|
Board of Investment unveils “BOI 3-2-1” strategic plan
The Board of Investment (BOI), chaired by deputy prime
minister and minister of finance Somkid Jatusripitak, recently approved a
three-year strategic plan, designed to attract more investment. The plan,
which is called “BOI 3-2-1” is designed to make Thailand the most
attractive investment location in ASEAN by the year 2004. The objective of
this strategic plan is to increase investment, both domestic and foreign,
to a level of at least 200 billion baht per year, of which at least 50%
will be in the target industries.
Under the program, over the next three years there will
be increased focus on the following three industrial groupings, each of
which will have policies and measures specific to their industry, taking
into consideration factors such as competitiveness, market potential and
levels of technology: industries with high long-term growth potential that
need nurturing and development; existing industries that need to be
strengthened in order to effectively compete in the global marketplace;
and industries that need to be expanded and extended to take advantage of
their competitiveness.
The Board also will develop specific investment
promotion strategies that are more proactive and industry-specific, in
order to improve both the quality and quantity of investment, to help
develop and enhance sustainable growth of the Thai economy.
As part of this effort, the BOI will disseminate both
broad-based and tightly focused information, in order to be able to advise
investors of the opportunities that exist, thereby increasing investor
interest in Thailand as an investment site, while, at the same time,
maintaining the current investor base.
This is all part of the BOI’s mandate to increase
foreign investment in Thailand through expansion of services and creation
of an enabling investment environment, a task that becomes more critical
with the implementation of the ASEAN Free Trade Area (AFTA) and the
formation of the AFTA/China regional trade accord.
Minister Chaturon Chaisang announced the results of the
latest JETRO study of Japanese foreign investment trends, which ranked
Thailand #3 in the world for the next three years.
Japanese business indicated Thailand has many
strengths, when compared to China, including political stability,
transparency of legal system, tax system, capabilities of work forces,
established infrastructure and supporting industries, and a stable
economy. Perceived weaknesses included the size of the work force, initial
investment costs for manufacturing, and market potential.
Foreigners to be able to lease land soon
Foreign ownership of land in Thailand has been a
contentious issue for decades. Foreign investors and private individuals
have long sought to be able to purchase ‘free-hold’ land without
setting up complicated companies with Thai partners in which the foreign
investor or the private individual does not actually own the land, but the
registered company owns the land as an asset with a group of Thai
partners. This convoluted and out-dated method has drawn complaints from
both quarters and has been a huge impediment to foreign investment and the
inflow of foreign exchange throughout the years. There is a long-standing
and xenophobic idea that foreigners will buy up land and shoot prices out
of the reach of ordinary Thai citizens. Change in the law regarding
foreign ownership of land has been long debated, but as to date, the laws
regarding this issue remain in tact.
As an alternative to changing the ownership laws, the
government now hopes to seek parliamentary approval for its plan to allow
foreign investors to hold leases of up to 99 years on land for commercial
and industrial purposes.
Deputy Interior Minister Sombat Uthaisang recently said
that a draft bill on the proposed foreign long leases would be ready for
Cabinet review in about two weeks, before the government sends it to
parliament for debate and endorsement. Sombat expects the Thai parliament
to review the bill during its upcoming four-month sitting starting next
week. (TNA)
MOI wants Daihatsu to make tuk tuk engines locally
The Industry Ministry plans to convince Daihatsu Co,
the Japan-based vehicle maker, to set up a plant to produce engines for
the assembly of tuk tuk (three-wheeled motored vehicles) in Thailand under
the Thai Chaiyo Tuk Tuk Program.
Deputy Industry Minister Pichet Sathirachawal said
Pranakorn Yontrakarn Co, a local distributor of Daihatsu vehicles, had
expressed its intention to jointly produce the tuk tuk by importing
engines from Daihatsu Co for the assembly of 500cc-tuk tuk engines in
Thailand. Total investment would come to one billion baht.
