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Cablegate: Regional Business Conference On Logistics Brings Together

VZCZCXRO7123
PP RUEHCN RUEHDT RUEHGH RUEHHM RUEHVC
DE RUEHCHI #0052/01 0880940
ZNR UUUUU ZZH
P 280940Z MAR 08
FM AMCONSUL CHIANG MAI
TO RUEHC/SECSTATE WASHDC PRIORITY 0719
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHINGTON DC PRIORITY 0003
RUEHKO/AMEMBASSY TOKYO PRIORITY 0041
RUEHCHI/AMCONSUL CHIANG MAI 0775

UNCLAS SECTION 01 OF 03 CHIANG MAI 000052

SIPDIS

SIPDIS

EEB/CBA (DENNIS WINSTEAD)
EEB/EX
STATE PASS USTR AND USTDA

E.O. 12958: N/A
TAGS: ECON ELTN ECIN ETRD EWWT PREL TH BM CH LA CB
MY
SUBJECT: REGIONAL BUSINESS CONFERENCE ON LOGISTICS BRINGS TOGETHER
U.S. AND MEKONG REGION BUSINESSES

CHIANG MAI 00000052 001.2 OF 003


-------
Summary
-------

1. In an effort to promote development in the Greater Mekong
Subregion (GMS) logistics and transportation sectors and to
underscore U.S. interest in deepening investment in the region,
post hosted a conference on March 18-19 bringing together public
and private sector representatives from across the GMS.
Speakers reported on current trends in logistics development in
the Asian Development Bank's GMS project and discussed the
challenges ahead. The participation of several U.S. firms
highlighted our interest in economic development in the GMS and
provided an opportunity for those companies to promote
themselves to a regional audience. End summary.

2. The Asian Development Bank's GMS program is an infrastructure
development project that seeks to expand trade through a network
of highways. Northern Thailand is situated at the crossroads of
the two main routes, the North-South and East-West corridors.
As a result, the northern provinces of Thailand have the unique
potential to develop into a logistics and transportation hub for
regional trade.

3. To help explore these concepts, ConGen organized a regional
business conference on "Logistics Development in the Greater
Mekong Subregion: Managing Trade and Expanding Markets" on March
18-19. The event helped highlight the 175th anniversary of
U.S.-Thai diplomatic relations, which was celebrated the same
week. The conference was made possible thanks to financial
support from the Business Facilitation Incentive Fund (BFIF) and
the United Parcel Service (UPS), as well as assistance from
Embassies Bangkok, Phnom Penh, Vientiane and Consulates General
Chengdu and Guangzhou. With speakers and participants from
China, Cambodia, Laos, Thailand, and the United States, the
conference was an opportunity for regionally-based firms in the
logistics, transportation, and supply chain sectors not only to
learn about current trends in the Asian Development Bank-backed
Greater Mekong Subregion project, but also to network with one
another with the goal of developing a sophisticated, domestic
logistics sector. The presence of American companies, such as
co-sponsor UPS, helped to highlight how U.S. business can also
play an active role in the development of this region.

--------------------------------------------- -----
Ambassador, Transportation PermSec Open Conference
--------------------------------------------- -----

4. Ambassador Eric John opened the conference with a speech
citing the strong trade and investment relationship between the
U.S. and Thailand and calling for stronger links in logistics
and transportation. He also acknowledged the growing economic
presence of China in Asia and quoted Assistant Secretary
Christopher Hill saying that "more China doesn't mean less of
the U.S." in Southeast Asia. The Ambassador noted that
transportation costs in Thailand are well above the average for
countries in the region, a reminder that Thailand has the
potential to make its trading network more cost-effective and
efficient.

5. Ministry of Transportation Permanent Secretary Chaisawasdi
Kittipornpaiboon emphasized the importance of implementing an
efficient highway management system and international supply
chain through Thailand. He predicted that Chiang Mai and Chiang
Rai will be the provinces which benefit the greatest from the
GMS project and the new Mekong river port at Chiang Saen
expected to be completed by 2011. The Permanent Secretary
argued that Chiang Mai and Chiang Rai should be at the forefront
of trade and tourism growth in the GMS. While the Permanent
Secretary praised the development of the GMS infrastructure, he

SIPDIS
acknowledged that Thailand is still struggling with utilization
of the roads and bridges. He cited that although it takes only
three years to construct a new road or bridge, it takes at least
six more years to implement using the infrastructure.

--------------------------------------
Regional Speakers Gather in Chiang Mai
--------------------------------------

6. BFIF support brought together over 20 speakers and panel
moderators from the GMS to discuss and debate current trends in
logistics development. Asian Development Bank Thailand Country
Director Jean-Pierre Verbiest provided participants with an
overview of logistics development from the perspective of the

CHIANG MAI 00000052 002.2 OF 003


GMS project's funding source, the ADB. Presentations from the
Thai and Chinese governments on logistics trends in those
countries complemented the ADB's presentation. Representatives
of the Federation of Thai Industries (FTI) and UTI, an American
logistics firm operating in Thailand, reported on how they
applied lessons learned from management of trade across the
Thai-Malaysian border.

