Thai Cabinet nod for fund to back 10 targeted sectors

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FUND
Cabinet nod for fund to back 10 targeted sectors
Erich Parpart
The Nation

BANGKOK: -- Cabinet has approved in principle a Finance Ministry proposal to set up a Bt10-billion fund to boost national competitiveness and new investment projects in 10 "future" industries targeted by the government.

These sectors were identified by the Industry Ministry and expected to be new engines for national economic growth. The industries consist of five sectors which will be upgraded technologically and five industrial clusters.

They cover next-generation cars; smart electronics; affluent, medical, and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels; and biochemical, digital, and medical sectors.

Finance Minister Apisak Tantivorawong said: "The fund will be used to support our policy objective beyond what the BoI (Board of Investment) can offer to investors. There will be new legislation to implement measures under this proposed fund. Cabinet approval is expected in the next one to two weeks."

Visut Srisuphan, deputy finance minister, said funding sources include the fiscal budget and off-budget money. Details will be submitted to Cabinet shortly.

Earlier, the Finance ministry proposed that surpluses from the health promotion fund and the national sports development fund should be used to finance the national competitiveness fund to upgrade industries lagging behind other nations due to sluggish new investment over the past few years. At present, health promotion and sports development funds get money from a 2 per cent earmarked tax on tobacco and alcoholic beverage sales.

Tax exemption, extra incentives

The government is capping the two funds at Bt4 billion and Bt2 billion per year, respectively, so that surpluses can be diverted to other uses, including the national competitiveness promotion fund.

Companies supported by the BOI currently get a corporate income tax exemption for up to eight years. If they invest in new projects that are covered by the government's 10 "future" industries, they will get additional incentives from the Finance Ministry via the national competitiveness fund.

The proposed fund will also provide personal income tax breaks for researchers and other experts to encourage expatriates to work here for know-how |transfer in the 10 targeted industries.

Two committees will be set up to implement this policy aimed at large multinational firms. One will be chaired by Prime Minister Prayut Chan-o-cha and the other by deputy premier for economic affairs Somkid Jatusripitak.

Somkid will also lead a delegation of economic ministers to Japan today to try to persuade Japanese firms to invest in the 10 targeted industries, the super clusters, the special economic zones on Thai borders with neighbours, plus infrastructures projects.

The Federation of Thai Industries' chairman, Supant Mongkolsuthree, told The Nation that the national competitiveness fund should be attractive to large firms wanting to invest here.

He said the government should act as facilitator and make it convenient for foreign investors to launch projects here so Thailand can be a more innovative and competitive manufacturing base for multinational firms.

Source: http://www.nationmultimedia.com/business/Cabinet-nod-for-fund-to-back-10-targeted-sectors-30273633.html

-- The Nation 2015-11-25

[EnglishGuru]

I wish them all the best.

However, as a point of National Policy and strategic planning, bribing foreign countries businesses to pay for infrastructure seems wildly unsound. Not to mention you only succeed in foster foriegn business inovation. In general I do not believe these types of ponzi schemes, especially sin taxes used to improve health, have shown particularly encouraging results.

However, go guys.. At least the statements were forward looking and clear....the 'off the book revenues' or political slush will finally be used for the benfit of the Thais. A good thing. All the foreign companies that come to locate here will benefit from lower R&D and reap the windfall to allow even further global expansion.

The need for a more truly educated work force may drive change in education....pie in the sky I know. And Thailand will have sold ever more of itself to foreign interets that will, unlike in the US, become entrenched and a self perpetuating polical force acting outside the policy, laughable as they may be, interests of Thailand.

I still hope it works.