Kuala lumpur: The proposed Malaysia-Thailand border economic zone (BEZ) is anticipated to significantly bolster bilateral trade and regional economic growth by improving border infrastructure, which is expected to reduce logistics costs, enhance supply chain efficiency, and attract more investments, according to an economist.
According to BERNAMA News Agency, Prof Emeritus Dr. Barjoyai Bardai from Malaysia University of Science and Technology highlighted that approximately 40 percent of trade between Malaysia and Thailand is facilitated through cross-border cargo transportation, making efficient border infrastructure a critical component for future trade expansion. He emphasized that initiatives like the proposed second Rantau Panjang-Sungai Golok bridge, improved rail connectivity, and enhanced customs procedures should help lower logistics expenses and transit times.
The BEZ initiative is set to build on the robust economic relationship between the two neighboring countries, with bilateral trade reportedly reaching US$27.7 billion in 2025. Prof Barjoyai noted that the countries need only modest growth to achieve the US$30 billion target by 2027, requiring trade to grow by roughly four to five percent annually. Both governments have prioritized this target within their economic cooperation frameworks and have established mechanisms to promote trade and investment.
Prof Barjoyai identified strong growth opportunities in sectors such as tourism, agriculture, halal products, semiconductors, logistics, energy, and the digital economy. He stressed that achieving the target requires swift implementation of announced projects, with logistics and transportation sectors likely to be the biggest beneficiaries.
On July 14, Prime Minister Datuk Seri Anwar Ibrahim stated that the development of the Malaysia-Thailand BEZ would provide Malaysian goods with expanded access to the markets of Laos, Cambodia, and Vietnam. Anwar mentioned that Malaysian exports, especially fisheries and agricultural products, had previously encountered Thai customs restrictions when transiting to those markets, but Bangkok has agreed to ease these requirements. This relaxation is expected to create more trading opportunities for Malaysia's fisheries and agricultural sectors.
Meanwhile, Universiti Utara Malaysia senior lecturer Muhammad Ridhuan Bos Abdullah noted that Thailand has long considered border economic zones vital for economic growth, highlighting the importance of closer economic integration between the two countries. He pointed out that food and beverage products constitute the largest volume of cross-border trade, followed by electrical and electronics products. Trade through border crossings like Bukit Kayu Hitam, Padang Besar, and Durian Burung significantly contributes to bilateral commerce, especially for the northern states of Perlis, Kedah, Perak, and Kelantan.
However, Abdullah emphasized that security remains a key concern, particularly in several districts in southern Thailand still under security measures. He also stressed the necessity for both governments to reach mutual agreements on issues such as investment incentives, labor mobility, and the movement of goods and services. Incentives should be tailored to the strengths of each border location, rather than adopting a one-size-fits-all approach, he added.