Border Economic Zones and Development Dynamics in Thailand: A Comparative Study of Bordering Countries (Cambodia, Lao PDR and Myanmar)

i
BORDER ECONOMIC ZONES AND DEVELOPMENT DYNAMICS IN THAILAND:
A COMPARATIVE STUDY OF BORDERING COUNTRIES
by
Choen Krainara
A dissertation submitted in partial fulfillment of the requirements for the
degree of Doctor of Philosophy in
Regional and Rural Development Planning
Examination Committee: Professor Jayant Kumar Routray (Chairperson)
Dr. Mokbul Morshed Ahmad
Dr.Winai Wongsurawat
External Examiner: Dr.Sergio Peña
Associate Professor
Urban and Environmental Studies Department
El Colegio de la Frontera Norte
Ciudad Juárez, Chihuahua, Mexico
Nationality: Thai
Previous Degree: Master of Science in Urban Environmental
Management
Asian Institute of Technology
Thailand
Scholarship Donors: Royal Thai Government Fellowships;
AIT Fellowship Scheme and the Mekong Institute
Asian Institute of Technology
School of Environment, Resources and Development
Thailand
August 2016

iii
Acknowledgements
The author would like to express his deepest gratitude to his Advisor Professor Dr. Jayant
Kumar Routray for providing vigorous guidance and inspiration throughout the course of
research. The researcher is extremely grateful to his Committee Members consisting of
Associate Professor Dr.Mokbul Morshed Ahmad and Dr.Winai Wongsurawat for contributing
helpful comments and suggestions to advance this research.A particular encouragement to the
researcher for furthering doctoral study were supported by his respective superiors at the
Office of the National Economic and Social Development Board (NESDB), namely H.E.
Arkhom Termpittayapaisith Former Secretary-General of NESDB and Dr.Porametee
Vimolsiri, current Secretary-General of NESDB.
The researcher would also like to express gratefulness to those who rendered various
assistances during field research work. Notable thanks are extended to Chief of Aranyaprathet
district of Sakaeo province for providing insight on local border settings and facilitation of
cross-border movement for doing field research in adjacent O‟Chrov district of Cambodia. A
particular appreciation is extending to the Governor of Banteay Meanchey province of
Cambodia for granting an interview and facilitation field research in Cambodia. Specific
thanks are extended to both H.E. Apichart Petcharatana, Former Thai Consul-General in
Savanakhet province. Thankfulness is accorded to the Governor of Savannakhet province for
granting an interview and facilitating research work in Lao PDR. Special thanks are given to
Mr.Amonvit Onchanom for rendering accommodation during field research in Muang
Mukdahan district. Notable thanks are extended to Dr.Therdkiat Chinsoranan, Mayor of
Maesod City Munipality and Mr.Pramote Chantasri of Maesod Municipality for facilitation, as
well as arranging accommodation during field research in Maesod district. A particular
appreciation is also extended to all respondents for providing insightful information.
Likewise, he wishes to express particular gratitude for various forms of assistances being
given by Mr.Viroj Naosuwan, his close friend. As well, a special notes of thanks goes to the
Royal Thai Government, AIT and Dato‟ Faudzi Naim Noh and friends for generous supports
in providing scholarships and research grant. Additional special thanks are extended to the
Mekong Institute for rendering partial research grant.

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Abstract
Economic interdependence between Thailand and surrounding less developed countries has
increasingly become much closer since the last few decades. Yet, considerable development
gaps seem to be widening due to stark differences on stages of development causing
persistently “asymmetric relations”. Since 2003, Thailand has planned to promote integrated
development of border economic zones (BEZs) with bordering countries. However, it is little
known on how Thailand could further advance such initiative. The aim of this study is to
assess the locational advantages, economic and social linkages and development potential of 3
strategic cross-border regions along the GMS economic corridors linking Thailand with
bordering countries. The study areas included (1) Aranyaprathet district in Sakaeo province
connecting with O‟Chrov district in Banteay Meanchey province of Cambodia; (2) Muang
Mukdahan district in Mukdahan province linking with Kaysone Phomvihane district of
Savannakhet province in Lao PDR; and (3) Maesod district in Tak province connecting with
Myawaddy district in Kayin state of Myanmar. The study is primarily a quantitative research
design supplemented by a qualitative research design. Secondary data sources were collected
from various literatures and statistics. Primary data sources constituted 6 types of
questionnaires, which were conducted during 2009 to 2012. Primary data collection methods
included reconnaissance and questionnaire surveys, non-participant observation, key
informant interview and focus group discussion. The study employed locational, trend and
comparative cross-border analyses, as well as policy and SWOT analyses.
The study found that development of BEZs in Thailand is intermittent and currently is moving
forward. Fostered by both geographical adjacency of structural differences and the
contributing factors, the pattern of local and regional cross-border trade, as well as cross-
border transit trade have shown a rising trend. Macro cross-border trade with Cambodia, Lao
PDR, Malaysia and Myanmar during 2008-2013 has reached significant level sharing average
of 30.77 % to intra-ASEAN trade. Similarly, the share of cross-border trade to Thailand‟s
aggregate international trade with the world significantly rose from 1.02 % in 1996 to 6.48 %
in 2012 or equivalent to 7.67 % of Gross Domestic Product. Regarding comparative cross-
border analyses, most of cross-border trader respondents across the regions are family based
businesses and being mainly SMEs. Thai goods are widely accepted among bordering
countries. However, cross-border traded goods are mainly produced in the core area of
Bangkok metropolis and its vicinity such as eastern region. At present, Thai border cities
mainly play distribution role. Concerning border wholesaling, most of respondents across the
regions are family based businesses and belong to SMEs. There are 3 types of cross-border
supply chains in the regions. Respondents across the Thai border districts get goods mainly
from manufacturers in Bangkok metropolis and its vicinity. Whereas, respondents in the
bordering districts mainly obtain goods from cross-border wholesalers in Thailand. Relating to
border retailing, respondents across 5 border districts are mainly being informal retailers.
Except in Kaysone Phomvihane district of Lao PDR, where they are registered enterprises at
91%.
With regard to border industrial development, respondents in Thai border districts have higher
exogenous industries. Respondents across Thai border districts mostly open new factories or
services. Respondents in Thai border districts are mostly SMEs with average capital
investment is about 40 million Baht, which is much higher as compared to other districts of

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bordering regions of Myawaddy of Myanmar and Kaysone Phomvihane of Lao PDR,
respectively. On the contrary, 96.70 % of respondents in O‟Chrov district of Cambodia are
informal micro-enterprises. Generally, the Thai border districts are more industrialized than 2
bordering districts, except in Kaysone Phomvihane district of Lao PDR, which is more
industrialized than the counterpart bordering Muang Mukdahan district of Thailand. 4/5th
of
respondents in Maesod district of Thailand are manufacturers of high-end fashion goods. As a
result, Maesod district has become an important fashion cluster of Thailand. Whereas,
O‟Chrov district of Cambodia specializes in low-end fashion products. There is existent of
spatial division of labor as almost 3 quarters of respondents in Maesod district of Thailand are
domestically out-sourced productions in the form of Original Equipment Manufacturer (OEM)
from Bangkok metropolis and its vicinity.
Concerning local border communities, monthly household income notably varies across the
regions and based on residing the near city center, the more income generated. Respondents
across Thai border districts have higher monthly household income than the counterpart
respondents in the bordering districts ranging from 1.1 to 3 times. Main sources of border
household income considerably vary across the cross-border regions. Complementary linkages
exist for sources of household income between Thai border districts and the counterpart
bordering districts particularly on labor and cross-border out-sourcing activities. Employment
of immigrant labor from bordering countries is widely practiced in economic and household
sectors across Thai border districts. Since 2004, there has been expanding cross-border
investment in the form of contract farming. During 2002-2014, there was a rapid increase of
local and regional cross-border people mobility across the regions. During 2009-2014, there
was also a rapid mobility of local and regional cross-border vehicle movements across the
regions. As a result, the trend of cross-border people and vehicle mobility and cross-border
shopping across the regions are likely to increase in coming years. The research‟s findings
have both common and different features in comparison with other studies. To materialize
cross-border linkages and potential, it is rational to transform existing interdependent
borderlands towards integrated development of borderlands. Therefore, promoting overall and
integrated borderlands development strategies of 3 CBRs in Thailand linking with respective
bordering districts of Cambodia, Lao PDR and Myanmar towards ASEAN Community have
subsequently been recommended.

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Table of Contents
CHAPTER TITLE PAGE
Title Page i
Acknowledgements iii
Abstract v
Table of Contents vii
List of Tables xi
List of Figures xv
List of Maps xv
Abbreviations xvii
1 Introduction 1
1.1 Background of the Research
1.2 Statement of the Problem
1.3 Conceptual Framework
1
2
7
1.4 Objectives of the Research 9
1.5 Scope and Limitations 9
2 Literature Review
Section A:Relevant Theories and Concepts on International Trade and
Development
11
5 11
2.1 Classical and Neo-Classical Theory of International Trade 11
2.2 International Development 11
2.3 Regional Trade Bloc
2.4 Trade and Development
2.5 Spatial Division of Labor
12
12
13
Section B: Globalization, Regionalization and Cross Border-Regions 13
2.6 Relationship between Globalization and Regionalization 13
2.7 Convergent and Divergent Trends of Globalization and
Regionalization
13
2.8 Cross-Border Regions 15
Section C: Borderlands Development 17
2.9 Border Economics 17
2.10 Border Theory 18
2.11 Border Economic Zone and Applications
2.12 Consolidated Implications for Adopting Development of Border
Economic Zone Concept
18
22
3 Research Methodology 25
3.1 Type of Research 25
3.2 Type of Research Design 25
3.3 Unit of Analysis 25
3.4 Selection of Study Areas and Criteria 25