But Pichet disagrees with the import of engines for the
assembly. Instead, he wants Daihatsu to either set up a manufacturing
plant in Thailand to produce the engines in-country or transfer engine
production technology
“Given the government’s support for the program, we
prefer that Daihatsu takes this opportunity to set up its plant to produce
the tuk tuk in Thailand because the vehicle still has growth potential for
local sales and exports.” He said the World Bank had recently expressed
interest and support for the Thai Chaiyo Tuk Tuk Program since it is in
line with the bank’s policy to encourage the use of 4-stroke vehicles to
ease pollution. Thailand sees that the future in export of the tuk tuk in
the region as promising given the bank’s support policy. (TNA)
Government plans new strategy to attract foreign investment
Fresh approaches are on the drawing board to attract
investment to state enterprises on the list for privatization. The Thai
government plans to allow foreign investors to invest in state enterprises
before they are privatized as part of its efforts to attract foreign
investment. Government Spokesman Yongyuth Tiyapairat said Prime Minister
Thaksin Shinawatra had instructed ministers in charge of overseeing state
enterprises to study the plan.
Yongyuth said, “Foreign investors and creditors
should have an opportunity to invest in the enterprises prior to
privatization so they can help improve management efficiency and prepare a
proper accounting system so that they can restructure business operations.
“More importantly, the investment would help ease
debt burdens of many state enterprises. Foreign investors would be given
government-guaranteed papers if they decided to invest in the enterprises.
Should the investors view the enterprises as having promising prospects,
there would be a debt-to-equity swap. But if investors find that
efficiency in performance is impossible to attain, they could redeem their
investment plus interest. This approach would facilitate the
privatization, “ he said. (TNA)
Weakening yen boosts international reserve, says BOT
Bank of Thailand’s governor M.R. Pridiyathorn
Devakula said the country’s international reserve has increased due to
the bank’s move to buy foreign currency and the weakening of Japanese
yen. He said the bank was closely monitoring the movement of foreign
currencies, especially the yen.
Although the baht had weakened along with the yen, it
did not signal that the country’s competitiveness would decline. Many
exporters said the local currency lost its strength, but remained stable.
Their exports had not been affected because the baht still moved within an
expected range.
The BOT chief admitted the bank had recently purchased
foreign currencies in an offshore market. This, coupled with the weakening
of the yen, resulted in an increase in asset value of the central bank.
Given these factors, the country’s international reserve had risen over
the past several weeks, he said.
The baht has been moving in the same direction as the
yen but was less volatile. On February 4 it traded between 43.97 and 44.01
to the dollar before closing at 44 while the yen moved in the range of
132.86 and 133.47 to the dollar before closing at 133.30.
A main reason why the baht is less volatile than the
yen is a continued foreign capital inflow into the Thai stock market. (TNA)
Number of applicants to open factories likely to rise this year
The Industrial Works Department expects the number of
applicants for licenses to establish factories will increase this year on
the back of the country’s economic recovery.
Issara Chotiburakarn, deputy director-general of the
department, disclosed that the number of successful applicants for the
licenses last year totaled 3,077 with investment amount of 103 billion
baht, creating 86,000 jobs. Included were 56 rice mills with investment
amount of 1.43 billion baht, 36 motorcycle repair factories with 172
million baht, and 33 plastic-made furnishing plants with 1.19 billion baht.
Factories seeking business expansion totaled 832 with
investment amount of 100 billion baht, creating 124,632 jobs. Factories
seeking business shutdown totaled 5,505 with investment amount of 45.9
billion baht, leaving 80,714 unemployed.
“It is expected the number of applicants for licenses
to open new plants will rise this year since the economy is likely to
recover,” Issara said.
