Border Economy: Issues and Problems Faced by Traders in The Rantau Panjang Duty-free Zone

Abstract

Rantau Panjang Duty-free Zone is located between the state of Kelantan (Malaysia) and Golok Town (Thailand). This paper seeks to identify issues and problems faced by traders in the Rantau Panjang Duty-free Zone. In addition, the study also aims to identify socio-demographic characteristics of the traders, especially in terms of their citizenship status, sources of supply, ownership status of business premises, sources of capital and income. Data collection using questionnaire, conducted via face to face interviews with 52 traders as respondents, indicates that the main issue facing local traders is competing with traders from Thailand who rent business premises owned by local citizens. About 77% of the premises were rented from the original owner without the knowledge of the authorities. The issue of dual citizenships is still an unanswered question when 48% or the respondents refused to answer the relevant question. The weakness of enforcement along the Sungai Golok and Rantau Panjang Duty-free Zone causes smuggling of goods where most of the smuggled goods are traded in the business premises in the Duty-free Zone. This study also found that about 70% of the traders’ sources of supply are from Thailand, brought-in either legally or illegally. There are a total of 73% of women traders, and about 82% of the capital for business come from own savings or family assistance.

Keywords: Border Economy, Rantau Panjang Duty-free Zone. Malaysia-Thailand Border.