viii
3.5 Sampling Design and Procedures
3.6 Target Informants
3.7 Data Sources
3.8 Data Collection Methods
3.9 Selected Data Analyses and Techniques
25
29
29
30
31
4 Policy Analysis: Development of Special Border Economic Zones in
Thailand
33
4.1 Evolution of Special Border Economic Zone Development Policies
in Thailand
33
4.2 Detailed Policy Analysis for Upholding Development of Special
Border Economic Zones
39
4.3 Chapter Summary 46
5 Profiles of the Study Cross-Border Regions and Local Border
Entrepreneurs
Section A: Profiles of the Study Locations
Cross-Border Region 1: Aranyaprathet District of Sakaeo Province in
Thailand connects with O‟Chrov District of Banteay Meanchey Province
in Cambodia
49
49
49
5.1 Aranyaprathet District of Sakaeo Province in Thailand 49
5.2 O‟Chrov District of Banteay Meanchey Province in Cambodia
Cross-Border Region 2: Muang Mukdahan District of Mukdahan
Province in Thailand Links with Kaysone Phomvihane District of
Savannakhet Province in Lao PDR
5.3 Muang Mukdahan District of Mukdahan Province in Thailand
5.4 Kaysone Phomvihane District of Savannakhet Province in Lao PDR
Cross-Border Region 3:Maesod District of Tak Province in Thailand
Connects With Myawaddy District of Kayin State in Myanmar
5.5 Maesod District of Tak Province in Thailand
5.6 Myawaddy District of Kayin State in Myanmar
Section B: Profiles of the Local Border Entrepreneurs
5.7 Local Cross-Border Large Scale Traders
5.8 Local Border Wholesalers
5.9 Local Border Retailers
5.10 Local Border Industrial Developers
5.11 Chapter Summary
49
50
50
50
51
51
51
52
52
55
60
64
65
6 Macro Level Analysis of Cross-Border Trade Linkages and Comparative
Advantages between Thailand and Neighboring Countries
69
6.1 State of Formal Cross-Border Trade Relations between Thailand
and Neighboring Countries
6.2 Thailand‟s Bilateral Cross-Border Trade Problems with
Neighboring Countries
6.3 Factors Contributing to Expansion of Cross-Border Trade
69
75
75

ix
7 Comparative Micro Level Analysis of Local Cross-Border Flows of
Goods and Services
81
7.1 Local Cross-Border Large Scale Trading
7.2 Chapter Summary
81
101
8 Local Border Wholesaling, Retailing and Cross-Border Shopping
Activities
103
8.1 Local Border Wholesaling
8.2 Local Border Retailing
8.3 Local Cross-Border Shopping
8.4 Chapter Summary
103
114
123
132
9 Local and Regional Cross-Border Production Linkages 135
9.1 Local Border Industrial Development
9.2 Chapter Summary
135
165
10 Local Cross-Border Interactions, Employment and Household Income 167
10.1 Compositions of Local Border Population 167
10.2 Local Border Livelihoods 167
11 Regional and Local Benefits at Different Cross-Border Regions 191
11.1 Overview of Cross-Border Investment in the Form of Contract
Farming
11.2 Cross-Border People Mobility
11.3 Cross-Border Vehicle Mobility
11.4 Chapter Summary
191
195
202
207
12 Summary, Conclusion and Recommendations 209
12.1 Summary
12.2 Conclusion
12.3 Recommendations
209
216
218
13 References
14 Appendices
229
241

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List of Tables
TABLE PAGE
Table 2.1 Globalization and regionalization in East Asia: the two 14
paths in the convergence between globalization and
regionalization between 1980s and 1997
Table 2.2 The main „Growth Triangle‟ in Asia since the early 1980s 14
Table 2.3 Major features and variations in the level of interaction 16
in borderlands
Table 2.4 Development contribution of Maquiladoras/Export 19
Manufacturing Sector or Border Economic Zones
Table 2.5 Current development of border economic zones in Asia 21
Table 3.1 Number of all types of border traders and number of 26
sampling sizes in 2009
Table 3.2 Number of sampling sizes of cross-border shoppers 27
Table 3.3 Industrial developers in the study areas and number of 28
sampling sizes in 2009
Table 3.4 Number of sampling sizes for border households in 2009 29
Table 4.1 Brief integrated development policies for special border 35
economic zones in Thailand
Cross-Border Large Scale Traders
Table 5.1 Educational levels of respondents 54
Table 5.2 Nativity of respondents 55
Border Wholesalers
Table 5.4 Monthly income of border wholesalers 59
Border retailers
Table 5.7 Monthly income of border retailers 63
Table 6.1 International trade value of Thailand 70
Table 6.2 Thailand bilateral cross-border trade problems with bordering 75
countries
Cross-Border Large Scale Trading
Table 7.1 Cross-border trade segments 81
Table 7.2 Registration of businesses 83
Table 7.3 Lengths of business establishments 82
Table 7.4 Cross-border exported commodities (Multiple responses) 85
Table 7.5 Cross-border imported commodities (Multiple responses) 86
Table 7.6 Sources of procurement (Multiple responses) 87
Table 7.7 Origin of goods (Multiple responses) 87
Table 7.8 Roles of cross-border traders (Multiple responses) 90
Table 7.9 Forms of cross-border payments 90
Table 7.10 Cross-border logistics arrangements 91

xii
Table 7.11 Employment of labor 93
Table 7.12 Employment of immigrant labor 93
Table 7.13 Daily wage rates of local and immigrant labor 93
Table 7.14 Reasons for employing immigrant labor 96
Table 7.15 Cross-border movement patterns of immigrant labor 96
Table 7.16 Gender ratios of immigrant labor 96
Table 7.17 Positive impacts of immigrant labor 98
Table 7.18 Negative impacts of immigrant labor 98
Table 7.19 Cross-border transit trade 100
Table 7.20 Perceptions on condition of cross-border river bridges or 100
road links
Table 7.21 Perceptions on border banking services 100
Table 7.22 Perceptions on Customs, Immigration and Quarantine 100
services
Border wholesaling
Table 8.1 Registrations of border wholesaling businesses 104
Table 8.2 Lengths of wholesaling establishments 104
Table 8.3 Wholesale commodities (Multiple responses) 105
Table 8.8 Daily wage rates of local and immigrant labor 109
Table 8.11 Positive impacts of immigrant labor 113
Table 8.12 Negative impacts of immigrant labor 113
Border retailing
Table 8.13 Registrations of businesses 115
Table 8.14 Lengths of border retailing establishments 115
Table 8.15 Retail commodities (Multiple responses) 117
Table 8.20 Daily wage rate of engaged either local or immigrant labor 120
Cross-Border Shopping
Table 8.23 Sex of cross-border shoppers 124
Table 8.24 Marital status of cross-border shoppers 124
Table 8.25 Age of cross-border shoppers 124
Table 8.26 Original residents of cross-border shoppers 124
Table 8.27 Shopping places 126
Table 8.28 Shopped commodities 126
Table 8.29 Spending per each cross-border shopping 128
Table 8.30 Frequency of cross-border shopping 128

xiii
Table 8.31 Purpose of cross-border shopping 128
Table 8.32 Mode of cross-border transport 132
Border industrial development
Table 9.1 Reasons for locating border industries 136
Table 9.2 Establishment purposes 136
Table 9.3 Lengths of border industrial establishment 137
Table 9.4 Invested capital 140
Table 9.5 Manufactured goods or provided services 140
Table 9.6 Sourcing of raw materials 145
Table 9.7 Cross-border export of raw materials, components and 145
industrial commodities
Table 9.8 Cross-border import of raw materials, components and 146
industrial commodities
Table 9.9 Sources of labor 147
Table 9.10 Border industrial employment 147
Table 9.14 Daily wage rates for local and immigrant labor 149
Table 9.15 Positive impacts of employing immigrant labor 152
Table 9.16 Negative impacts of employing immigrant labor 152
Table 9.17 Voluntary turnover of immigrant labor and local labor 152
Table 9.18 Local backward linkage strategies 156
Table 9.19 Cross-border production linkage strategies 157
Table 9.20 Production arrangements 158
Table 9.21 Border, regional and cross-border sub-contracting linkages 158
Table 9.22 Cross-border joint ventures 158
Table 9.23 Market distributions of manufactured products or 161
provided services
Table 9.24 Cross-border logistics arrangements 161
Table 9.25 Forms of cross-border payment 161
Table 9.26 Perceptions on cross-border road or river bridge conditions 163
Table 9.27 Perceptions on border banking services 163
Table 9.28 Perceptions on Border Customs, Immigration and 163
Quarantine (CIQ) Services
Border livelihood conditions
Table 10.1 Monthly income of border households 169
Table 10.2 Monthly expenses of border households 170
Table 10.3 Border family sizes 170
Table 10.4 Home ownership 172
Table 10.5 Nativity and length of border residents 172
Table 10.6 Diverse origins of non-native local residents 172
Table 10.7 Land ownership of border households 175
Table 10.8 Main sources of household income 175
Table 10.9 Supplementary sources of household income 176
Table 10.10 Labor sources 179
Table 10.11 Employment of immigrant labor by border households 179

xiv
Table 10.14 Daily wage rate for immigrant labor 180
Table 10.15 Number of family members crossing border for jobs 182
Table 10.16 Involvements with border community-based enterprises 182
Table 10.17 Perceptions on conditions of secondary or district road in 183
the last 10 years
Table 10.18 Perceptions on current conditions of secondary roads 183
Table 10.19 Types of current community road 183
Table 10.20 Marketing channels of border agricultural produce 186
Table 10.21 Benefits gained by local border households after opening 187
the border during the last 5 years
Assessing important benefits gained at regional and local levels
Table 11.1 Cross-border contract farming between Sakaeo province 193
of Thailand and Banteay Meanchey province of Cambodia
Table 11.2 Cross-border contract farming between Mukdahan province 194
of Thailand and Savannakhet province of Lao PDR
Table 11.3 Cross-border contract farming between Tak 194
province of Thailand and Kayin state of Myanmar
Table 11.4 Cross-border people mobility between Aranyaprathet 199
border checkpoint in Thailand and Poipet border checkpoint
in Cambodia during 2002 to 2014
Table 11.5 Cross-border people mobility between Mukdahan 200
border checkpoint in Thailand and Savannakhet border
checkpoint in Lao PDR during 2002-2014
Table 11.6 Cross-border people mobility between Maesod 201
border checkpoint in Thailand and Myawaddy border
checkpoint in Myanmar during 2002-2014
Table 11.7 Cross-border vehicle mobility through 205
Aranyaprathet border checkpoint in Thailand
during 2009-2014
Table 11.8 Cross-border vehicle mobility through Mukdahan 205
border checkpoint in Thailand during 2009-2014
Table 11.9 Cross-border vehicle mobility through Maesod 206
border checkpoint in Thailand during 2009-1014
Table 12.1 SWOT Analysis of Aranyaprathet district of Sakaeo 220
province in Thailand
Table 12.2 SWOT Analysis of Muang Mukdahan district of Mukdahan 221
province in Thailand
Table 12.3 SWOT Analysis of Maesod district of Tak province 222
in Thailand

xv
List of Figures
Figure 1.1 Proposed border economic zones in Thailand and its 6
potential linkages with neighboring countries
Figure 1.2 Conceptual framework 8
Figure 2.1 Geographic scales of cross-border cooperation 17
Figure 6.1 Cross-border trades between Thailand and Cambodia 73
Figure 6.2 Cross-border trades between Thailand and Lao PDR 73
Figure 6.3 Cross-border trades between Thailand and Malaysia 74
Figure 6.4 Cross-border trades between Thailand and Myanmar 74
List of Maps
Map 1.1 GMS corridors network 2
Map 1.2 Locations of border checkpoints in Thailand 4

