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Tough economic challenge ahead for new government
The new government is facing an enormous challenge in
managing the Thai economy in the midst of tough external and domestic
factors, academics and businessmen warn. Dr. Somchai Pakapasvivat from the
Faculty of Economics, Thammasat University, said provided that the official
outcome confirms exit polls predicting nearly 400 seats in the Lower House
for the Thai Rak Thai (TRT) Party, there is zero chance for the opposition
to mount a no-confidence censure against the government. But at the same
time, such overwhelming majority will give the government a free hand to
deliver its electoral promises.
“Steering the Thai economy through rough path over the
next four years will be a totally different exercise from the time of the
previous administration. Four years from now, the global economy is bound to
be jolted by oil prices, bird flu epidemics, which will affect Thailand. We
will also face the consequences of the various free trade agreements,”
said Dr. Somchai.
Chakramon Phasukavanich, Permanent-Secretary for
Industry, said ideally, the industry and commerce portfolios of the new
government should be led by internationalized figures that are well-versed
and in sync with both domestic and global trends in trade and industry.
Praphad Phodhivorakhun, President of the Federation of
Thai Industries (FTI), said he would like to see the new government
undertake measures to stimulate both public and private sector investment.
These measures will help revive consumer spending which has shrunk since the
26 December tsunamis. The FTI would also like the government to tend to the
issue of energy prices which are the fundamental concerns of the industrial
sector.
Kiatipong Noijaiboon, Vice -President of the FTI, added
that the new government should give priority to bureaucratic reform,
particularly the coordination between bureaucrats and the private sector.
The pr ivate sector should also be more involved in major moves that
will impact them, such as free trade agreement negotiations. (TNA)
Property business grows at slower pace
The overall property business last year expanded at a
slower pace due to the expiration of tax measures issued by government to
stimulate the business and upward interest trend, according to the Bank of
Thailand (BOT).
The BOT’s Monetary Policy Committee (MOC) reported the
property business in November last year slowed down, given a marked decline
in the approved areas for housing construction, cement sales, and the number
of newly-registered houses. The slowdown resulted partly from the fact that
the calculation was made in light of the high growth base in the same month
of the previous year when a lot of properties were transferred before tax
incentives ended in December.
Still, competition in the business had intensified as can
be witnessed by an increase in the building material price index over the
housing price index in the fourth quarter of last year. MOC found the
property sector continued to grow in the fourth quarter without any sign of
over heating that could affect the overall economic stability.
In October last year the approved areas for housing
construction in municipal areas dropped while the number of houses and
condominiums registered in Bangkok and its environs increased.
However, the land trading value dropped by 11% from the
same month of the year before since there was an acceleration of the land
transfer to cash-in on the cut in transfer fees before the end of 2003.
Suchada Kirakul, senior director of the BOT’s Local
Economy Department, said a measure issued earlier by the central bank to
control the speculation on the property was another factor that made the
sector expand at a slower pace last year. Under the measure, commercial
banks that lent to home purchasers more than 10 million baht each and
property development projects more than 100 million baht each are required
to report the transactions to the central bank. (TNA)
Improvement of efficiency of business sector needed
Top executives in the private sector today responded
positively to the landslide victory of the Thai-Rak-Thai Party in the
general elections and called on the new government under the party to help
improve efficiency of the business sector and cope with problems in a more
concrete manner.
Somchai Pornrattanacharoen, president of the Thai Retail
Association, said he was happy that the new government would be still led by
Thaksin Shinawatra. But what he wanted the government to help retail
business operators in the next four-year term was to have discount stores
open new branches on a smaller scale and give major business groups a scope
of business operation.
He conceded local retail business operators are not in a
position to compete with foreign retail giants. So, it is necessary for the
government to seek cooperation from the foreign-owned discount stores to set
the opening and closing hours and to refrain from selling products at prices
below costs.
He said Thailand remained a debtor country in the past
four years. But in the next four year, he believed the country would no
longer be a debtor. So, he wanted the new government to try to help improve
efficiency of the local business sector performance to boost its
competitiveness.
