Due to the lack of facilities at Kan Pike Tee border gate, Kachin State, Myanmar traders are losing out from trade

6 พฤศจิกายน 2560

The government should take steps to raise investor interest in Kachin State. These include designating Kan Pike Tee border gate as an international gate as well as providing basic infrastructure and improving trade conditions at the border between Myanmar and China, local merchants said.

If the government is able meet these requirements, it will set the stage for a more robust tourism sector and raise border trade levels as trading difficulties are overcome at the border gates.

After the Muse 105 Mile Trading Zone which is located at the Northern Shan State border, Kan Pike Tee in Kachin State is one of two border gates which see the most trading activity with China. The other gate is Lweje, which is also in Kachin. 

Kan Pike Tee also shares the border with Tengchong county in China. Currently, the Chinese are carrying out upgrades to the border gate and airport in order to transform Tengchong into an international gate and airport in 2018. 

In fact, the Tengchong government is also preparing to build roads to connect Tengchong to the border gate. However, no such plans have been for Kan Pike Tee on the Myanmar side. As a result, the country could be missing out on potential gains from trade and investments as well as tourism receipts.

Tourism potential

Tengchong is actually a popular tourist destination in China with about 10 million tourists visiting the county yearly. If half of these visitors were to travel to Kachin State, it would boost the State’s tourism services and other related businesses. 

In that connection, the Kachin State Federation of the Chambers of Commerce and Industry has requested for the Kan Pike Tee border gate to be given international status.

“If the gate is upgraded, it will be very beneficial for Kachin State. In fact, many travelers from Tengchong want to come over to Myanmar. But we cannot grant them the relevant visas and passports, only temporary border passes. If some of these rules and regulations are relaxed, more travellers from Tengchong can come into the country via the border gate,” U Paw Oo, chair of Kachin State Federation of Chambers and Industry told The Myanmar Times.

“If we are given international status, tourists from Europe, Japan and other countries visiting China can come to Myanmar through Kan Pike Tee,” he added. 

Kachin has high potential to become a tourism hotspot. It is the only place in Southeast Asia with snow-capped mountains, for one. Other tourist attractions include Hpa-Kant township, Myitsone confluence, the Puta-O mountains,

Hukawang valley and Indawgyi Lake. Transportation connecting these areas is also decent. Meanwhile, the Myitkyina-Mandalay highway connects Kachin to Sagaing region and Bagan in the Mandalay region.

Currently though, tourists are only allowed to visit the town of Waingmaw near Indawgyi Lake with a border pass obtained at the Kachin State border towns. For better access to the other destinations, tourists must have the relevant visas.

According to U Paw Oo, Kachin State has already sought approval for Kan Pike Tee to be awarded international status and for visas to be granted to tourists. “However, we were told it is not possible now. I think it will be possible only after the National Ceasefire Agreement is signed and the country has peace,” he said.

Border trade

Although Kan Pike Tee and Lweje are the main border gates at which trade takes place between Kachin and Tengchong, no storage facilities have been set up to enable Kachin traders to store goods. 

There are no Trading Zones and warehouses near Kan Pike Tee in Kachin. Moreover, as there is no infrastructure and storage to keep the goods, merchants are forced to keep their goods in China’s warehouses instead. That doesn’t just result in higher costs for Kachin. Chinese merchants are also able to trade at lower prices, some merchants told The Myanmar Times.

This differs from the situation in Muse, where proper trading zones have been set up. “Unlike in Muse, there are no warehouses here, so it is difficult to keep goods. And when you keep goods in Chinese warehouses, they have the advantage of buying from us at lower prices,” said Daw Tu, a local merchant from Kan Pike Tee.

“After locating a buyer, we have to transport goods to them and if they say the goods are not in good shape, we have no place to store them. If we store them in our cars for more than one day, no one else will accept them. If there were Trading Zones and warehouses, the goods could be transported, stored and sold at the markets there,” she continued.

Currently, products ranging from rice to maize to finished goods are stored in China and can only be sold according to the prices fixed by Chinese merchants. So, Myanmar merchants are on the losing end, said U Paw Oo. 

Help needed

As such, requests to construct infrastructure such warehouses, exhibition space, cold storage facilities and cargo holds have been made during a meeting between the Kachin State Federation of Chambers and Industry and Vice President U Myint Swe recently.

In addition, as there are no such products available in Myanmar, insurance premiums for vehicles and damages must now be procured from Chinese insurance firms for goods passing through Kan Pike Tee and Lweje. 

What’s more, for damages incurred, locals must pay the fines in the Chinese currency and trades which are not facilitated by Chinese banks are conducted through illegal money transfer services. 

Currently, insurance premiums equivalent to K 260,000 per quarter are compulsory for possible damages by cargo trucks. Fines equivalent to K 20,000 must be paid if traders fail to purchase insurance, according to a truck owner.

As such, if the Myanmar Economic Bank (MEB) cannot provide insurance services on the Kan Pike Tee side, private banks should be allowed to do so, said local merchants.

Despite the presence of MEB at Kan Pike Tee, the bank does not provide other financial services outside of processing tax payments. As Ayeyarwady Bank and Kanbawza Bank are interested in opening branches there, the government should urge the Central Bank of Myanmar to facilitate this matter, U Paw Oo said.

 

(The Myanmar Times: https://www.mmtimes.com/news/myanmar-traders-losing-out-lack-facilities-kan-pike-tee.html )