xvii
Abbreviations
AC ASEAN Community
ACMECS Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy
ACDD ASEAN Customs Declaration Document
ACIA ASEAN Comprehensive Investment Agreement
ADB Asian Development Bank
AFTA ASEAN Free Trade Area
AIA ASEAN Investment Area
AICO ASEAN Industrial Cooperation Scheme
AISP ASEAN Integration System of Preference
APEC Asia Pacific Economic Cooperation
ASEAN Association of South East Asian Nations
ATIGA ASEAN Trade in Goods Agreement
BOI Board of Investment
BEZ Border Economic Zone
BIMP-EAGA Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN
Growth Area
CBR Cross-Border Region
CBTA Cross-Border Transport Agreement
CEPT Common Effective Preferential Tariff Scheme
CIQ Customs, Immigration and Quarantine
CIT Corporate Income Tax
CLM Cambodia-Lao PDR and Myanmar
CLMV Cambodia-Lao PDR-Myanmar and Vietnam
ESB Eastern Seaboard
EU European Union
EWEC East-West Economic Corridor
GATT General Agreement on Tariffs and Trade
GCC Global Commodity Chain
GMS Greater Mekong Sub-region
GT Growth Triangle
IAI Initiative for ASEAN Integration
ICBTA Initial Cross-Border Transport Agreement
IGA Investment Guarantee Agreement
IMS-GT Indonesia-Malaysia-Singapore Growth Triangle
IMT-GT Indonesia-Malaysia-Thailand Growth Triangle
INDL International Division of Labor
IL Inclusion List
ISN Information Superhighway Network
KNLA Karen National Liberation Army
KNU Karen National Union
L.C. Letter of Credit
MFN Most Favoured Nation
MSMEs Micro, Small and Medium Enterprises
MTS Multilateral Trade System
NAFTA North America Free Trade Area

xviii
NEDA Office of Neighboring Countries Economic Development Cooperation
NESDB Office of the National Economic and Social Development Board
NGOs Non-Governmental Organizations
NICs Newly Industrialized Countries
NSEC North-South Economic Corridor
NSW National Single Window
OBM Original Brand Manufacturer
OEM Original Equipment Manufacturer
POSEZ Poipet O‟Neang Special Economic Zone
RTAs Regional Trade Agreements
SBEZ Special Border Economic Zone
SEC Southern Economic Corridor
SIJORI Singapore-Johor-Riau
SMEs Small and Medium Enterprises
SWOT Strength, Weakness, Opportunity and Threat
TNCs Transnational Companies
UN United Nations
U.S. United States
VAT Value-Added Tax
WTO World Trade Organization

1
Chapter 1
Introduction
1.1 Background of the Research
Rapid globalization, which primarily resulted from trade liberalization in recent decades, has
driven the process of regionalization through the formation of trade blocs notably Association
of South East Asian Nations (ASEAN) in order to foster economic complementarities and
enhances regional competitiveness. As the progress of development among ASEAN member
countries is quite diverse, the programs consisting of the GMS Development Cooperation and
an Initiative for ASEAN Integration (IAI) have been created in order to speed up the regional
integration towards the goal of ASEAN Community (AC) by the year 2015 (ASEAN
Secretariat, 2009). The potential benefits from the GMS cooperation are large; nevertheless,
different levels of development may slow down the growth and full benefits of this sub-
regional cooperation (Krongkaew, 2004). It is apparent that economic interdependence
between Thailand as developed a pocket and least developed neighboring countries have
increasingly become much closer since the last decades due to advancement of regional
cooperation. Yet, considerable development gaps seem to be widening due to stark differences
on stages of development causing persistently “asymmetric relations”. For example, labor cost
in Thailand is higher than Myanmar, Lao PDR and Cambodia at 3.7 to 5.2 times (TDRI,
2012). Thus, Thailand has attracted an estimated of 6 million unskilled immigrant labor force
and family members from these bordering countries, which has accounted for 9.39 % of total
national population, to work and live in the country (Manager Weekly, 2010).Meanwhile,
a research, which was conducted by Prince of Song Khla University, found that approximately
0.20 million southern Thai nationals out-migrating to Malaysia for jobs (Manager Online,
2008).
The illegal influx phenomenon of immigrants obviously prompts concerns over national
security in particular and subsequent multi-faceted impacts on Thai economy and society in
general. To complement the GMS, Thailand, which is located at the strategic intersection of
mainland of South East Asian region, has initiated the Ayeyawady-Chao Phraya-Mekong
Economic Cooperation Strategy (ACMECS) in 2003 in order to bridge development gaps with
bordering countries–Cambodia, Lao PDR, Myanmar and Vietnam (CLMV) by promoting
integrated cross-border development based on border economic zone concept (Ministry of
Foreign Affairs of Thailand, 2008). The GMS spatially adopts corridor development approach
with a total of nine transborder economic corridors so as to spearhead cross-border regional
development linking both intra-GMS and South Asian and East Asian regions (ADB, 2007).
Out of nine, six GMS corridors are trans-Thai territory (Map 1.1). Importantly, it strengthens
the locational advantage of cross-border regions towards emerging production and trade zones.
This sort of BEZ was pioneered by Maquiladora or export manufacturing sector, which have
been developed to promote employment along the 2,000 mile-long Mexico and the United
States border since 1965 (Weiler and Zerlentes, 2003).
In Asian region, this concept is proliferating during recent decades. Such zones have been
implemented i.e. between Guangdong province of China and Hong Kong; between Indonesia
and Singapore; between Johor Bahru state of Malaysia and Singapore and between North

2
Map 1.1 GMS Corridors Network
Source: Asian Development Bank.2007.GMS Transport Sector Strategy, Coast to Coast
and Mountain to Sea: Towards Integrated Mekong Transport Systems.
Korea and South Korea. Other existing BEZs along the GMS corridors are between China and
Myanmar; between China and Vietnam; between Vietnam and Cambodia and between
Vietnam and Lao PDR. A few BEZs are under planning and evolution process i.e. between
North Korea and China; between China and Russia and between India and Pakistan.
1.2 Statement of the Problem
Likewise, Thailand is selecting few cross-border regions to be advocated as BEZs linking with
bordering countries, which are in reverse scenario from Mexican case. This approach is
believed to help distribute growth to the backward border regions in Thailand in order to

3
significantly bridge both chronic interregional inequalities in which the Northeastern has long
been a backward region followed by Northern region and intra-regional differences. It is also
considered as a useful means for possible sharing benefits with counterpart cities in
neighboring countries particularly in the Greater Mekong Sub-region. This is due to
Thailand‟s existing economy size measured in terms of Gross National Income Purchasing
Power Parity and Gross National Income Per Capita is relatively larger than Cambodia, Lao
PDR and Myanmar. Consequently, notably different stages of economic and social
development between Thailand and those neighboring countries have been observed.
Therefore, this becomes a major influencing factor for migratory out-flow of a large number
of legally and illegally migrant labor from Myanmar, Cambodia and Lao PDR to seek for jobs
in Thailand.
Nevertheless, the advancement of physical connectivity in the form of economic corridors
coupled with a range of facilitations on trade, investment and people‟s mobility in the GMS in
particular have dynamically opened up room to advance border economic zones in Thailand.
The striking substantiation has been the robust cross-border trade flows between Thailand and
neighboring countries since the last decade which consumers in neighboring countries can
gain a wider variety of access to cheaper quality goods from Thailand. The trading patterns are
becoming quite diverse depending on their comparative advantage, division of labor and
specialization of production. This cross-border trade has mainly transacted through 71 border
points which plays important roles either as collection or distribution nodes. The locations of
these border check points appear in Map 1.2.
Above all, the trend of aggregate cross-border trade tends to be growing, while the share of
aggregate international trade is likely to be declining, which corresponds to the greater
physical connectivity and accessibility in the GMS. Thailand alone seems likely to constantly
secure favorable balance of cross-border trade with less developed neighboring countries
particularly Cambodia and Lao PDR. It is clearly justified that these border nodes in Thailand
have been playing crucial roles not only to facilitate cross-border trade and tourism but also to
offer opportunity to perform as border production platforms for goods and services, which are
in vast demands in either immediate or nearby neighboring countries. Such industrial
productions at the borders could endow with locational cost advantage particularly labor and
access to supply networks in neighboring countries. Combining locational advantages of the
major borders with supportive Royal Thai Government‟s initiative to foster closer economic
integration and cooperation with less advanced neighboring countries, it is thus rational to
place particular priority for developing border economic zones in three strategic cross-border
regions of Thailand, which are located along the GMS economic corridors as well as
overlapping with Asian and ASEAN Highways routes connecting with respective cities in
bordering countries as mentioned below:
1) Maesod district in Tak province links with Myawaddy district in Kayin state of
Myanmar. Maesod district of Tak province is currently a prominent investment platform
along Thailand-Myanmar border area. It also plays a significant role as major industrial
development location in Northern part of Thailand. Maesod district is home to labor-intensive
industry particularly for garment productions. In 2003, Tak province had 464 factories.
Maesod alone hosted 235 factories, which accounted for 51% of the whole province‟s total
investment capital of 1,500 million Baht, and it generated export values of 3,100 million Baht
per year (NESDB, 2003). The key labor-intensive industries were textile and garment, canned

4
Map 1.2 Locations of Border Checkpoints in Thailand
Source: The Customs Department, Thailand
Remarks: Temporary Border Checkpoint opens in accordance with special official permission. Local Border Crossing
opens for humanitarian reasons and for retail trade. Song Khla and Chantaburi are international checkpoints.

5
food, wood furniture, jewelry and accessories. In addition, there was increasing emergence of
service industries e.g. garage and car maintenance shops, etc. The principal reason for
investors in locating these industrial plants in Maesod was to take advantage of cheap labor
from Myanmar. In 2003, approximate 10,000 Myanmar workers were employed in Maesod
district. By developing Maesod as border economic zone, this location can help penetrate
manufactured products and services not only to Myanmar but also to Bangladesh, India,
Srilanka, Nepal and Bhutan, etc.
2) Aranyaprathet district in Sakaeo province links with O’Chrov district in Banteay
Meanchey province of Cambodia. This location can export manufactured products and
services not only to Cambodia but also Vietnam and China, etc.
3) Muang Mukdahan district in Mukdahan province links with Kaysone Phomvihane
district in Savannakhet province of Lao PDR. This location can export manufactured
products and services not only to Lao PDR but also to Vietnam, China, Hong Kong, North and
South Koreas and Japan, etc.
The proposed border economic zones in Thailand and its potential linkages with neighboring
countries are presented in Figure 1.1.

6
Figure 1.1 Proposed Border Economic Zones in Thailand and Its Potential Linkages with Neighboring Countries
Source: Adapted from Vimolsiri, P. (2008). Sub-regional Cooperation in GMS, ACMECS and IMT-GT: The Way Forward to Regional Integration,
NESDB, Bangkok.

