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Export growth forecast cut to 1%

Posted by pakin On April - 22 - 2015 ADD COMMENTS

Amid stubborn sluggishness in global trading, the Commerce Ministry has bit the bullet and now projects export expansion at only about 1 per cent this year, not 4 per cent.

“Thai exports this year are expected to grow more than 1 per cent, but may not reach the previous goal of 4 per cent.

“The slowdown in shipments has increased in line with other countries, while the Thai government in cooperation with private enterprises will try to draw up a new strategy to push exports as much as possible,” Commerce Minister Chatchai Sarikulya said yesterday.

After the ministry’s meeting with government agencies and private sector organisations, including the Board of Trade of Thailand and the Thai Chambers of Commerce, Federation of Thai Industries, Thai National Shippers Council and other trade associations, Chatchai said that despite the downtrend in global commerce, the ministry will work closely with companies to boost sales of each product category to promising overseas markets.

According to a survey by Global Trade Atlas among 40 countries, only four, including China, Chile and Switzerland, have enjoyed increased trade during the past years.

Other countries, including Thailand, Asean countries, European Union countries and the United States, have faced a dip in export growth along with the slowing global economy.

The ministry has divided export categories into 10 clusters so that it can brainstorm with the players in each segment to increase orders from various markets.

Ten clusters

The 10 clusters are agriculture and foods, electric appliances and parts, automobiles and parts, garments, jewellery and ornaments, construction materials, healthcare products, lifestyle products, logistics and various products to the Cambodia, Laos, Myanmar and Vietnam markets.

Shipments should return to the growth path in the second half of the year, he added.

Vallop Vitanakorn, vice president of the Thai National Shippers Council, said shipments are expected to show an upsurge of 3 per cent in the remaining two quarters after flattening out this quarter.

The council has called on the government to establish distribution centres in neighbouring countries to support Thai trade in Asean. It has also urged for a cut in freight fees as they impose a high cost burden on traders.

Supant Mongkolsuthree, chairman of the Federation of Thai Industries, said the ministry should continue providing financial support to small and medium-sized enterprises under the SME Proactive project.

It should promote local products with the “Product of Thailand” logo to increase recognition of the quality of Thai goods, he said.

It should solve the problem of the baht since Thailand’s unit has strengthened by 1 per cent against other currencies, which have depreciated by 2-10 per cent. The baht’s advance against other currencies has eroded the country’s export edge, he said.

Kalin Sarasin, vice chairman of the Board of Trade, encouraged the government to call for a meeting to address and solve export problems, which have been raised by many trade associations.

It also supports the establishment of distribution centres in many target markets such as India, the Middle East and Asean.

MARTIAL LAW, which had raised concerns among local and international investors as increasing business risk for them, was in fact one of the factors that boosted confidence in the special economic zones in border areas, Deputy Transport Minister Arkhom Termpittayapaisith said last week.

Thailand is working to materialise a plan to become Asean’s economic hub. Several measures to encourage and facilitate investment in the SEZs are being discussed and on their way to being implemented, he said.

“The government aims to create a synchronised system of SEZs by providing them with sufficient infrastructure,” said Arkhom, who is also secretary-general of the National Economic and Social Development Board.

The government plans to boost investor confidence in the SEZs by instituting policies to assure political stability, granting privileges to investors through the Finance Ministry and Board of Investment (BoI) and forging connectivity with neighbouring countries under the concept of “Thailand Plus One”.

Martial law, which covers the whole country, is a measure referred to as “draconian”, but it assures internal stability, enabling an environment that is friendly to economic activities.

“We have to look at martial law as a measure to build investor confidence, especially during this time,” he said.

The national process of reconciliation would certainly take time, but when the new charter goes into force, the situation will return to normal.

The economic policies of this government remain anchored on the same set of rules that assure investors of a suitable climate for investment.

“Recently, the National Legislative Assembly (NLA) ratified the Cross Border Transport Agreement and adopted five bills to facilitate the free movement of goods,” he said.

As for the issues related to insurance for industries investing in border areas where martial law is still being implemented, the prime minister promises to find suitable solutions to respond to investors’ needs.

Only some groups of investors are worried about the consequences of martial law enforcement.

“Many business groups have been in Thailand for a long time and still remain here despite some ups and downs in Thai politics. This means it [martial law] does not have an impact,” he said.

