One of the issues Andrew Walker discusses in The Legend of the Golden Boat is the relationship between grocery shop owners in Chiang Khong and their Lao trader customers. This situation of cross-border business is now undergoing change with a new generation running the Chiang Khong businesses. In the Golden Boat it is personal social relations that maintain, and to a certain extent constrain, the on-going interdependency between the Thai grocery stores and the Lao long-distance river traders.
Now, while some of the long-established Lao traders still receive some preferences for credit provision, the numbers of traders dealing with the Chiang Khong shopkeepers is declining since new traders are not able to access the old forms of economic-based socialization in this transitional period of trade. The shopkeepers in Chiang Khong prefer to limit the numbers of traders to whom they provide credit to those they have done business with for many years. The new traders now face financial problems since they need to receive credit from the shops but the shop owners do not agree to this arrangement. These traders, without good credit provision, cannot establish their business satisfactorily with Chiang Khong suppliers, and hence need to move to another area of border trade or change to other careers. One shop keeper estimated that only about 30 Lao traders buy goods with credit from Chiang Khong grocery stores, while it was about twice that number five or six years ago; his shop has only four or five regular trader customers with limited extended credit.
The process of altering business patterns from credit to cash-based dealing is, however, working quite slowly – a good situation for the existing Lao traders. The problem lies in the fact that the suppliers in Chiang Khong do not cooperate well among themselves. The atmosphere of the goods supply business is competitive, making the credit system still one of the practical, though not completely satisfactory, mechanisms for shopkeepers to attract customers and increase sales. The old style shopkeepers still want a market share by maintaining credit provision to the Lao traders based on a traditional mode of social relations while the new suppliers see it as an obstruction to lucrative business and hence are striving to promote a formal cash economy instead.
Another change, caused by the GMS cross-border trading arrangements, is the volume and the means of transportation of Thai goods to Laos. The trend of cross-border trade is now shifting from the hands of local small-scale grocery stores (who receive goods from factories mostly in eastern Thailand’s industrial estates) to the manufacturers directly transferring their products themselves using their own vehicles for transportation across borders. The line of merchandise shipping is moving toward a linear transportation system operated by the manufacturers using large container-trucks to directly transport large consignments of products at one time to destinations in Laos, bypassing the middlemen of local distributors and grocery stores.
It is predicted by the grocery shop owners in Chiang Khong that within the next ten years the small-scale border business of supplying Thai groceries to Lao traders will unfortunately disappear. This prediction is based on their experience of rapid changes in the river trading system. The experience of declining profit and declining numbers of business operators is not just occurring in the shopkeeping sector. In fact, it has already happened among the long-distance river traders almost a decade ago.
Go to Golden Boat update 1, update 2, update 3 and update 4.