7
Furthermore, it should be noted that the larger size of Thai economy could lead to excessive
extraction of resources from those less developed neighboring countries which can exacerbate
international development gaps in the Greater Mekong Sub-region. Therefore, it is still
challenging for Thailand to find ways in using border economic zone as a means to not only
bridge interregional and intra-regional disparities in Thailand but also to promote spillover
effects towards cross-border regional development in the Greater Mekong Sub-region in order
to ultimately help narrow international development gaps with these less advanced
neighboring countries.
In order to cultivate closer economic integration with neighboring countries, a series of
feasibility studies on establishing border economic zones in Thailand have been conducted in
specific locations e.g. Maesod district in Tak province; Mukdahan province, as well as in
Sadao district of Song Khla province and Chiang Rai province. However, the results were
general analyses and mainly emphasized on development in the Thai context with limited
empirical evidences to strengthen cross-border linkages with cities in neighboring countries.
Therefore there is non-existent of document relevant to cross-border interactions between
Thailand and surrounding less advanced countries particularly for the above mentioned 3
cross-border regions. As a result it is little known on how Thailand could further foster cross-
border co-production practices under the border economic zone framework towards integrated
borderlands development in response to increasing regional economic integration.
1.3 Conceptual Framework
The conceptual framework of the research covers an important array of cross-border
interactions and trade induced prospect for developing border economic zones in Thailand and
linkages with the cities in neighboring countries namely Myanmar, Cambodia and Lao PDR. It
is shown in Figure 1.2 below.

8
Figure 1.2 Conceptual Framework
Cross-border trade induced interactions between Thailand and
neighboring countries (Cambodia, Lao PDR and Myanmar)
Policy Instruments
Analysis of both explicit and implicit special border economic zone
development policies formulated and implemented by the Royal Thai
Government.
Joint border economic zones and development
dynamics in Thailand with respect to three
neighboring countries (Cambodia, Lao PDR and
Myanmar) for comparative analysis
-Composition
of population
-Local
livelihoods
Locational Advantages
Locational advantages of strategic cross-border regions along GMS
Economic Corridors and Asian and ASEAN Highway routes:
 Maesod district in Tak province links with Myawaddy district in
Kayin state of Myanmar;
 Aranyaprathet district in Sakaeo province connects with O‟Chrov
district in Banteay Meanchey province of Cambodia; and
 Muang Mukdahan district in Mukdahan province links with Kaysone
Phomvihane district in Savannakhet province of Lao PDR
Demographic aspect
Industry
- Types of
industries
-Local,
regional and
cross-border
out-sourcing
Trade
-Cross-border
trade
-Border
wholesale
-Border retail
-Cross-border
shopping
Investment
- Cross-
border joint
venture
Tourism
- Cross-
border
people and
vehicle
mobility
Economic aspect Social aspect
Agriculture
-Cross-border
contract
farming
- Primary
education
-Secondary
education
- Home
ownership
-Immigrant
labor
movement
Recommendations of strategies to integrate border economic zones in the context of regional and national development

9
1.4 Objectives of the Research
The broad objective of this research is to investigate the pattern and process of
development around cross-border trade points of Thailand with assessment of potential and
benefits gained through international cross-border trade with reference to neighboring
countries.
The specific objectives are:
1) To assess the locational advantages, linkages and potential with respective
neighboring countries and account for flows of goods and services through cross-
border trade.
2) To study the social and economic characteristics of the joint border economic zones
for promoting cross-border production linkages and share of employment and
income potentials.
3) To analyze the policy instruments at different levels for upholding development of
border economic zones.
4) To assess the benefits (infrastructural, services, employment and income, etc.)
gained by respective cross-border regions and more particularly at local and
regional levels.
5) To recommend and formulate strategies for integrating development of border
economic zones in the context of regional and national development.
1.5 Scope and Limitations
The research has been carried out at three cross-border regions in Thailand with reference
to Myanmar, Lao PDR and Cambodia. The underlying reasons to select these areas are
attributed to their long established and increasing linkages as a result of regional
cooperation and integration. The scope of this research will firstly focus on investigations
of locational advantages, linkages of border towns in Thailand with respective counterpart
cities in neighboring countries, as well as potential development induced by cross-border
trade flows. Secondly, it examined current demographic, socio-economic and industrial
development of the three joint border economic zones and analyzes the outlook of shared
employment and income potentials on both sides of cross-border regions. Thirdly, it
explored the policy instruments at different levels to facilitate the establishment of border
economic zones. Fourthly, it assessed the benefits (infrastructural, services, employment
and income, etc.) gained by respective cross-border regions and more particularly at local
and regional levels. And lastly, it recommended and formulated strategy for integrating
development of border economic zones in the context of regional and national
development.
In terms of limitations, there is limited availability of secondary data on socio-economic
conditions in the study areas both in Thailand and in neighboring countries. Therefore, this
constraint has been overcome by employing questionnaire survey. The research is yet
encountered limited access to secondary data particularly in border districts of Cambodia
and Myanmar. In addition, there is existent of certain restriction for a foreign researcher to
conduct such field survey in Myanmar allowing this research to be able to collect sampling
sizes of designed field surveys only at the minimum statistical requirements. All these
shortcomings could partly affect the reliability of findings especially for the study area in
Myanmar.

11
Chapter 2
Literature Review
Literature review is carried out in order to seek out theoretical and empirical developments
relevant to the research topic. It covers a range of global and regional context, key
concepts on international trade, border theories and development of border economic
zones. This can help converge greater understanding on both theoretical background and
actual practices. The coherent contents of the literature review are as follows:
Section A: Relevant Theories and Concepts on International Trade and Development
2.1 Classical and Neo-Classical Theory of International Trade
David Ricardo initially grounds classical international trade theory so called comparative
advantage in 1817.He states that other things being equal a country tends to specialize in
and exports those commodities of which it has maximum comparative cost advantage.
Similarly the country's imports will be of goods having relatively less comparative cost
advantage (Sumitr and Worabuntoon, 2004).Since then, international trade model has been
evolving over time influenced by increasing complex factors and technological changes,
which gave rise to emergent neo-classical international trade theories. Among others,
Ohlin (1933) proposes resources and trade theory, in which trade occurs from the
differences of resources between two countries. He states that a country will export goods
that use its abundant factors intensively, and import goods that use its scarce factors
intensively. In the two-factor case, he states a capital-abundant country will export the
capital-intensive goods, while the labor-abundant country will export the labor-intensive
goods. Tinbergen (1962) rationalizes the gravity model that bilateral trade between any
two countries is positively related to their economic sizes and negatively related to the
relative trade costs between them. Currently, this model has been practically applied to
analyze implications and impacts of various regional trade agreements in the world.
Krugman (1980) further conceives home market effect, which is the tendency for large
countries to be net exporters of goods with high transport costs and strong scale of
production. Hanson and Xiang (2004) conducted empirical research on the home market
effect and bilateral trade patterns. They found industries with very high transport costs;
national market size that determines national exports. For industries with moderately high
transport costs, it is neighborhood market size that matters. In this instance, national
market size plus market size in nearby countries determine national exports.
2.2 Concept of International Development
At global scale, there is existence of uneven global patterns of economic and social
development, which shapes international division of labor. Wallerstein (1974) classifies
the world into areas and nations ranging from core states, semi-peripheral and peripheral
areas, so called World System Theory. Classification depends on stage of development and
control over resources. Core areas are in geographically advantaged parts of the world such
as Europe and North America. The semi-peripheral areas are somewhat intermediate; both
being exploited by the core and take some role in the exploitation of the peripheral areas.
While the peripheral areas are the least developed; they are exploited by the core for their
cheap labor, raw materials and agricultural production. The core-periphery model is
applicable to all spatial levels. At national scale, globalization and regionalization also
affects both urban and regional development. Three perspectives are influential in
explaining the spatial divisions of labor through the emergence of regional production

12
network coordinated by transnational companies (TNCs), which contribute to the rise of
Asia as major center of global production and trade. Firstly, the new International Division
of Labor (INDL) perspective, which Frobel et al. (1980) have identified two qualitative
characteristics. These are (1) an increasing production of manufacturing goods competitive
in the world market is now situated in developing countries, and (2) there has been an
increasing subdivision and fragmentation of commodity production to take advantage of
uneven spatial distribution of factor costs through a correct combination of labor and
capital. Different parts of the labor process may now be spatially separated so that labor
intensive production can be relocated to developing countries to take advantage of the
cheap labor there. The free application of peripheral labor power applied to specific labor
processes in the cores is one distinctive trend. Secondly, to link production in developing
countries with the global economy via TNCs, Gereffi et al. (1964) have defined the global
commodity chain (GCC) approach, which is a specific configuration of sets of inter-
organizational networks clustered around one commodity or product, linking households,
enterprises and states to one another within the world economy. Thirdly, the flying geese
model is the formation of Japanese regional production networks, converged by changing
factor endowments in individual host countries and the technological superiority of
Japanese firms. As a result, the division of labor in Asia is becoming more vertical (Hatch
and Yamamura, 1996).
2.3 Concept of Regional Trade Bloc
At regional scale, globalization drives economic integration into six stages namely
preferential trading area, free-trade area, customs union, common market, economic and
monetary union and complete economic integration (Carbaugh, 2009). Since the mid-
1980s, there has been a profound change in the structure of the international economy due
to the widespread growth and internal enhancement of regional trading blocs in all parts of
the globe. Thus, countries will cooperate in regional trade blocs for two specific reasons;
one is to gain welfare ultimately for their own citizens. The second is to obstruct the
welfare gains from trade for those states that they consider unfriendly (Reardon, et al.
2002). Regional Trade Agreements (RTAs) are a major instrumental feature of today‟s
multilateral trade system (MTS). The number of preferential agreements, as well as the
world share of preferential trade has been steadily increasing over the last five decades.
Sluggish progress in multilateral trade negotiations under the Doha Development Round
appears to have accelerated further the rush to forge RTAs (Crawford and Fiorentino,
2005). As of March 2011, the GATT/WTO has been notified of 297 effective RTAs
(WTO, 2011). In East Asia alone, there were 50 agreements in place, and another 80 or so
currently being prepared (ADB, 2011). As a result, it is intensifying trend of intra-regional
trade. In 2008, the share of intra-regional merchandise trade in Europe, Asia and North
America were as high at 72.80, 50.10 and 49.80 % of total regional exports, respectively
(WTO, 2009).
2.4 Concept of Trade and Development
In terms of contribution of trade for competitiveness development, Porter (1990) conceives
internationally competitive advantage of nations for particular industry, which consists of 4
determinants namely factor conditions, demand conditions, related and supporting
industries, and firm strategy, structure and rivalry. To deepen insight on trade for
development, Krugman, Obstfeld and Melitz (2010) suggest a trade model on specific
factors and income distribution focusing on 3 factors namely labor, capital and territory.
They state a country having capital abundance and less land tends to produce more
manufactured products, while a country with territory abundance tends to produce more