Applicants for licenses this year were required to
prepare a report on the analysis of risks from business conduct. The
department will give priority for approval to those applicants who
consider the environment and safety of workers and people in the vicinity
of their factories. (TNA)
Businessmen remain confident of economy
Most businessmen remain confident the country’s
economy will pick up in tandem with the United States economy, which is
expected to recover sooner than expected. Rachaen Pajanasuthorn, spokesman
of the Commerce Ministry, unveiled a business forecast based on the survey
of 1,016 entrepreneurs in 44 of Thailand’s provinces.
The index shows 60.2% was confident the Thai economy
would improve in the next three months as a result of the
sooner-than-expected economic turnaround in the US and the expected
decline in oil prices.
The index revealed 50.9% believe the economic condition
will remain unchanged while 14.4% viewed the economy will worsen. Grouped
by the region, entrepreneurs in the central region were most confident of
the economy as 64.3% believed it will pick up, followed by those in the
east with 63%, the northeast with 62.4%, the north with 61.4%,
Bangkok and environs totaled 59.6% and the south with
52.6%.
Grouped by sectors, the index showed optimistic
confidence in the financial and insurance institutions which was increased
most to 71.1%, followed by services 63.9%, agriculture 63.6%, commerce
60.2%, industry 56.6% and construction 55.6%. Rachaen said the
entrepreneurs proposed that the government to do the following things to
boost the economy:
Take concrete measures to help enhance competitiveness
of retail shops that are suffering loss due to the arrival of superstores
in accordance with the market mechanism,
Press commercial banks to accelerate lending to
businessmen,
Try to create jobs to ease unemployment,
Inject more money into various sectors which are
flagging to stimulate the economy, and
Help exporters to seek new markets.
Many businessmen felt that if government could
implement these measures swiftly and effectively, the Thai economy should
pick up in the second half of this year. (TNA)
SET to make road show of listed firms overseas this month
The Stock Exchange of Thailand plans to make a road
show overseas this month following calls by Hong Kong and Singaporean
investors for listed companies to present corporate information for
potential investors on the two islands.
Kittirat na Ranong, president of the SET, said many
brokerage houses in Hong Kong and Singapore, considered the two main
financial and investment hubs of the region, are beginning to show an
interest in the Thai stock market. The SET itself was also approached to
show its performance to the investors. It is expected the road show would
begin by this month.
Kittirat said many listed companies intend to organize
a road show to give foreign investors access to the information on their
performance. This was promised a few years ago, but response was
indifferent. Now, foreign investors, especially those in Hong Kong and
Singapore are showing renewed interest in Thai stocks. The road show, if
successful, would be able to draw a huge amount of foreign investment back
to the Thai stock market, he said.
The market capitalization of the SET has increased by
200 billion baht to 1.8 trillion in January from 1.6 trillion in December
last year. The increase was a good signal that some portions of savings
flowed back to the stock market although no new companies were listed in
that period. Stock values of listed firms have risen along with improved
market fundamentals. The Thai stock market is currently outperforming
those of neighboring countries, confirming local and foreign investors
have greater confidence in the bourse. (TNA)
PM to visit China soon
Prime Minister Thaksin plans to visit China to discuss
issues of regional interest. The focus is on an invitation from Beijing to
join in the Asian Corporation Dialogue (ACD), which was earlier proposed
by Thailand to promote closer trade ties and cooperation among Asian
countries. Thaksin wants to hold talks with both the Chinese president and
prime minister.
However, at present there has been no conclusion about
how China wants to proceed with this concept. Therefore, the Thaksin wants
to follow up on the issue when he visits Beijing again soon. “After my
working visit to Beijing, Thailand will host an informal meeting of Asian
countries to further discuss the ACD initiative in either April or May,”
he said.
India has responded to the ACD initiative, and that it
is likely that other Asian countries will also join. “I would like
cooperation in the initiative from China to push for closer regional trade
ties and cooperation. It would be in the whole region’s interest to
cooperative rather than go head-on in competition, and will seek
Beijing’s decision soon, “he said.
The initiative is aimed at opening the Asian market for
Asian people, as the ASEAN market alone is now too small to accommodate
the world trend. (TNA)
|
