Thai govt serious about economic reform for sustainable development

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Government serious about economic reform for sustainable development
By Digital Content



BANGKOK, Jan 29 -- The Thai government is seriously reforming the economy for sustainable development, Deputy Prime Minister Pridiyathorn Devakula asserted today

At the 'Thailand Moving Forward Forum' he said that the Thai economy would recover this year due to investment inputs from the government sector which would stimulate the private sector as well.

The value of investment projects seeking promotional privileges from the Board of Investment peaked at the highest amount in 50 years.

Other factors to boot the economic recovery this year included political and economic reform moves by the present government, he said.

Political problems have limited Thai economic growth rate at 3 per cent for the past five years, but the rate stood only at 1 per cent last year.

Mr Pridiyathorn said the government was developing Thailand into a production center, applying tax incentives to encourage international businesses to set up their international headquarters in the country and promoting investment in the digital economy. (MCOT online news)


-- TNA 2015-01-29

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Govt told to focus on R&D, cut down on graft to boost competitiveness
ERICH PARPART
PICHAYA CHANGSORN
THE NATION



BANGKOK: -- THE JOINT Foreign Chambers of Commerce and top executives yesterday called on the government to focus on the promotion of research and development, improvement of human resources, reduction of corruption and liberalisation of the service sector to lift the country's competitiveness.

Stanley Kang, chairman of the JFCCT, said foreign investor sentiment has risen because of the improvement in government efficiency.

The foreign chambers applaud what the government is doing in economic reform, but it should also concentrate more on long-term investment in soft infrastructure such as education and innovation to allow for the creation of value-added products.

That would counter the problem of labour shortages, reduced competitiveness in the export of certain products and rising capital costs, he told the "Thailand Moving Forward" international conference organised by The Nation and the Wall Street Journal.

"Competition from neighbouring countries is getting stronger since they have cheaper labour and land, which means that Thailand has lost its edge in investment cost.

"The country's property and land costs have increased every year and now are some of the highest in the region," he said.

"Right now we are ahead of our neighbours and we have a good supply chain, but we have to find a niche for the future, which requires good policies to support it along with added value, and that requires increases in research and development and better human resources," he said.

The efforts to become a trading nation and the introduction of the international headquarters and international trading centre schemes "might be new for Thailand but it is not new for the region".

The government should concentrate more on R&D and the development of human capital to increase the competitiveness of the country.

Thailand spends only 0.25 per cent of its gross domestic product on R&D while Malaysia spends triple that and Japan spends about 3 per cent.

Besides developing domestic human resources, Thailand can also acquire skilled labour from overseas.

However, to better attract such experts, an improvement in work permit and visa requirements for foreign professionals is needed to provide them with "better working conditions".

The government should further liberalise the service sector, eradicate the Foreign Business Act and provide the international community with more information on the reasons why martial law is still in effect, since people abroad might not understand the need for such a measure at the present.

Chantana Sukumanont, an adviser to Siam City Cement, said she expects the cement business to be better this year thanks to the economic recovery.

Cement demand per capita is expected to increase from 519 kilograms last year to 537kg this year.

It is also positive to see that the government is planning to invest in railways since that can greatly reduce the country's logistics costs.

The economy needs the government to invest to support economic growth and increase the country's competitiveness, but she would not believe in anything until she sees it.

’There’s enough talk already’

The country spends about 5 per cent of GDP on logistics and 85 per cent of resources and goods are transported by road.

"If there's no ground-breaking [on government investment projects], I do not believe in anything. One recommendation I have for the government is to 'just do it'. There's enough talk already," she said.

Stanley has also said the foreign chambers want to see a significant reduction in corruption in the coming years to boost foreign investor confidence.

Pramon Sutivong, chairman of the Anti-Corruption Organisation of Thailand, has insisted that the country is already improving in this area since Thailand has moved up 17 places to 85th in the 2014 Corruption Perceptions Index ranking from 102nd in 2013.

"One good example is that businesses do not have to wait forever for the manufacturing operating permit [Ror Ngor 4] anymore because of the reduced corruption and changes in regulations, which greatly shortened the waiting period," he said.

Frank Krings, chief country officer of Deutsche Bank, said transparent competition can be good for Thai companies and the country.

Thailand has to change the mind-set that competition is an inconvenience.

The anti-competition and anti-trust laws in the Kingdom should undergo reform since they are largely ineffective and inefficient for an economy that is the size of Thailand's.

Companies should also adopt a broader international outlook to enhance the level of their competitiveness.

"International investors choose not to finance and invest in companies whose success is based on any type of shortcut they have taken... what investors like is a company that is willing and able to compete in a transparent way and a company that is willing to compete outside of its own turf," he said.

Thongma Vijitpongpun, chairman and chief executive of Pruksa Real Estate, told the seminar that cheap oil was good for every industry, including real estate. Housing prices were expected to rise by only 2 per cent this year, compared with annual growth of 5-7 per cent seen in many years.