13
food. Products and services to be traded obtained from industries, which use different
factors and resources in the production thus enhancing income distribution. Krugman,
Obstfeld and Melitz (2010) also introduce another standard model of trade, which
combined ideas from the Ricardian model, specific factors and the resource and trade
model. They state, under constant circumstance, the exchange rate improvement for a
country implies a substantial rise in the welfare of that country. Concerning trade for
national development, UN Millennium Project (2005) emphasized that trade openness can
be a powerful driver of economic growth, which is indispensable to reduce poverty and
foster a country‟s development. Trade alone cannot induce for achieving development; it
should therefore be associated with other institutional, macroeconomic and microeconomic
conditions plus well designed social policies to attain development. On the other hand,
opening up markets to international trade may leave local producers flooded with more
competitive foreign producers (Wikipedia, 2008). Sustained strong economic growth over
longer periods is strongly related to poverty reduction. Therefore, trade and economic
growth are strongly linked. Countries that develop always enhance their integration with
the global economy through export-led growth strategy.
2.5 Theory of Spatial Division of Labor
Massey (1984) conceives the spatial division of labor, which is a functional division
between regions within an industry. She identifies 3 types of companies consistent to their
approach to utilize the different spatial structure between regions. These are
(1) Locationally concentrated spatial structure: the company trades only in one region,
localizes its activities in this area, which means it fails to utilize regional differences;
(2) Cloning spatial structures: it identified by the company trading in several regions with
the head office located in metropolitan or core area while other branch offices are located
in the periphery regions. Branch offices are not connected much and the plants are linked
to other companies in the regions e.g. subcontractors; and (3) Part-process spatial
structure: branch offices are much less vulnerable. This system is based on branch offices
producing only a part of the product and companies locate their branch offices in regions
corresponding to the requirements of production.
Section B: Globalization, Regionalization and Cross Border Regions
2.6 Relationships between Globalization and Regionalization
Sum (2002) particularly distinguished the relationships between supranational
regionalization, which represented by the emergence of regions such as the European
Union (EU), North America Free Trade Area (NAFTA), Asia Pacific Economic
Cooperation (APEC) and Association of South East Asian Nations (ASEAN) and
globalization in two main ways. First, the „old regionalists‟ perceive regional trading bloc
formation as a means to reduce dependence on the wider global economy. This approach
stated globalization and regionalization as divergent or even opposed trends. Second, the
„new regionalists‟, in contrast, presented a geo-economic explanation to replace the „old‟
geopolitical view. They proposed regionalization strategies are no longer linked to the need
to reduce dependence on the global economy but are oriented to promoting globalization
by stimulating supply-side competitiveness at the regional level. In this form,
regionalization and globalization should then be mutually reinforcing.
2.7 Convergent and Divergent Trend of Globalization and Regionalization
Sum (2002) indicated that there are two broad types of convergent and divergent trends of
globalization and regionalization. First, deterritorilization can be understood in terms of

14
globalized flows of production, finance, information, culture and so on, which are not
territorially defined or constrained. Second, reterritorialization involves actors and their
networks that are seeking to capture these global flows and refix them in time and space.
More specifically, the de- and re-terrritorialization processes between the 1980s and the
1977 Asian crisis have promoted a general convergence between globalization and
regionalization. Sum (2002) highlighted that such convergence takes two concurrent and
interrelated paths. First, the regional-globalization direction involved local-national-
Table 2.1 Globalization and regionalization in East Asia: the two paths in the
convergence between globalization and regionalization between 1980s and 1997
Paths Structural
Contexts
Actors Involved
strategies of
re-territorialization
Examples of new
Time-space
imagination fixes
Regional-global-
ization
Embedded
exportism
Local-national-
regional actors
and their
networks
New (sub)-regional
division of labor
Growth triangles,
„ flying geese‟
Global-regionali-
zation
Global
neoliberalism
(„Washington
Consensus‟)
Global
hegemony
(the US)
Trade/investment
liberalization and
regional market
access
APEC‟s „open
regionalism‟
Source: Sum, N-L. (2002). Globalization, Regionalization and Cross-Border Modes of Growth in East Asia:
the (Re-) Constitution of „Time-Space Governance‟, in Perkmann, M. & Ling Sum, N. (Eds.), Globalization,
Regionalization and Cross-Border Regions (pp.50-76). New York: Palgrave Macmillan.
Table 2.2 the Main ‘Growth Triangles’ in Asia since the Early 1980s
Name Date of inception Possible sources of ‘ export
competitiveness’
„Greater China‟
ASEAN ‘growth triangle’
Indonesia-Malaysia-Singapore
Growth Triangle (IMS-GT)
Indonesia-Malaysia –Thailand
Growth Triangle (IMT-GT)
Brunei Darussalam-Indonesia-
Malaysia-Philippines East ASEAN
Growth Area (BIMP-EAGA)
ADB ‘growth triangle’
Tumen River Area Growth Triangle
Greater Mekong Sub-region
Early 1980s
1989
1993
1994
1991
1991
Cross-border manufacturing of
labor- intensive products
Production relocation from
Singapore to Johor and Riau
Improvement of infrastructural links
and enhancement of sub-regional
competitiveness
Joint natural resources development
and transport linkages
and improvement of infrastructural
links
and improvement of infrastructural
links
Source: Adapted from Ling Sum, N. (2002). Globalization, Regionalization and Cross-Border Modes of
Growth in East Asia: the (Re-) Constitution of „Time-Space Governance‟, in Perkmann, M. & Ling Sum, N.
(Eds.), Globalization, Regionalization and Cross-Border Regions (pp.50-76). New York: Palgrave
Macmillan.

15
regional actors taking the initiatives to reterritorialize the global flows of production,
finance and trade across bordering spaces. Second, the global-regionalization track can be
seen in terms of global actor seeking to regionalize their global neoliberal „regime of truth‟
and practices in Asia-Pacific through the APEC. The emergence and expansion of cross-
border regions or „growth triangles‟ in East Asia can be seen as part of the first path, in
which regional-national actors expand and relocate „embedded exportism‟ to new sites.
Please see the convergence of globalization and regionalization in East Asia in Table 2.1
below. There were linkages between the growth triangles and APEC. The growth triangles
play facilitating role, while the APEC serves as enabling role.
Sum (2002) commented that the loosely organized network nature of the APEC and the
lack of formal agreement have provided room for further expansion of embedded
exportism‟ commenced by other NICs, for example, Singapore. Taking on the success of
the self-organized activities across the „Greater China‟ border, Singapore constructed the
cross-border region of Singapore-Johor-Riau (SIJORI)/Indonesia-Malaysia-Singapore
(IMS) as a „growth triangle‟ (GT) in December 1989. The identification of this cross-
border space as „growth triangle‟ stressed the „complementarities‟ of these sites in building
sub-regional economic cooperation. During the early 1980s and the 1997 Asian crisis, there
were three stages of „growth triangle‟ development‟ namely stage 1 with ethnic networking
(Greater China); stage 2 with outward-oriented investment regions (for example, SIJORI);
and stage 3 growth triangle as portable strategy or ADB program. Simultaneously, Japan
also sought to further its regional-globalization by initiating the „growth triangle‟, which
considered as powerful tool for the promotion of export competiveness. Than et al. (1994)
cited in Sum (2002) found five key factors of success in different „growth triangles‟
consisting of economic complementarity, geographical proximity, policy commitment,
policy coordination and infrastructural development. Please see the main „growth triangles‟
in Asia in Table 2.2.
2.8 Cross-Border Regions
At cross-border scale, Perkmann and Sum (2002) have termed cross border region (CBR)
is a territorial unit that comprises contiguous sub-national units from two or more nation-
states. Than (1997) citied by Jessop (2002) states that trade, based on geographical
proximities and complementarities, has flourished throughout history at the regional and
sub-regional level unless participating countries have prohibited cross-border transactions
for political, security or economic reasons. CBRs may engage creating competitive
advantage by exploiting complementarities among sources of supply, for example
Singapore-Johor-Riau (SIJORI) growth triangle, EU member states and post-socialist
economies. Jessop (2002) proposes that there are at least 9 ways, in which CBR have
emerged. These are (1) CBRs may result from recent selective reinforcement of obscure
forms of economic and political organization that have long existed on the borders of
states, even if disapproved by their respective national states; (2) CBRs may involve a
resurgence of suppressed (but potentially still viable) historical economic spaces following
the end of the cold war and the collapse of the Iron Curtain. The examples are Greater
China, the Greater Mekong Sub-region and the Singapore-Johor-Riau (SIJORI) growth
triangle; (3) CBRs may emerge from or be reinforced by the spillover of metropolitan
hinterlands and/or the development of complementary towns either side of a shared border;
(4) CBRs may come from creation of new functional economic spaces, where there are
complementary resources, common problems or a shared peripheral status prompting a
need for cooperation on issues such as the environment or transport infrastructure. The
examples consist of growth triangles, export-processing zones, innovation setting, gateway

16
cities and learning regions; (5) CBRs may be promoted by national states in the hope of re-
stabilizing the national scale and enabling national economies to compete more effectively.
This involves re-bordering and de-bordering; (6) CBRs may be supranational bodies that
promote CBRs to undermine the national scale through an initiative arising from above and
below; (7) CBRs may be a reaction to uneven development linked with other sub-, supra-,
or transnational region-building processes. Examples are foreign direct investment has
reinforced the primacy cities and core growth regions in ASEAN, and stimulated a concern
to promote growth triangles and cross-border regions in more peripheral areas; (8) CBRs
may emerge as part of national-building projects in multinational territorial states. This
may reflect the need to enhance national autonomy within a federal state; and (9) CBRs
may emerge from career and institution-building initiatives as political entrepreneurs
exploit opportunities created by the crisis of the national scale, melting of the cold war, the
availability of EU policies and grants, supranational deregulation allowing regional
regulation, the development of new infrastructure and logistics, and so on. There are two
broad classifications of CBRs. Martinez (1994) as cited by Yang (2006) categorizes four
paradigms of cross-border interactions, namely alienated borderlands, co-existent
borderlands, interdependent borderlands and integrated borderlands. Features of these
paradigms of cross-border interaction are illustrated in Table 2.3.
Table 2.3 Major Features and Variations in the Level of Interaction in Borderlands
Types of borderlands Features Degree of
transnationalism
1.Alienated
borderlands
1. Tension prevails.
2. Border is functionally closed, and cross-
border interaction is totally or nearly totally
absent.
3. Residents of each country act as strangers to
each other.
None to low
2.Co-existent
borderlands
1. Stability is an on and off proposition.
2. Border remains slightly open, allowing for
the development of limited binational
interaction.
3. Residents of each country deal with each
other as casual acquaintances, but borderlands
develop closer relationships.
Low to moderate
3. Interdependent
borderlands
1. Stability prevails most of the time.
2. Economic and social complementarity
prompts increased cross-border interaction,
leading to expansion of borderlands.
3. Borderlands carry on friendly and
cooperative relationships.
Moderate to high
4. Integrated
borderlands
1. Stability is strong and permanent.
2. Economies of both countries are functionally
merged and there is unrestricted movement of
people and goods across the boundary.
3. Borderlands perceive themselves as
members of one social system.
High to very high
Source: Martinez (1994) cited in Yang, C. (2006). The Pearl River Delta and Hong Kong: an evolving cross-
boundary region under” one country, two systems‟, Habitat International 30, 61-86.

