Monday, August 21, 2017
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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.”

Chinese investors strongly drawn towards Thailand

Posted by pakin On February - 16 - 2015 ADD COMMENTS

Thailand is set to be a strategic investment destination for Chinese companies, not only to cash in on a huge domestic market, but also using the Kingdom as springboard to export products to Asean and other markets around the world.

However, Thailand needs to improve the efficiency of government services as the processing of work permits and visas for foreign firms that want to set up operations here, as well as helping them lower their production costs, one Chinese investor says.

Xu Gen Luo, chairman of Thai-Chinese Rayong Industrial Realty Development Co, said that with the rapid development of China’s economy, its companies had been integrating more and more with the world economy.

Despite its higher production costs compared with China, Thailand has other strengths make it an attractive country in which to invest.

The main factor is Chinese manufacturers’ desire to enrich their products’ diversity of origin. They also want to expand their business into the Thai market and use this country as an export springboard into global markets. Moreover, Chinese companies want to take advantage of the Kingdom’s resources such as rubber.

The Chinese government has encouraged companies to invest abroad, providing low-interest loans and tax incentives, as well as direct capital support.

“China is a young country whose modernisation and industrialisation progress has taken place for only 30 years. It takes time for Chinese companies to improve and strengthen themselves first before expanding their business into global markets,” Xu said. Thailand is located in the centre of Asean and has a great investment atmosphere and harmonious cultural environment. Investment security in Thailand is quite well ensured. That is why more and more Chinese investors have come to Thailand, he said.

He said more than 1,000 Chinese companies are operating here, including trading and manufacturing firms.

Thai-Chinese Rayong Industrial Realty Development was set up in 2005 as a joint venture between China’s Holley Group and Thai industrial-estate developer Amata Corporation.

Its core businesses are an investment advisory service and the rental and sale of land and factories. Its purpose is to build a platform for Chinese investors to develop and expand their business in Thailand.

Xu said the group decided to form the partnership with Amata for three reasons. First, Vikrom Kromadit, chief executive officer and managing director of Amata Corp, is a strategic-minded businessman who enjoys a very high reputation in Thailand. Second, Amata is a well-developed and successful industrial-estate company with years of experience. Third, Amata City is in Rayong, which enjoys the Board of Investment’s Zone 3 investment privileges.

“Factories in our industrial zone have invested US$1.2 billion so far in the first and second phases,” he said.

“Currently, there are more than 60 manufacturers in the industrial park, occupying total land area of 2,000 rai. Most of them are in such industries as electronics, motorcycles, vehicle parts, and renewable-energy industries like solar panels. They have employed about 1,000 Chinese workers as well as 10,000 Thai workers.”

Xu added that about 60 per cent of the estate’s products were exported to many markets around the world, particularly the US and Europe.

“We plan to add another 1,000 rai initially in our Phase 3, which will start this year, and will add another 200 factories in our industrial estate.”

Industries specialising in renewable energy and high-technology products will be the new focuses, he said, noting that with its relatively high costs of production, Thailand needed to concentrate on high-value-added industries. He said this year marked the 40th anniversary of the establishment of diplomatic relations between China and Thailand. It is apparent that the cooperation between the two countries, such as on the economy, politics, culture, and communications, has stepped into a new stage.

China is now Thailand’s No 1 trading partner and importer of its products. Chinese investment in Thailand last year totalled Bt38 billion. Xu said the government needed to improve the efficiency of its visa and work-permit processing to attract more foreign investors.

As well, as the Asean Economic Community becomes fully effective this year, affecting the movement of the regional labour market, Thailand should be doing something to bring down its production costs.

“We are looking forward to the AEC,” he said, adding that Asean could become a mutually complementary and beneficial ecosystem in terms of resources, capital, trade and labour.

He said the government’s railway project would be mutually beneficial to China and Thailand. Its significance is not only economic but also in politics and culture.

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