Deputy Commerce Minister Alongkorn Ponlaboot has floated an idea of developing a new economic "verandah" by forging closer ties between Thailand's five southern provinces and Malaysia's five states.

Thai government officials will meet with Malaysian counterparts to discuss a new economic partnership in June next year, said Mr Alongkorn after his three-day visit to Malaysia and three southernmost provinces ending Friday.

Businesspeople, investors, members of the Thai Chamber of Commerce, the Federation of Thai Industries and tourism-related associations will also be invited to participate in the meeting.

The initiative covers Thailand's five southern provinces of Narathiwat, Pattani, Yala, Satun and Songkhla. The five Malaysian states are Perlis, Kedah, Perak, Kelantan and Penang.

The partnership between the 10 territories would mainly cover trade, investment, tourism and halal food, said Mr Alongkorn.

The government pledges to offer investment promotion measures and tax incentives to firms willing to participate in the scheme.

The Commerce Ministry plans to provide soft loans worth about 25 billion baht with an interest rate as low as 1.5% a year to support the project, said Mr Alongkorn.

"I believe the new economic verandah under which co-operation would cover the border areas of the two countries would help promote investment and tourism. This will play a key role in upgrading the income of the local people and create jobs, particularly in the three restive southern provinces," said Mr Alongkorn. "This would help address the lingering violence in the South."

Last year, border trade between Thailand and Malaysia topped 410.1 billion baht, a rise of 22.4%. This represented 62% of total border trade, which was valued at 814.04 billion baht last year.