17
While Krätke (2002) discerns three types of cross-border cooperation based on different
geographical scales of cross-border linkages between regional economies. They are Type
A: Long-distance international cooperation (the impact does not directly affect the border
region; although, it might have the effect of detracting possible investments from the
border region); Type B: Supra-regional structured cooperation (it omits one part of the
border region, including the linkage between firms in one part of the border region and
firms located outside the border area in neighboring country); and Type C: Regionally
integrated cooperation (it involves a linkage between firms on both sides of the border
within the border area). Specific features of types of cooperation are exhibited in Figure
2.1.
Source: Kratke, S. (2002). Cross-Border Cooperation and Regional Development in German-Polish Border
Area, in Perkmann, M. & Ling Sum, N. (Eds.), Globalization, Regionalization and Cross-Border Regions
(pp.125-147). New York: Palgrave Macmillan.
Figure 2.1 Geographic scales of cross-border cooperation: Type A-long distance
pattern (international); Type B-supra-regional; Type C-regionally integrated
Section C: Concepts on Borderlands Development
2.9 Concept of Border Economics
Fullerton (2003) argues that border economics is still a new subject area. It has originated
from growing recognition to study economic phenomena within the unique contexts
entailed by geo-politics. It is now gaining much attention due to greater cross-border
economic integration in many regions of the world. He highlights key features of border
economics, which are being undertaken research efforts in the five variables:
 Population: Many studies involve border between economies that are characterized by
substantial income differentials such as Mexico and the United States. When accompanied
by high rates of joblessness, income disparities between countries frequently result in
migratory outflows from low earnings regions to higher income markets.
 Business cycle transmission: Economic integration in association with rapid financial

18
and commercial liberalization influence border economic performance including retail
border trade.
 Exchange rates: Most border economies still conduct business transactions that are
affected by exchange rate transaction in addition to the world wide emergence of dominant
currencies such as the dollar and the euro. Impacts of currency market fluctuation on retail
segments in border contexts have been directly studied.
 Industrial development and labor markets: Devaluation of currency can accelerate
foreign direct investment for example in Maquiladora or export manufacturing sector,
which both sides of the border/city pairs gained benefits. It may nevertheless not be the
case in other parts of the world. Cross-border industrial linkages influence a wide range of
regional economic outcomes.
 Natural resources economics: Environmental consequences of industrial expansion
and economic growth at border regions is one of major concerns particularly on negative
externalities. It is challenging to jointly manage and utilize natural resources and public
utility e.g. energy services.
2.10 Border Theory
Several studies conceive borders from a spatial perspective, which are derived from
international trade, location and central place theories. For instance, Alegria (1989) as cited
by Peña (2005) categorizes two central premises that determine the inter-urban hierarchy
of border space. (1) The origin, destination and intensity of the flows (capital, goods and
labor) are the key to differentiate the interaction of simultaneous processes in one space-
national, transborder and transnational, and (2) the geographical adjacency of structural
differences (price, quality of goods and choices, etc.) intensifies transborder processes.
Krugman and Livas (1992) differentiate between dynamic and static comparative
advantages of regions. Dynamic advantages are those variables that differ across regions
and that are directly related to productivity such as human capital and physical capital.
Static advantages are those attributes that are fixed and unique to a specific region such as
access to the sea or being located at the border. Hanson (1996) supports that static
locational advantages lower transport costs; therefore, borders and ports are natural sites to
locate production and natural centers for international trade. Sassen (2001) also argues that
globalization has produced a worldwide urban hierarchy system, which is a complex
network of production. Consequently, its hierarchy of cities responds to international
system of urban hierarchy rather than a national urban system. This implies that in regions
or cities, where international trade plays a key role such as border region; the urban
hierarchy of these cities responds to external factors than internal ones.
2.11 Concept of Border Industrialization/ Export Manufacturing Sector or Border
Economic Zone and Its Applications
1) Origins, Characteristics and Progresses
The Border Industrialization Program commonly known as Maquiladora program/ Export
Manufacturing and Assembly Sector or Border Economic Zone (BEZ) has primarily been
developed in Mexico since 1965 (Pipkin and Samstad, 2005). Brouthers et al. (1999)
summarized the origins of the Maquiladora, which were mostly located in the northwestern
frontier known as the “Zona Libre” or free zone. It consisted of the state of Baja, California
and certain cities in Sonora that functioned as free ports. In these regions, official Mexican
import substitution policies (high tariffs, import permits and restrictions on foreign
investment) were not followed in the Zona Libre because the Mexican government found it
is very difficult to enforce them in the regions along the westernmost U.S./Mexico border.
As a result, U.S. trade and investment in the free zone was primarily unrestricted. This

19
facilitated U.S. and Mexican entrepreneurs to develop their business with modest regard
for border between the two countries. The primary businesses in the Zona Libre, which
manufactured in Mexico using inputs from the U.S. (without formal recognition from
either the U.S. or Mexican governments), set the stage for the more formalized Maquila
factories that succeeded.
Apart from the favorable conditions generated by the concept of Zona Libre, they further
elaborated that unemployment in Mexico along its border with the U.S. became a concern
for the Mexican government when the U.S. ended the Bracero program in 1964. The
Bracero program had allowed Mexican workers to enter the United States temporarily,
work on U.S. farms, and return to Mexico at the end of season. To promote employment at
the border cities, the Mexican Government therefore formulated the plan to increase border
industrialization by establishment of manufacturing within free zones in the northern
border cities, as well as promoting technology transfer to domestic industry (Brannon et
al., 1994).
In relation to the Customs duty, all raw materials, parts and machinery are imported into
Mexico on a temporary duty free basis for up to 18 months. For machinery, this can be
extended indefinitely, for raw materials and parts they must leave the country as finished
goods on a first in first out basis over the 18 month period. If a Maquiladora desires to
import NAFTA goods into the country on a permanent basis, it may do so without duty but
the company will have to pay the Mexican VAT rate of 10% on the value of the goods
(Wikipedia, 2009). The major industries in the Maquiladoras were apparel, electronics and
electrical equipment and automobile sectors (Brannon et al., 1994 and Sargent and
Matthews, 2003). According to Brouthers et al. (1999), Maquiladora manufacturing has
expanded in four distinct stages, namely entrepreneurial expansion, regional expansion,
multinational expansion and NAFTA expansion. Each stage characterized by increasing
competiveness. They remarked that NAFTA provisions also benefited Maquila
manufacturing, creating additional demand for Maquila plants from firms committed to the
North American market.
2) Recent Discourses on Development Contribution of Maquiladoras/ Border
Economic Zones or Export Manufacturing Sector
After implemented the Maquiladoras for over four decades, there have been criticized on
its development contribution either advantages or disadvantages. Relevant researches
commented on both economic and employment advantages. Nevertheless, there existed
some disadvantages comprising of social, environmental, ethical and equitable
development issues. Please see relevant discourse on development contribution of
Maquiladoras in Table 2.4.
Table 2.4 Development Contribution of Maquiladoras/Export Manufacturing Sector
or Border Economic Zones
Advantages Disadvantages Sources
1. Impressive economic
performance during 1980s and
1990s. The early 1993 more than
2,000 plants were established,
mostly foreign owned employed
over 500,000 workers.
1. It has not yet gone beyond the stage of being,
primarily enclave of foreign interests through
the virtually complete industry reliance on
imported materials or less than 2% of Mexican
content. Although the location on Mexican
territory of an economic activity employs
workers and generates value added exports, the
contribution to Mexican economic growth and
Brannon et al., 1994 and
Carrillo-Huerta and Urquidi,
1989 cited in Brannon et al.,
1994

20
Advantages Disadvantages Sources
development falls short of it potential as it is not
integrated into the rest of the regional economy
or the national economy.
2. The establishment of
Maquiladoras and subsequent
growth represent a major change in
Mexico‟s import substitution and
foreign investment policies. And
Maquilas were in a very
competitive position because the
laws were well-established and
working smoothly by the time
NAFTA went into effect in January
1994.
2. There have been reports of human right abuse
for the low-wage Maquila workers. Some jobs
and plant displacements from U.S. to Mexican
maquiladoras.
Brouthers et al., 1999
3. The Maquila is key economic
driver and attractor of workforce.
Further, the maquiladora industry
on the Mexican side contributed to
the enhanced proportion of service
workers and reduced agricultural
workers than for the rest of the
nation.
3. Dichotomies exist on both side in
manufacturing and agriculture. Maquiladora did
not provide Mexico with capital goods for its
domestic market, instead sold goods almost
exclusively into the U.S. market. Maquildora
industrialization and rapid population growth
led to environmental impacts on native
vegetation, changes to natural river flows and
lakes.
3.1 The transformation of the border region
altered the urban order.
3.2 The border in many respects regard as
different “country” so called “ Amexica”.
3.3 A region with population growth
constrained by natural resources will limit
border industrialization.
3.4 Lack of planning on the Mexican side and to
a lesser extent on the U.S. side.
3.5. Large reaches of rural and sometimes
physically harsh areas are often ignored by
planners of both nations.
Pick et al., 2001
4. A source of much needed
employment growth and foreign
exchange earnings throughout the
1980s and 1990s.
4. Often been condemned as dependent on low
wages, substandard working conditions, weak or
nonexistent unionization and negligent
environmental standards.
Samstad and Pipkin, 2005
5. By the late twentieth century, the
industry accounted for
approximately 25 percent of
Mexico‟s gross domestic product,
and 17 percent of total Mexican
employment.
5.1 Maquiladoras, in general are
best represented among operations
that are particularly assembly
intensive.
5.2 In 2002, despite the decline,
there still exists over 3,000
maquiladoras along the 2,000 mile-
long United States–Mexico border,
providing employment for
approximately one million
workers, and importing more than
$51 billion in supplies into Mexico.
5. As majority of workers are women, the
maquila industry has been accused of the sexual
exploitation of women, forced overtime, and
illegal working conditions for child labor.
5.1 Profits generated from maquiladoras are
typically sent back to the United States, or other
investor-based countries. Therefore,
maquiladoras do not promote direct economic
development within Mexico.
5.2 Maquiladoras in Mexico have been on the
decline since 2000 due to the competition and
introduction of low-cost offshore assembly like
Taiwan, China, and countries in Central
America.
5.3 Environmental degradation is mainly from
intense industrialization. Environmental hazards
associated with some maquiladoras include
polluted rivers and contaminated drinking
water.
Wikipedia, 2009,
retrieved from
http://en.wikipedia.org/wiki/
Maquiladora, retrieved on
April 7, 2009

