The economic importance of this election

By The Nation

 

 

With a vast EEC scheme hanging in the balance, Thailand must maintain stability to attract more investment

 

Thailand’s post-election economic outlook will largely hinge on political stability and the continuity of key economic policies, especially those designed to drive growth over the next decade or two via investment in the so-called new S-curve industries.

 

The Eastern Economic Corridor (EEC) mega-investment programme is expected to figure prominently if the next government has at its head some of the same people who formulated the plan. If not, the new administration will have to start from square one to chart a fresh economic development course.

 

In the past four years, the outgoing administration has implemented multiple preparatory measures for the EEC project, whose objective is to promote investment in the next-generation automotive industry, intelligent electronics, advanced agriculture and biotechnology. Other S-curve enterprises targeted are food processing, medical tourism, digital industry, robotics, aviation and logistics, comprehensive healthcare, biofuel and biochemicals.

 

The groundwork has been laid in three EEC provinces. More importantly, potential investors from Japan, Europe and China have expressed serious interest in the EEC programme. They are awaiting the outcome of the March 24 general election and whatever implications it might hold for the future of this massive investment scheme. The programme’s economic prospects are good, but the crucial political component will remain uncertain until the new government is formed.

 

Due to the EEC plan’s long-term strategic significance, the next government will face an uphill battle in attracting further foreign investment amid unprecedented and disruptive technological changes. Thailand has reaped substantial benefit from the last round of major investment in the industrial sector, marked by the launch of the Eastern Seaboard programme more than three decades ago.

 

But unless the country ushers in a fresh and comparable mega-investment programme to draw in new investors and cultivate more projects, it will no longer be competitive against the rapid development underway in Vietnam and other emerging economies.

 

Japan, which remains the largest foreign investor in Thailand, has for example adopted the “Thailand-plus” investment strategy for all of Southeast Asia, in which it aims to connect its sprawling investment and manufacturing assets here with new projects in neighbouring countries, especially in Cambodia, Laos, Myanmar and Vietnam (CLMV).

 

Chinese conglomerates such as e-commerce giant Alibaba are also keen to use Thailand’s EEC programme and its advantageous location as a springboard to tap the CLMV markets. For European conglomerates such as Airbus, the EEC scheme is suitable for servicing the fast-growing regional aviation industry.

 

All these foreign investors along with their Thai counterparts are hoping simply that the election goes smoothly and Thailand returns to the democratic path with the level of political stability essential to supporting another round of private investment projects.

 

In the end, the Thai economy needs fresh foreign and domestic capital to finance the new generation of industries and businesses that take advantage of new technologies. This will be crucial if GDP is to be sustained in the 4-5-per-cent per-annum range over a decade or two, amid worries about accommodating an ageing population and rising competitive challenges from emerging economies.

 

To demonstrate such confidence, the country’s political landscape must be conducive to investors’ aims and ambitions. If the election results are not acceptable and politics remains unstable, we would have to brace for another round of disaster.

 

Source: http://www.nationmultimedia.com/detail/opinion/30363339

 

-- © Copyright The Nation 2019-02-01

The primary economic importance would be to bring back the Thai Bhat to a more realistic exchange rate say  35 THB for 1 US$ !!!!

Just get serious  about the air quality,stop showboating ,deflecting and stalling, waiting for the monsoon season to wash this problem away for another year....

Edited February 1, 20197 yr by mok199

Accepting the ballot result will be hard for a lot of locals as I see it 

if the junta passing on the 500 baht, plus rubber subsidies, has any effect,

 spending big with the Chinese military to keep the EEC open  as a carrot for the longer term investing,

The path way for growth is there can the local power brokers see it?

44 minutes ago, observer90210 said:

The primary economic importance would be to bring back the Thai Bhat to a more realistic exchange rate say  35 THB for 1 US$ !!!!

I feel as if I am in nightmare. My dollar has plummeted, and everyday I look at its value its seems to keep depreciating. I don't get how Thailand can keep their bht so strong and attract any foreign investors. 

 

My very best guess is that they are trying to buy Euros and Greenbacks for the day they decide to deflate the bht. Seems like only logical explanation.

 

In the meantime I am rolling on the floor in pain at the value of the CDN dollar.  

40 to the dollar would be better still and back to what it was.

 

7 hours ago, webfact said:

The Eastern Economic Corridor (EEC) mega-investment programme is expected to figure prominently if the next government has at its head some of the same people who formulated the plan. If not, the new administration will have to start from square one to chart a fresh economic development course.

It's not like the program is copyrighted or patented.

It's not owned by the junta government.

If a politically and financially inexperienced military junta can create the EEC, surely the next government consisting of experienced political and economic leadership can continue the program without the same people who formulated it. Those junta people who formulated the program might in practice not be desirable in any event given their lack of consideration for skilled workers (Japan says Thailand lacks 30,000 skilled workers to support the EEC), adequate planning for natural resources and infrastructure. Prayut's use of Article 44 to accelerate the project bypassed several laws and regulations such as the EIA that could have brought transparency to the project and potential flaws in the program.

 

Matter of fact the EEC is an official part of the NCPO's 20-year development plan that is constitutionally mandated. With a pro-military Senate for the next five years and substantial economic commitments already made by foreign nations in the EEC, it will be difficult to amend the EEC program (if not impractical) in order to "chart a fresh economic development course."

Everybody and their dead uncle knows it's just the start of a countdown to the next coup. Business as usual.

14 hours ago, webfact said:

springboard to tap the CLMV markets

None of these countries are interested in playing second fiddle to Thailand, especially not Vietnam.  If they use U-TAPAO airport as a trade free zone and goods do not go through Thai customs, it could work as a cash cow for the green team.  Other than that, how is it competitive ?