Panya Chotithewan, Chairman of Saha Farm Co, said the new
government would enjoy stability given the majority voting support. It would
help boost foreign confidence in investment in Thailand. He said the
approach adopted by the previous government to solving the bird flu outbreak
was not efficient because it was implemented with too much political
involvement. So, he wants the new government to count on the majority public
support to cope with the avian influenza more efficiently so that the
country can export frozen chickens again.
Somsak Praneethayasai, president of Thai Shrimp
Association, said the previous government had managed to deal with trade
barriers from trade partners in the shrimp industry satisfactorily. Even so,
he wanted to see the new government continue its assistance for the industry
so that operators running the process to export could survive under the
current stiff competition. (TNA)
Rolls Royce appoints new
managing director in Thailand
Rolls-Royce, the world leading power systems company for
aerospace, marine and energy markets, has appointed Dan Pedley as managing
director of Rolls-Royce (Thailand) Ltd.
 Dan
Pedley
Dan Pedley brings to his appointment more than 20 years
of experience in the aviation industry. In his role as managing director,
Dan will assume responsibility for the interests of Rolls-Royce within the
region by developing the business, providing close customer support,
establishing new relationships and building on existing ones. Dan will
succeed Steve Miller, who will return to an executive position in England.
Prior to his new appointment, Dan served as Customer Business director
South East Asia. He has been with Rolls-Royce more than 20 years having
joined the company as a sponsored engineering undergraduate. He joins
Rolls-Royce Thailand at a time when Thai Airways International has
reaffirmed its confidence in the company’s powerful Trent family of
engines with follow-on orders for the Trent 800 and Trent 500.
Beauty contest backed with pretty sum
Thailand is to spend 260 million baht to host the 2005
Miss Universe Beauty Contest, government spokesman Jakrapob Penkair recently
announced. The Tourism Authority of Thailand budget for the event was
approved by the Cabinet.
The Cabinet meeting also considered a request from
pageant organizer Matching Studio Plc for tax concessions, including
exemption from personal income tax, VAT and corporate tax. However, the
Cabinet rejected the request, saying the company would be assisted through
its cooperation with government agencies.
More than a billion viewers from 50 countries are
expected to watch the pageant, with the event generating over two billion
baht in revenue. (TNA)
Car buyer complaint
center opened
Thai motorists have a new ally in the fight against poor
vehicle quality and shoddy after-sales service. The Ministry of Industry
opened a center on February 7 to handle consumer complaints about car
quality, after two high-profile disputes which saw disenchanted owners take
a hammer to their new cars in protest of persistent engine problems.
Industry Minister Pongsak Raktapongpaisal said the new
center would also serve as Thailand’s first official channel of
communications between car buyers and automakers to help improve vehicle
quality and after-sales services. Thailand is aspiring to be the ‘Detroit
of Asia’, a regional hub for automobile assembly.
The center, located within the Thai Industry Standards
Institute, will pass on any complaint that car buyers have about quality to
car makers and those involved with quality control and industry standards.
Complaints will also be forwarded to the Office of Consumer Protection
Board.
Pongsak said the Industry Ministry should be able to submit draft
consumer protection legislation concerning faulty cars to the newly-elected
parliament as soon as the House is in session. (TNA)
Unemployment in Thailand likely to hit 780,000
Thailand’s official unemployment rate is likely to rise
by over 40,000 to hit 780,000 this year, largely as a result of high oil
prices, avian flu, the southern security situation and the December
tsunamis, according to a forecast released today by the National Statistical
Office (NSO).
The office said that the number of people out of work was
set to make a significant leap over the coming 12 months. The number of
people in the active labor market is likely to rise to 36.2 million this
year, up 360,000 from last year.
However, the country’s economic growth rate looks set
to contract to 5.0-6.0 percent, down from last year’s rate of around 6.2
percent, due to a number of negative factors including the southern
insurgency, the latest outbreak of avian flu, high global oil prices, and
the tsunamis which struck southern Andaman provinces last December.