7. The conference also hosted three panel sessions. The first
panel on "Transportation and Customs" included speakers from the
Thai Ministry of Transportation, the Cambodian Ministry of
Public Works and Transportation, TNT Express Worldwide, and UPS.
Panelists' presentations showed the contrast between the public
sector's focus on infrastructure development and the private
sector's demand for a streamlining and sophistication of
regulations, logistics, and customs. A second panel led by
American Chamber of Commerce member firms UPS, TNT Express, and
UTI highlighted international best practices in logistics and
supply chain management and provided an opportunity for American
firms to promote themselves to local producers and business
leaders. A third panel on the "Expanding GMS Market"
underscored the economic potential in some of the peripheral
markets of the region, including Cambodia, upper northern
Thailand, and Guangxi province in China.

---------------------------
Participants Take the Stage
---------------------------

8. Over 170 participants and observers from Thailand, Laos,
Cambodia, and China joined this conference, which was hosted at
the Shangri-La Hotel Chiang Mai. Of these, the majority were
local Thai businesses including manufacturing firms, logistics
companies, and freight forwarders. Other participants included
representatives of academic institutions, non-profit
organizations, and members of the RTG, including the Bank of
Thailand. During the UPS-sponsored lunch and reception,
participants had the opportunity to network with one another and
establish links both regionally and across these various sectors.

9. During the second day of the conference, participants shared
their own perspectives on logistics and GMS-related
developments. The approximately 100 participants who joined on
March 19 separated into four workshops on human resource
development, supply chain management, building a business
network, and tourism and services. Each workshop, under the
moderation of a local business leader or academic, led
participants through case studies and discussion questions on
the group's respective topic. Each group was asked to compile
tasks that businesses, governments, or other interested parties
could pursue in the months following the conference. Each
moderator shared their workshops' tasks with the full plenary
before the conference's closing. (See para. 10 for workshop's
recommendations.)

-------------
Looking Ahead
-------------

10. The four workshops concluded with each moderator briefing
the full plenary with suggested tasks for the future. All four
groups supported the idea of building a GMS center in northern
Thailand to serve as a training center, logistics hub, and
convention hall for trade shows. The workshops agreed that a
lack of information and sense of community among all parties in
the GMS is an obstacle that a major hub could help overcome.
The Supply Chain Management workshop also raised concerns about
impacts of the GMS on farmers, who participants called "the
origin" of the agricultural supply chain. The Tourism and
Services group also pointed out that China's impact on Mekong
River water levels is an obstacle to the development of tourism
along the river.

11. The conference concluded with a speech by Embassy Bangkok
Counselor for Economic Affairs Robert Griffiths who emphasized
that, with speakers from the public and private sectors and
participants from across the GMS and southeast Asia, the
conference was an opportunity to make "new friends and build up
relationships that will be useful in the future."

---------
Reactions
---------


CHIANG MAI 00000052 003.2 OF 003


12. ADB Thailand Country Director Jean-Pierre Verbiest told
EconCouns that of the many Greater Mekong Subregion conferences
he has attended, this one was "the best one I ever attended,"
referencing especially the joining of private and public sector
actors for a lively dialogue. Press coverage by local daily
print and broadcast media also highlighted the significance of
the conference for the region.

13. With about 180 participants at the opening, this two-day
conference maintained over 100 attendees until the closing
session on the second day. About half of the participants
completed and submitted survey forms on the second day, rating
almost every session a score of 3 or better on a scale of 1 to
5, 1 meaning "needs improvement" and 5 meaning "excellent."

14. One participant noted on a survey that the conference
"provided opportunities to the private sector to bring up their
concerns to other parties." Another wrote that the management
of the conference was excellent, especially the multi-national
approach of the panels. All participants expressed the view
that the conference was useful for business planning and
research in some way.

-------
Comment
-------

15. Post greatly appreciates the Department's support of this
conference through the BFIF program. The United Parcel Service
(UPS) also supported the conference with funding for a lunch and
evening reception. Support from BFIF and UPS was essential for
the conference's success. Post would also like to express its
gratitude to the U.S. Commercial Service office of Embassy
Bangkok for its expert guidance during the planning of this
event. In addition, post relied upon Embassies Bangkok, Phnom
Penh, Vientiane and Consulates General Chengdu and Guangzhou for
providing excellent speakers who contributed to the conference's
lively panels and networking sessions. Post greatly appreciates
the support of these neighboring embassies and consulates.

16. In addition to strengthening the network of regional public
and private sector actors interested in the GMS program, the
conference helped forge relationships between the U.S. and these
parties in the region. The conference offered the opportunity
for local governments, businesses, and NGOs to understand that
the U.S. remains active in Southeast Asia, in particular in
economic development. Participation from American firms such as
UPS underscored that the U.S. is interested and enthusiastic
about deepening economic ties with the region. To reemphasize
U.S. interest in Mekong regional development, post plans to
follow up with conference participants in six months to inquire
about the impact of the event on their businesses. End comment.
MORROW

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