Among all the incentives granted by the BoI, investors would be allowed to receive a waiver of corporate income tax and of import duties on machinery as well as permission to employ foreign workers in labour-intensive industries.

As an alternative to the BoI’s tax breaks, investors could also opt for incentives granted by the Finance Ministry, which would also allow a reduction in corporate tax from 20 per cent to 10 per cent for 10 years.

“Thailand Plus One” would accompany SEZ projects, so Thailand could forge more links with neighbouring countries.

“Any Asean investor can invest in the SEZs to receive privileges from Thailand plus bordering countries such as Myanmar, Laos, Cambodia and Malaysia,” he said.

Thailand Plus One is a strategic business model initiated by Japan’s corporations in 2012 to encourage investors to maintain their main operations in Thailand while diversifying supporting production in the supply chain to neighbouring countries for comparative advantage.

Areas such as Mae Sot and Aranyaprathet are pioneers in creating linkages among Thailand, Myanmar and Cambodia.

Plans to build roads and other infrastructure would soon be implemented.

A tripartite working relationship between Japan, Thailand and Myanmar on the Dawei port project has been envisioned, with Thailand taking part in the first phase of road development.

Aranyaprathet’s proximity to Cambodia makes this location suitable for the development of logistics between Thailand and Cambodia, he added.

This is the final report in a series by The Nation on special economic zones to deepen economic integration in the Asean community with developed border areas.

Japan ODA paper highlights ties with Asean

Posted by pakin On March - 11 - 2015 ADD COMMENTS

TOKYO — A white paper on official development assistance highlights the importance of Japan’s cooperation with the Association of Southeast Asian Nations for the country’s national security, according to a copy of the document obtained Tuesday .

The ODA White Paper for 2014 to be released later this month states that “achieving growth and stability in this region has a great significance” not only to the region but to “Japan’s security as well.”

The white paper apparently emphasises the significance of ties with the 10-member Asean in reference to the growing influence of China on the region.

It comes after the cabinet of Prime Minister Shinzo Abe adopted a foreign aid charter early last month that states that ODA can be used to support foreign armed forces in noncombat operations such as disaster relief, infrastructure building and coast guard activities.

The white paper also calls Asean an “extremely important market and place for investment for Japan” and notes that the distribution network for goods “underpinning the Japanese economy runs through the Asean region.”

Asean, which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, has a combined population of over 600 million people.

Mr Abe’s government sees the need to provide aid to countries near the sea lane from the Straits of Malacca to South China Sea, given its strategic importance to Japan in terms of the import of natural resources from the Middle East, Japanese officials said.

Noting how the ODA has been successfully utilised for the past 60 years, the document says the ODA is “not only contributing to recipient countries and international community but Japan’s peace, stability and prosperity too.”

Touching on China, the world’s second-largest economy, the document says Japan will disburse ODA in “limited” cases such as technical cooperation on food production in China.

Vietnam in rare note of ’79 China war

Posted by pakin On February - 18 - 2015 ADD COMMENTS

HANOI – State media in Vietnam made a rare move of marking the anniversary of a border war with China Tuesday with a series of news articles describing the battles of Vietnamese guerrillas.

China invaded Vietnam’s northern provinces on February 17, 1979 after Vietnamese troops ousted the Beijing-backed Khmer Rouge regime in Cambodia. The short conflict claimed tens of thousands of lives on both sides and ended with Chinese forces withdrawing and both Hanoi and Beijing claiming victory.

The topic of Vietnamese-China relations is highly sensitive in Vietnam and is usually censored in the mainstream media. Attempts by anti-China protesters to hold events to commemorate the anniversary are usually stopped by police.

China is a major trading partner, but the two countries often disagree over competing territorial claims in the South China Sea. Their relationship reached a critical point last year when Beijing towed an oil rig into waters claimed by Vietnam.

On Monday, Prime Minister Nguyen Tan Dung condemned China over the recent building of islands in the sea and vowed to protect Vietnam’s sovereignty.

“February 17 1979 is the painful day for our nation,” prominent economist Le Dang Doanh said on his Facebook page.

“When the two countries normalized relations in 1991, China asked Vietnam not to mention this date. That is why we have no official activities to celebrate this event today.”