Thai manufacturers should be more proactive in tapping opportunities in Myanmar and Vietnam, says the Thailand Development Research Institute (TDRI).
President Somkiat Tangkitvanich said Myanmar offers low labour costs and high workforce productivity plus inexpensive raw materials and a good location for exporting commodities.
But the once-isolated nation must overcome weaknesses such as meagre infrastructure, power shortages, political instability and dubious law enforcement.
Other drawbacks include limited access to information and vague laws and regulations, causing many of them to be constantly revised.
Yangon, the former capital, and nearby provinces are suitable locations for investment. They have better basic infrastructure than other areas of the country, said Mr Somkiat.
TDRI researcher Ploy Thammapiranon said Myanmar is attractive because the EU is mulling restoration of the country's trade privileges, while the US may lift sanctions and provide tax privileges.
For its part, Vietnam also features low labour costs and a skilled workforce, along with question marks concerning rule of law and basic infrastructure.
TDRI research fellow Saowaruj Rattanakhamfu said the outlook for investing in Vietnam is interesting because foreign investors can hold a 100% stake.
The TDRI's recommendations are based on a study of three manufacturing sectors: garments, shoes and leather, and jewellery and ornaments.
The study suggests Thailand and its neighbours set up a one-stop service centre to ease activity among regional small and medium-sized enterprises and encourage them to invest abroad.
This new agency could provide information and insights into the benefits of trade and tax benefits for foreign investment while offering an overview and details about investment law and infrastructure.
The centre could also play a role in speeding the establishment of special economic zones in border areas such as Mae Sot in Tak province and Aranyaprathet in Sa Kaeo.