"Because Thailand is a [net buyer of oil], lower oil prices will bring costs down and consumers will be able to buy everything more cheaply," he said.

Sutapa Amornvivat, chief economist of SCB, said Thailand's long-term growth outlook was discouraging.

Dragged down by factors including its ageing population, a serious skills mismatch in its labour force, lack of productivity and low investment by the public and private sectors in the past, the country has entered a "new normal" period that could see annual growth of only 3 per cent.

The military government's infrastructure projects and surging demand from neighbouring countries will help add half a percentage point to that 3-per-cent figure, bringing the potential for annual growth of gross domestic product to 3.5 per cent.

"Investment in hard infrastructure does not bring in prosperity. It only provides a condition for prosperity," she said.

Soft infrastructure - such as rules and regulations, human capital, institutions and trade facilitators - was critical, she added.

Ninnart Chaithirapinyo, vice chairman of Toyota Motor Thailand, said this country should focus on Cambodia, Laos, Myanmar and Vietnam and on introducing one-stop service systems and good traffic management at border checkpoints.

"Tourism should be the first priority," he said.

Source: http://www.nationmultimedia.com/business/Govt-told-to-focus-on-R&D-cut-down-on-graft-to-boo-30252959.html


-- The Nation 2015-01-30

[zaphod reborn]

"The government should concentrate more on R&D and the development of human capital to increase the competitiveness of the country. Thailand spends only 0.25 per cent of its gross domestic product on R&D while Malaysia spends triple that and Japan spends about 3 per cent. Besides developing domestic human resources, Thailand can also acquire skilled labour from overseas."

This is all true. Yet, companies in Thailand fail to realize that they require foreign-trained management in order to remain competitive in light of ever-increasing domestic labor costs. In order to recruit foreign-trained management, the company must cultivate a truly international work culture. This all starts with a company's HR department. Until companies realize Thainess is holding them back, they will find that they no longer are competitive in the modern economy.

[PepperMe]

How can you cut down on graft if the junta has already stated that you will only be investigated as a punishment for misbehaving?

[rickirs]

Recently, both Deputy Prime Minister Pridiyathorn Devakula and Commerce Minister General Chatchai Sarikulya predicted a GDP expansion of 4% in 2015 as “definitely achievable.”

But now – “The military government's infrastructure projects and surging demand from neighboring countries will help add half a percentage point to that 3-per-cent figure, bringing the potential for annual growth of gross domestic product to 3.5 per cent.”

Democrat Party leader Abhisit Vejjajiva warned that the government needed to speed up efforts to revive the economy or else the post-coup administration would it difficult to stay on. The solution to a waning TYhai economy is not State secret.

The Junta is failing to deliver an economic stimulus and it will fail to deliver a 3.5% GDP growth rate.

“The economy needs the government to invest to support economic growth and increase the country's competitiveness, but she [Chantana] would not believe in anything until she sees it.”

"If there's no ground-breaking [on government investment projects, I do not believe in anything. One recommendation I have for the government is to 'just do it'. There's enough talk already,"

Unfortunately, the Junta is not the Nike to the Thai economy. It has been focused on messages, slogans, “gifts,” and populist subsidies. These are not contributors to a sustainable economy.

Gen. Prayuth may be having another retirement ceremony before the year is out. But fear not, there will be another general ready to fill his army boots.

[rubl]

Recently, both Deputy Prime Minister Pridiyathorn Devakula and Commerce Minister General Chatchai Sarikulya predicted a GDP expansion of 4% in 2015 as “definitely achievable.”

But now – “The military government's infrastructure projects and surging demand from neighboring countries will help add half a percentage point to that 3-per-cent figure, bringing the potential for annual growth of gross domestic product to 3.5 per cent.”

Democrat Party leader Abhisit Vejjajiva warned that the government needed to speed up efforts to revive the economy or else the post-coup administration would it difficult to stay on. The solution to a waning TYhai economy is not State secret.

The Junta is failing to deliver an economic stimulus and it will fail to deliver a 3.5% GDP growth rate.

“The economy needs the government to invest to support economic growth and increase the country's competitiveness, but she [Chantana] would not believe in anything until she sees it.”

"If there's no ground-breaking [on government investment projects, I do not believe in anything. One recommendation I have for the government is to 'just do it'. There's enough talk already,"

Unfortunately, the Junta is not the Nike to the Thai economy. It has been focused on messages, slogans, “gifts,” and populist subsidies. These are not contributors to a sustainable economy.

Gen. Prayuth may be having another retirement ceremony before the year is out. But fear not, there will be another general ready to fill his army boots.

On the other hand we had the previous government with financially unsustainable schemes like the RPPS.

Anyway, reduced and eventually minimalised corruption will certainly help make investments be more effective.

[MaxLee]

Government serious about economic reform for sustainable development

Like what?.... "We eat rice, and Falang eat bread??"