As a result, there will be a slight increase in the
official unemployment rate, with the average annual figure likely to stand
at 780,000, up from 740,000 last year. This will put the percentage of
people without jobs at around 2.2 percent, compared to 2.1 percent in 2004.
The first quarter of the year, when people are still
struggling to recover from the tsunamis, could see unemployment hit 3
percent, but this figure looks set to fall over the course of the year.
(TNA)
Private sector believes new government will continue economic policy
The chairman of the Thai Chamber of Commerce believes
that the newly-elected government will continue implementing the economic
policy of the previous administration. He called upon the new administration
to speed up bureaucratic reform, while boosting investors’ confidence.
Dr. Ajva Taulanada, chairman of the Thai Chamber of
Commerce, said the private sector could see the new government press on with
key economic policy platforms, including free trade agreement negotiations
for various countries, making Thailand the economic hub of Southeast Asia,
and the universal healthcare scheme.
Dr Ajva said the new government should speed up
bureaucratic reform, an area critical to economic development that the
previous administration had done very little over the last four years.
Still, he praised the government’s efforts in helping to nurture small and
medium sized enterprises.
Amidst the environment of high oil prices and rising
interest rates, the new government must move to ensure investors’
confidence, and Dr. Ajva expressed confidence that the TRT Party will
appoint a strong team of economic ministers.
Meanwhile, the chairman of the Thai Rice Exporters’
Association urged the new government to address the issue of rising Thai
rice prices on the world market. Chairman Vichai Sriprasert urged the new
government to correct what he calls “distortion of pricing policy.”
Under the previous government’s policy to boost the
prices of Thai rice on the global market, importers have chosen to buy
cheaper rice from other exporting countries. “As a result, Thai rice
export have declined noticeably over the last four months, from one million
tons previously to the tune of 700,000 tons per month at present,” Vichai
said. (TNA)
Wise Power Land selects Richard Ellis and K-Tech for La Royale Beach
Eric Lai (center), chairman of Wise Power Land Co., Ltd.,
recently signed a property management agreement with David Simister (second
right), chairman of CB Richard Ellis (Thailand) Co., Ltd., and a piling
construction contract with Bob Kevorkian (second left), chairman &
managing director of K-Tech Construction Plc, for the luxurious La Royale
Beach residential development on Jomtien Beach. The signing was witnessed by
Sombat Chancharoensin (left), managing director of Wise Power Land Co.,
Ltd., and Sumalee Tavivoradilok (right), executive director of CB Richard
Ellis (Thailand) Co., Ltd.
Le Royale Beach, located on Jomtien Beach south of Pattaya City, is an
exclusive two-billion-baht real estate development comprising of six
beachfront pool villas, a 30-storey condominium and 8 triplex garden villas.
Agencies told to slash unrealistic aid budgets for tsunami victims
The Thai government has ordered a scaling back of
proposed official spending on tsunami relief, saying officials have
exaggerated the number of people affected by the December 26 disaster.
Deputy Prime Minister Suwat Liptapanlop, who is overseeing the allocation of
government assistance, said the reassessment would save up to 600 million
baht.
Suwat was speaking to journalists after he chaired a
meeting of the tsunami victims’ aid fund which is helping those in the six
southern provinces affected by the devastating Indian Ocean sea surge to get
back on their feet. The deputy prime minister said he had assigned each
government agency involved, such as the Labor and Social Welfare Ministry
and the Fisheries Department, to compile an accurate figure of the actual
number of tsunami victims. ‘’Each agency has written down far too many.
However, we will extend the deadline to help the victims,’’ he said.
The deputy prime minister said the aid fund meeting had
approved proposed compensation for 770 damaged tourist boats, worth 90
million baht. ‘’On moral grounds, the meeting also agreed to compensate
70 percent of the damage cost of a number of unregistered fishing
boats,’’ he said.
