Good-Neighbour policy

Little-known government agency Neda is helping Thailand by helping poorer regional countries

Sept 19, 2011
Bangkok Post

The name of Neda (Neighbouring Countries Economic Development Cooperation Agency) may not ring a bell, and most of us would probably confuse it with Nida (National Institute of Development Administration).

Neda president Acksiri Buranasiri joins residents of Muang Ngeun at the inauguration of the Thaifinanced road.

But Neda was established in 2005 with the aim of helping neighbouring countries in terms of trade, investment, land, sea and air transport networks, tourism and human resource development.

A public agency under the Finance Ministry, Neda, formerly the NEDF (Neighbouring Countries Economic Development Fund), has from the start granted financial assistance, soft loans and technical support worth 9.42 billion baht to 23 projects, mainly for infrastructure development in neighbouring countries.

Fourteen percent of the total has been financial aid, largely to Laos.

Major projects include the now-completed Chiang Rai-Kunming via Lao PDR Road Improvement Project (Highway 3), the Wattay International Airport Improvement Project in Laos, the Pakse Airport Improvement Project in Laos, a railroad construction project from northeastern Thailand's Nong Khai province to Ban Thanaleng near Vientiane, drainage pipeline construction and Asian Highway improvement projects in Vientiane, the Huay Kon-Muang Ngeun-Pak Beng Road Improvement Project.

Neda also provided a 1.3-billion-baht soft loan to Cambodia to improve a 131-kilometre section of Highway 67 connecting Si Sa Ket's Chong Sa-ngam border checkpoint with Cambodia's Siem Reap province, home to the popular tourist destinations of Angkor Wat and Angkor Thom.

Neda had agreed to provide a one-billion-baht soft loan to Cambodia for the route from Surin's Chong Jom border checkpoint to Siem Reap, but the deal fell through amid increased tensions between the two countries, so financing fell to the Chinese government instead.

"Our focus is all on basic infrastructure, mainly for road, water and electricity improvements that will help produce mutual benefits, be it for border trade, investment and tourism," said president Acksiri Buranasiri. "Our ultimate goal is to create an economic corridor, as well as a transport corridor, for Thailand and its neighbours."

Mr Acksiri insists Neda projects will not duplicate the work of other donors such as the Asian Development Bank, the World Bank, the Japan International Cooperation Agency or Chinese or South Korean agencies that generally participate in development projects on a much larger investment scale.

Neda's financial assistance contracts stipulate the recipient countries must hire Thai subcontractors and consultants. For joint ventures, Thai firms must be the principal partners.

"At least half the financial assistance must be used to procure goods and services originating in Thailand," said Mr Acksiri.

He said project completions would help to connect logistics systems across the region, which will help to promote Thailand's economic growth by enhancing the potential of tourism, trade and investment.

This will especially help to improve the competitiveness of Thai entrepreneurs wanting to expand abroad, said Mr Acksiri.

Thailand, the third-largest foreign investor in Laos after Vietnam and China, funded 276 projects worth US$2.68 billion from 2000-10.

Border trade between Thailand and Laos was valued at 87.2 billion baht last year, with Thai exports worth 64.1 billion and imports worth 23.1 billion.

Shipments through Nan's Huay Kon border checkpoint alone totalled 872 million baht _ 549 million baht for Thai exports and 323 million for imports.

"The 52-km Huay Kon-Muang Nguen-Pak Beng Road, which opened officially for traffic in July 2010, will not only help to increase border trade and tourism between the two countries, but also facilitate the transport network between northern Thai provinces, particularly Nan, with the northern provinces of Laos, especially through Muang Nguen of Sainyabuli province and Pak Beng of Oudomxai province. It will serve as a strategic route connecting Thailand and Laos with other countries in the subregion via Highway 2 in Laos to Dien Bien Phu in Vietnam in the future."

Mr Acksiri said Neda is considering 18 development programmes worth a combined 8 billion baht, mostly in Laos.

Plans are also afoot to seek cabinet approval to extend coverage to East Timor, Sri Lanka and Bhutan, where Neda foresees great potential for infrastructure development.

"Given our experiences and growing assets and cash, now estimated at a combined 10.5 billion baht, Neda is building up its credibility so it can raise funds to support its own lending schemes apart from the 500 million baht the government allocates each year," said Mr Acksiri.

"A bond issue, probably backed by the Finance Ministry, is highly likely in the near future."