21
3) Applications of Border Economic Zone Concept in Asia
In Asian region, this concept is proliferating during recent decades. Such zones have been
implemented i.e. between Guangdong province of China and Hong Kong; between
Indonesia and Singapore; between Johor Bahru state of Malaysia and Singapore and
between North Korea and South Korea. Other existing BEZs along the GMS corridors are
between China and Myanmar; between China and Vietnam; between Vietnam and
Cambodia and between Vietnam and Lao PDR. A few BEZs are under planning and
evolution process i.e. between North Korea and China; between China and Russia and
between India and Pakistan. The current key border economic zones in Asian regions are
shown in Table 2.5 below.
Table 2.5 Current Development of Border Economic Zones in Asia
Name of Border
Economic Zones
Bordering
Countries
Year of
Establis
hment
Emplo
yment
Area Type of trade and
industries promoted
1. Savan Seno Special
Economic Zone in
Savannakhet province
Lao PDR and
Thailand
2003 NA NA Export processing zone,
free trade zone, free
service and logistic center
2.Myawaddy Special Border
Economic Zone in Kayin state
Myanmar and
Thailand
2008 NA 173
hectares
NA
3.Iskandar Malaysia
in Johor state
Malaysia and
Singapore
2006 NA 221,634.10
hectares
(2,216.3
Km2
An economic, industrial
and services cluster
4.Xa Mat Economic Border
Gate in Tay Ninh province
Vietnam and
Cambodia
2003 NA 34,197
hectares
Wood processing, office
products, handicrafts,
manufacture of electronic
components, electrical
appliances, household
goods and garments
5. Moc Bai Border Economic
Zone in Tay Ninh province
Vietnam and
Cambodia
2005 NA 21,283
Hectares
NA
6.Lao Bao Special
Commercial and Economic
Zone in Quang Tri Province
Vietnam and
Lao PDR
2005 NA NA NA
7.Ruili Border Economic
Cooperation Zone in Yunnan
province
China and
Myanmar
1992 NA NA Import and export trade
includes the processing
industry, local agriculture
and biological resources
8. Wanding Border Economic
province
China and
Myanmar
1992 NA 6 Km2
. Development in trading,
processing, agriculture
resources and tourism
9. Hekou Border Economic
province
China and
Vietnam
1993 NA NA Main export products
include clothing, cotton
yarn, ceresin wax,
mechanical equipment,
batteries, fruits, rice seeds
and tobacco
10.Kaesong Industrial
Complex
North Korea
and South
Korea
2003 By
2012,
created
725,00
0 jobs
By 2012,
covered 25
Sq. mile
Low-end and labor
intensive industry such as
shoes, cloths and watches
Sources:
1.http://www.invest.laopdr.org/special%20zone.htm, retrieved on 7 April, 2009
2.http://www.takchamber.com/index.php?lay=show&ac=article&Id=343288&Ntype=1, retrieved on 7 April,
2009
3. http://en.wikipedia.org/wiki/Iskandar_Malaysia, retrieved on 7 April, 2009
4. http://en.xamat.info.vn/, retrieved on 7 April, 2009

22
5. http://www.izproperty.com/index.php?option=com_hotproperty&task=view&id=189&Itemid=55,
retrieved on 7 April, 2009
6. http://www.laobaotrade.gov.vn/lawcontent_en.asp?vb_id=11, retrieved on 7 April, 2009
7. http://en.wikipedia.org/wiki/Ruili_Border_Economic_Cooperation_Zone, retrieved on 7 April, 2009
8.http://en.wikipedia.org/wiki/Hekou_Border_Economic_Cooperation_Zone, retrieved on 7 April, 2009
9.http://en.wikipedia.org/wiki/Hekou_Border_Economic_Cooperation_Zone, retrieved on 7 April, 2009
10.Yoon, 2007 and www.wikipedia.com, retrieved on 7 April, 2009.
4) Proposed Development of Special Border Economic Zones in Thailand
In 2004, Thailand designated Maesod district of Tak province as a pilot BEZ. However,
the implementation of this plan got delayed due to lack of understanding on BEZ among
the stakeholders. However, there is current effort to revive translating BEZ into real
practice. As a result, Thailand is under planning process to formulating comprehensive
strategies for development of border economic zones in 5 cross-border regions consisting
of 1) Northern region comprising Maesai, Chiangsaen and Chiang Khong districts of
Chiangrai province and Maesod district of Tak province; 2) Northeastern region consisting
of Mukdahan, Nakhon Phanom and Nongkhai provinces; 3) Eastern region comprising of
Sakaeo and Trad provinces; 4) Western region representing Kanchanaburi province and 5)
Southern region consisting of Sadao district in Songkhla province and Narathiwat province
(Manager Online, 2014).
2.12 Consolidated Implications for Adopting Development of Border Economic Zone
Concept
The consolidated implications for adopting development of border economic zones
particularly based on the United States and Mexico practical experiences can be
categorized into 4 levels as follows:
1) at the Bilateral Level
Border economic zones can foster cross-border production, trade and investment linkages.
NAFTA drives demands for different goods, as well as attracting operations of border
industrialization for supplying North America market. However, some jobs and plant
displacements from U.S. to Mexican maquiladoras have been reported.
2) at the National Level
The Maquila is key economic driver and attractor of workforce and foreign exchange
earnings of Mexico throughout the 1980s and 1990s.The establishment of Maquiladoras,
which are mainly assembly intensive production and subsequent growth, represent a major
change in Mexico‟s import substitution and foreign investment policies. Further, the
maquiladora industry on the Mexican side contributed to the enhanced proportion of
service workers and reduced agricultural workers than for the rest of the nation. The early
1993 more than 2,000 plants were established, mostly foreign owned employed over
500,000 workers. By the late twentieth century, the industry accounted for approximately
25 percent of Mexico‟s gross domestic product, and 17 percent of total Mexican
employment. In 2002, despite the decline due to the competition and introduction of low-
cost offshore assembly such as Taiwan, China, and countries in Central America, there still
exists over 3,000 maquiladoras along the 2,000 mile-long United States–Mexico border,
providing employment for approximately one million workers, and importing more than
$51 billion in supplies into Mexico. Nevertheless, Maquiladora did not provide Mexico
with capital goods for its domestic market, instead sold goods almost exclusively into the
U.S. market. And profits generated from maquiladoras are typically sent back to the United
States, or other investor-based countries. Therefore, maquiladoras do not promote direct
economic development within Mexico.

23
3) at the Regional Level
Although the location on Mexican territory of an economic activity employs workers and
generates value added exports, the contribution to Mexican economic growth and
development falls short of it potential as it is not integrated into the rest of the regional
economy or the national economy. Also, it has not yet gone beyond the stage of being,
primarily enclave of foreign interests through the virtually complete industry reliance on
imported materials or less than 2% of Mexican content. Dichotomies exist on both side in
manufacturing and agriculture. The transformation of the border region altered the urban
order in Mexico. The border in many respects regard as different “country” so called “
Amexica”. A region with population growth constrained by natural resources will limit
border industrialization. And there is a lack of planning on the Mexican side and to a lesser
extent on the U.S. side.
4) at the Local Level
It is a key source of local economic driver and employment. But, it is often condemned as
dependent on low wages, substandard working conditions, weak or nonexistent
unionization. Maquildora industrialization and rapid population growth led to
environmental impacts on native vegetation, changes to natural river flows and lakes.
Large reaches of rural and sometimes physically harsh areas are often spatially excluded
by planners of both nations. As majority of workers are women, the Maquila industry has
been accused of the sexual exploitation of women, forced overtime, and illegal working
conditions for child labor.

25
Chapter 3
Research Methodology
In order to carry out the preceding research objectives, the research design has consistently
been undertaken following essential research methodology elements. The detailed research
design and procedures are as follows:
3.1 Type of Research
This comparative study is a combination of descriptive and explanatory research with
distinct justifications as follows:
 Descriptive research in the sense that it presents a picture of the specific
details of economic and social settings of the study cross-border regions between Thailand
and neighboring countries including Cambodia, Lao PDR and Myanmar, as well as
highlighting cross-border interactions.
 Explanatory research in the sense that it explains cross-border linkages in order to
rationalize on why it happens in that way, as well as proposing prospective integrated
development strategies of joint cross-border economic zones.
3.2 Type of Research Design
It is primarily a quantitative research through survey design utilizing various types of
questionnaires. Additionally, the research is also supplemented with qualitative research
design employing multiple methods namely reconnaissance survey, key informant
interview, non-participant observation and focus group discussion of border community
leaders.
3.3 Unit of Analysis
There are multi-unit of analysis covering household, individual business unit or company,
industrial plant, border city, national and bilateral levels. These are derived from the above
mentioned objectives. Please find a detailed research coordination schema in Appendix A.
3.4 Selection of Study Areas and Criteria
The selection of study areas mainly apply purposive sampling based on the specific
criteria, in which it should be the most strategic cross-border regions linking Thailand with
neighboring countries consisting of Cambodia, Lao PDR and Myanmar. The study areas
possess highest development potentials towards special border economic zones inducing
by strong intensity of cross-border trade flow, people and vehicle mobility and local border
industrial development. The study areas likewise are located along the GMS economic
corridors, as well as overlapping with Asian and ASEAN Highways routes. As a result, the
study areas, which are corresponded with the above mentioned criteria, are as follows:
 Cross-Border Region 1: Aranyaprathet district in Sakaeo province links with
O‟Chrov district in Banteay Meanchey province of Cambodia;
 Cross-Border Region 2:Maesod district in Tak province connects with Myawaddy
district in Kayin state of Myanmar; and
 Cross-Border Region 3: Muang Mukdahan district in Mukdahan province links
with Kaysone Phomvihane district in Savannakhet province of Lao PDR.
The locations of these cross-border regions appear in Figure 1.1.
3.5 Sampling Design and Procedures
The research adopts Stratified Random Sampling. Sampling design is divided into 6 major
groups. These are cross-border traders, border wholesalers and retailers, industrial
developers, cross-border shoppers and border households. The research is applied
Stratified Random Sampling using a Simplified Formula developed by Yamane (1967) to
calculate sample size as follows:

26
2
)(1 eN
N
n


Where n is the sampling size, N is the population size, and e is the level of precision.
The research adopts 5 % of level of precision. If there is large number of population, the
research strictly follows the equation. And if the total number of population is less than 30,
the research then shall take all population to represent as sampling size. Also, if the total
number of population is unknown, the research shall take the minimum of 30 samples.
Therefore, the total numbers of all types of field questionnaires are 1,692 samples. The
specific sampling designs for each group are as follows:
1) Border traders They are divided into three categories of respondents, which
comprise a total of 578 sampling sizes as follows:
 Cross-border traders consist of either registered companies or registered merchants
who regularly conduct either cross-border trade with neighboring countries or transit trade
to nearby countries on a commercially large scale basis.
 Local border wholesalers represent those registered merchant shops, which are
mainly operated on wholesaling basis.
 Local order retailers entail either formal retailers who are registered and
permanently located their retail shops in the border cities or informal retailers regardless of
nationality, who are unregistered and temporarily cross-border for trading.
Table 3.1 Number of all types of border traders and numbers of sample size in 2009
Cross-Border Region Number of population Number of sample size
Border
retailers
Border
wholesalers
Cross-
border
traders
Border
retailers
Border
wholesalers
Cross-
border
traders
Thailand
Aranyaprathet district in
Sakaeo province
Cambodia
O‟Chrov District of
Banteay Meanchey
province
NA
NA
NA
15
37
(in
operation
22)
15
48
31
30
15
22
15
Thailand
Muang Mukdahan
district in Mukdahan
province
Lao PDR
Kaysone Phomvihane
district in Savannakhet
province
465
NA
NA
NA
75
56
57
30
30
30
30
30
Thailand
Maesod district in Tak
province
Myanmar
Myawaddy district in
Kayin state
NA
NA
59
NA
100
NA
30
30
33
30
54
30
Total 465 74 283 226 171 181
Source: Number of cross-border traders gained from border customs authorities in Thailand,
Cambodia and Lao PDR in 2009.
Number of border retailers and wholesalers obtained from field surveys.
Note: NA stands for no exact data are available.

27
2) Cross-border shoppers The study applies random sampling of cross-border
shoppers at the cross-border regions. There are a total of 332 samples across the cross-
border regions, which are presented in Table 3.2.
Table 3.2 Numbers of sample size of cross-border shoppers in 2009
Cross-Border Region Number of sample size
Thailand
Aranyaprathet district in Sakaeo province
Cambodia
O‟Chrov District of Banteay Meanchey province
30
30
Thailand
Muang district in Mukdahan province
Lao PDR
Kaysone Phomvihane district in Savannakhet
province
106
106
Thailand
Maesod district in Tak province
Myanmar
Myawaddy district in Kayin state
30
30
Total 332
Source: Field surveys.
3) Local border industrial developers
Department of Industrial Works of Thailand (2009) classifies major industries into 21
categories as follows:
(1) Basic agro-industry
(2) Food
(3) Beverage
(4)Textile
(5) Wearing Apparel
(6) Leather products & Footwear
(7) Wood & Wood products
(8) Furniture & Fixture
(9) Paper & Paper products
(10) Printing, Publishing, Allied products
(11) Chemical & Chemical products
(12) Petroleum products
(13) Rubber products
(14) Plastic products
(15) Non-metal products
(16) Basic metal products
(17) Fabricated products
(18) Machinery
(19) Electrical Machinery and Supplies
(20) Transport Equipment
(21) Other Manufacturing Industries
The specific types of industrial plants operated in the cross-border regions between
Thailand and Myanmar, Cambodia, and Lao PDR are identified in accordance with the
above classifications of industries. There are a total of 253 samples, which appear in Table
3.3.

28
Table 3.3 Industrial developers in the study areas and numbers of sample size in 2009
Cross-Border
Region
Number
of
Factory
Capital
Investment
(Million
Baht)
Labor Force
(Person)
Total
Labor
Force
(Person)
Number of
Sample
Size
(Number
of Factory)
Male Female
Thailand
Aranyaprathet
district in Sakaeo
province
Cambodia
O‟Chrov District
of Banteay
Meanchey
province
40
(in
operation
20
factories)
NA
456.30
NA
293
NA
611
NA
904
NA
20
30
Thailand
Muang district in
Mukdahan
province
Lao PDR
Kaysone
Phomvihane
district in
Savannakhet
province
227
412
2,872
NA
1,803
NA
600
NA
2,403
NA
43
61
Thailand
Maesod district
in Tak province
Myanmar
Myawaddy
district in Kayin
state
251
NA
2,055.99
NA
9,704
NA
25,298
NA
35,002
NA
69
30
Total 910 5,384.29 11,800 26,509 38,309 253
Source: Provincial Industrial Development Offices in the border cities in Thailand and Lao PDR in
2009.
Note: NA stands for no exact data are available.
4) Local border households The study conducts survey questionnaires by interviewing
head of local border households. A total of 529 samplings across the cross-border regions
are conducted. The sampling size in a particular cross-border region is shown in Table 3.4.

29
Table 3.4 Numbers of sample size for border households in 2009
Cross-Border Region Number of
population
(Person)
Number of
household
Number of
sample size
(Household)
Thailand
Aranyaprathet district in Sakaeo
province
Cambodia
O‟Chrov District of Banteay
Meanchey province
87,018
129,315
33,554
25,950
58
103
Thailand
Muang Mukdahan district in
Mukdahan province
Lao PDR
Kaysone Phomvihane district in
Savannakhet province
128,886
117,821
41,516
19,018
101
159
Thailand
Maesod district in Tak province
Myanmar
Myawaddy district in Kayin
state
119,471
53,000
44,977
10,150
78
30
Total 635,511 175,165 529
Source: Numbers of population and numbers of household gathered from district offices in the
study border cities of Thailand, Cambodia, Lao PDR and Myanmar.
Note: Normal sample sizes are based on sampling calculation. But sample sizes in both O‟Chrov
district in Cambodia and Kaysone Phomvihane district in Lao PDR are collected above minimum
statistical sampling requirements due to convenient arrangements during field surveys.
3.6 Target Informants The target informants consist of various sources as follows:
 Cross-border traders, border wholesalers and border retailers;
 Industrial developers;
 Customs and provincial trade officials;
 Cross-border shoppers;
 Cross-border transportation service providers;
 Members of provincial and local chambers of commerce;
 Members of provincial industry federation;
 Heads of village and Tambon (sub-district);
 Tambon (Sub-District) Administration Organizations representatives;
 Provincial and district administration officers; and
 Central government informants involving with cross-border trade promotion,
industrial development, infrastructure, transportation and services along border
areas.
3.7 Data Sources The data are derived from both secondary and primary sources as
follows:
3.7.1 Secondary Data Sources Data related to relevant theoretical supports are
collected from books and journal articles. In Thailand, data are gathered from various
government organizations e.g. Department of Customs, provincial offices, National
Statistical Offices, Office of the Board of Investment, Bank of Thailand, Office of the
National Economic and Social Development Board (NESDB), line ministry agencies,
provincial commercial offices, industry and transport offices, provincial and national

30
chamber of commences and relevant internet websites. They are also collected from
similar organizations in Myanmar, Cambodia and Lao PDR. Such required data across the
cross-border regions consist of profiles of the study locations, statistics of cross-border
trade and tourism flows between Thailand and Myanmar, Cambodia and Lao PDR,
existing urban development, statistics on industrial and commercial registrations, joint
venture company registrations, cross border outsourcing activities, current value chain
management and statistics on border infrastructure, logistics and services.
3.7.2 Primary Data Sources Primary data are gathered from various sources as
follows:
 Questionnaires covering demographic, economic and social aspects of cross-border
traders, border wholesalers and retailers in the cross-border regions are conducted.
Please find detailed questionnaires in Appendix B, C and D.
 Questionnaires of cross-border shoppers appear in Appendix E.
 Local border industrial developer questionnaires appear in Appendix F.
 Local border household questionnaires show in Appendix G.
 Checklist for focus group discussion with community leaders on perceptions of
development dynamics of border cities towards promoting as border economic
zones appears in Appendix H.
 Checklist for key informant interview of border provincial governors appears in
Appendix I.
 Checklist for key informant interview of border provincial chamber of commerce,
industrial federation and cross-border logistics service providers appears in
Appendix J.
3.8 Data Collection Methods The data collection methods are employed as follows:
3.8.1 Primary Data Collection Methods It is linked with 3.7.2.Where secondary data are
unavailable, at least 5 methods are subsequently applied. These are:
1) Reconnaissance survey It is undertaken in July 2009 in order to get orientation to the
study areas and to be familiar with local border people in the study areas. It is also helpful
to search for records or statistics relevant for research, as well as helping identify necessary
resources and contacts needed in carrying out the research.
2) Questionnaire survey It is conducted in August 2009 to February 2012 by questioning
6 target groups of informants comprising cross-border traders, border wholesalers and
retailers, cross-border shoppers, border industrial developers and border households.
3) Non-Participant Observation It is performed both during reconnaissance surveys and
while conducting field questionnaire surveys. This can help gaining insights on
characteristics of study areas, socio-economic and cultural interactions, problems of cross-
border trade, infrastructure development and services, urban development patterns, urban
environmental problems, community‟s life styles, people and vehicle mobility at the cross-
border regions between Thailand and Cambodia, Lao PDR and Myanmar.
4) Key Informant Interview/Checklist This is carried out through interview with major
stakeholders including local and provincial administration, customs and trade officials,
border and provincial industrial developers and local border community-based enterprises,
local border NGOs in the cross-border regions, etc.

31
5) Focus Group Discussion This is held to collect data from community leaders on
communities‟ perception and impacts resulting from changing border economic and social
conditions e.g. employment of illegal immigrant labor from neighboring countries, likely
formation of community-based enterprises and linkages with local industries as well as
impact of government‟s policies on cross-border contract farming, etc.
3.8.2 Secondary Data Collection Methods It is linked with 3.7.1 by conducting
through literature review from various sources e.g. journal articles, internet websites,
books, government and private sectors reports and relevant statistics of government
organizations, etc.
3.9 Selected Data Analyses and Techniques
The study uses both qualitative and quantitative analyses and techniques as follows:
3.9.1 Quantitative analysis This consists of:
 Locational and trend analyses focusing on flows of cross-border trade of goods,
vehicle and people‟s mobility and cross-border contract farming.
 Descriptive statistics e.g. frequency, percentage, mean and standard deviation.
3.9.2 Qualitative Analysis This applies literature review, content and policy
analyses, as well as comparative cross-border and SWOT analyses.
Results of the above mentioned analyses are presented in the form of graphs, tables and
charts.

Border Economic Zones and Development Dynamics in Thailand: A Comparative Study of Bordering Countries (Cambodia, Lao PDR and Myanmar)

Border Economic Zones and Development Dynamics in Thailand: A Comparative Study of Bordering Countries (Cambodia, Lao PDR and Myanmar)

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