A further 12 million baht went to the Fisheries
Department to repair docks and another 208 million baht was given to the
Defense Ministry for its work. Suwat said the government would also help
around 1,100 children left orphaned by the tsunami. (TNA)
Starbucks re-opens store on Patong Beach
Hopes to help restore tourist confidence in Phuket
Following the unprecedented natural disaster of the
tsunami, Starbucks re-opened its store in Patong, Phuket, on Chinese New
Year Day after a complete reconstruction. Starbucks Coffee Company and
partners (employees) are seen as taking active steps to boost morale and
contribute to the reconstruction, hoping to help Phuket’s community
gradually restore tourist confidence.
Starbucks
employees rejoice in the re-opening of the store.
Starbucks is taking a long-term, holistic approach to
support the future of Phuket’s community. One of Starbucks guiding
principles is to contribute positively to the communities and environment
the company operates in.
“Starbucks will continue to assess the needs of our
impacted community in the months and years to come and provide the
appropriate resources that could include funding, store support of local
rebuilding efforts and more. Together with the local government and the
community, we are aiming at helping to restore the Patong Beach area, making
it attractive again to tourists who should gradually return to our area,”
said Andrew Nathan, managing director Starbucks Thailand.
To mark the re-opening of Starbucks store in Patong, students aged ten to
twelve from Ban Kalim and Ban Sai Nam Yen School were invited to make
artistic paintings on panels of outdoor walls on the theme “My
Dream-Phuket”.
Government moves to boost second hand car export market
Thailand’s Commerce Ministry has announced it will
relax controls on the import of used cars for modification and export to
third countries. “The move will allow more entrepreneurs to import used
cars and modify them for use in neighboring markets,” the director general
of Internal Trade, Rachane Pojanasunthorn, said.
Only those operating out of a special export zone are
currently allowed to bring in such vehicles for modification and resale in
other countries. Under the new regulation, the Customs Department will be
able to license other business people to do the same.
Rachane said that the ministry wants to support the
growth of what is a rapidly expanding sector. The value and number of
exported cars has doubled in the 2002-2004 period, and is set to increase
this year.
Cambodia, China, Laos and Myanmar are prime markets for
these modified used cars. Vietnam and South Africa are also promising export
destinations. However, Rachane said exporters had to clearly understand each
country’s regulations on used car imports to meet all requirements. (TNA)
Visa reports volatile plastic use post-tsunami
Visa Asia-Pacific reports that overall spending for
travelers visiting the region has remained resilient in the weeks following
the tsunami. International inbound card spend showed a year-on-year growth
of 19 percent for the region, with a lower growth of 16 percent for the
affected countries.
Executive vice president, James Murray, said the positive
trend was attributable to limited damage and swift recovery in tourist
areas. “Only specific locations were impacted within each country, leaving
many other key tourist destinations operational. Furthermore, recovery
efforts have advanced rapidly in many areas, especially those relying on
tourist spending,” he said.
Not all of the affected countries have enjoyed the
positive regional trend. Sri Lanka and the Maldives have been slow to
recover. During the first four weeks of January, Visa International card
spend in Sri Lanka fell by 19 percent and by 42 percent in the Maldives.
(TTG Asia)
Phuket Fantasea reopens
In a further sign that normality is beginning to return
to Thailand’s south-western beach destinations, Phuket’s biggest
attraction reopened earlier this week following a 12-day closure.
Phuket Fantasea, a must-see cultural theme-park for tour
groups, closed at the end of last month, during which time the owners took
the opportunity to do some routine training and maintenance.
Phuket Fantasea director of sales, Supreecha
Suthamanondh, said the attraction would not normally be closed during the
high season. “But low attendance after the tsunami on December 26 provided
an opportunity so we did some retraining of staff, planted some more trees
and did things we can’t normally do when the place is full,” said
Supreecha.
He said attendance, since reopening is still well below
the average of 2,500 per day at this time of year, and Fantasea will lose
money until numbers pick up. But he believed that reopening would send a
positive signal to the trade that Phuket is once again “open for
business”. (TTG Asia)
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