbanisation in Myanmar emerged from migration unlike many other countries.

“The key driver of urbanisation here is migration. The population density in Yangon is 10 times higher than the national average,” she said.

“About 30 per cent of the population lives in cities. In terms of migration, a lot of people are moving to Yangon and key destinations. When compared to other Asean countries like Indonesia and Thailand, Myanmar still has a way to go.”

She said the city’s population is expected to increase 34 per cent by 2030, as Yangon produces 25 per cent of the nation’s gross domestic product and is home to nearly 30 industrial zones.

“The coverage of basic services is quite low. Many people in cities have lack of access to basic social services,” she said.

She warned of a rise in the number of informal settlements, as new residents could not afford the existing supply of housing. If left unaddressed, this will lead to further congestion, slums, pollution, and put a drag on opportunities for growth, she said.

“Cities like Yangon and Mandalay present significant opportunities but some groups do not benefit from them, as inequality becomes higher,” she said.

According to the economist, more jobs are still needed in the formal sector, as only 20 per cent of Myanmar workers have permanent wage jobs.

“The majority do not have regular wages or benefits. Nearly 80 per cent of the workers in urban areas work in microenterprises,” she said.

Citing a survey conducted in 2016, Baker said the firms in Yangon and Mandalay considered finding skilled workers as the biggest obstacle.

She also stressed that Myanmar must tackle the shortage of affordable housing, as only 25 per cent of Yangon residents live in formal housing.

“With estimated 7 to 15 per cent of urban dwellers living in slums, high informality is a problem here,” she said.

“In Myanmar, a few subgroups are vulnerable to exclusion in the urban context _ internal migrants, the urban poor, people with disabilities, and some ethnic and religious minorities,” she said.

She underscored the need of strong institutions and good governance to build competitive and sustainable cities. The government should encourage public-private partnership projects and how they can be scaled up, she said.

“Local governance is often hampered due to limited implementation of policies, financial resources, and technical capacities,” she said.

The report highlights four key priorities for inclusive cities in Myanmar – to invest in sustainable urban infrastructure and upgrading, to build resilience to mitigate shocks, to facilitate access to legal documentation, to build capacity and new financing sources.

At the launch, Myint Naing, deputy director general at the Department of Urban and Housing Development, lauded World Bank’s support to addressing urban challenges in Myanmar.

“We fully recognise problematic urban challenges, and are trying to address traffic congestion, shortage of urban infrastructure with a focus on electricity and water, housing shortage and slum expansion,” he said.

“We are facing the lack of urban science in our education [system] and lack of capacity to address urban issues.”

The official said Myanmar’s economic pattern must be changed, shifting focus on agriculture to resources-based and services-based economy.

“Urbanisation is an inevitable phenomenon for Myanmar’s development pathway and we must prepare to ensure our readiness for urbanisation,” he said.

He said Myanmar needs to analyse the urban agenda and set up urban policies, strategies and plan to overcome urban issues. To this end, improving urban knowledge is a starting point for the road to urbanised Myanmar.