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BOT unconcerned
over movement of the baht
The governor of the Bank of Thailand (BOT), M.R.
Pridiyathorn Devakula has expressed satisfaction with the present movement
of the baht, as he considers the current value appropriate under the present
economic conditions.
The central bank has intervened to support the baht and
ensure its stability after the local currency weakened rapidly over the past
week, he admitted to journalists on Thursday.
It has now begun to stabilise at a suitable level in the
current economic conditions, the BOT governor said.
The baht has depreciated by around 2% against the dollar
and 5% against the euro since the end of April.
The weakening of the baht is likely to lead to an
increase in Thailand’s exports to the European Union (EU) because they are
now cheaper.
But a further depreciation in the baht would severely
affect exports to other destinations, except the United States, he said.
“We don’t want the baht to weaken too much but we are
committed to allowing the market mechanism to establish its exchange rate.
We also do not want the currency to strengthen too much because it will
affect the value of imports,” said the BOT chief.
The government’s decision to float diesel prices was
the right move as it is likely to help the country save on energy.
M.R. Pridiyathorn shrugged off mounting concern over
higher inflation. The central bank is well prepared to cope with inflation,
he said. (TNA)
Asian countries to lead world economy
Asian economies, led by China, Japan and India, are
growing rapidly and will play an increasingly significant role in the world
economy, visiting Singapore Senior Minister Goh Chok Tong said here on
Thursday.
The growing Asian economies, especially China, Japan and
India, would spearhead the world’s future economic growth, the former
Singapore prime minister told a Bangkok audience.
China, Japan and India are likely to become future world
economic giants.
Their rapid growth, greater competitiveness and economic
self reliance would soon make them economic rivals to the United States and
the European Union (EU), he said.
However, the growing competition between Asian countries
could cause economic disputes, the Singapore senior minister warned.
Southeast Asian economies, including Thailand, Malaysia,
Vietnam and Singapore, are also significantly expanding and attracting
large-scale and modern investment projects.
The Southeast Asian economies would become a major
driving force in the development and prosperity of the Asian economy as a
whole, he predicted.
The former Singapore prime minister was visiting Thailand
to participate in the 15th Asian Corporates Conference in Bangkok June 9-10.
Major economic issues, including prospects for regional
and world economic growth and the global energy situation, were the top
topics discussed at the two-day seminar.
More than 800 Thai and foreign experts attended the
conference.
The impact of the last December tsunami on the regional
economies was also discussed.
The visiting Singapore senior minister and Prime Minister
Thaksin Shinawatra held a private meeting here last week. (TNA)
Govt to set up new task force
to probe finances of state officials
Prime Minister Thaksin Shinawatra insisted that he would
press ahead with the establishment of a special task force aimed at probing
the finances of state officials.
The prime minister, who stressed that the new task force
would not duplicate the work of the National Counter Corruption Commission
(NCCC), said that the task force would, instead, relieve the commission of
some of its workload.
“The NCCC has nine members. They simply can’t cope.
There are over 2 million state officials, as well as state enterprise
workers,” he noted.
Not all state officials will have to declare their
finances to the new task force.
The new body will be specifically aimed at state
officials who work directly with the public, and who might run into
conflicts of interest.
Although the task force will deal with officials at all
levels, it will focus on officials holding positions which could be easily
open to corruption.
The prime minister said that he was currently trying to
decide who should sit on the committee, and had asked Deputy Prime Minister
Wissanu Krea-ngam to help oversee the issue.
Stressing that the new task force did not break
constitutional law, he said that it would not violate the personal freedoms
of state officials, and would only open up the files of officials who were
subject to complaints. (TNA)
BOT decides to raise repo by 0.25%
The Bank of Thailand (BOT) has increased its key 14-day
repurchase interest rate by 25 basis points to 2.5% — the highest rate in
four years — to help curb the country’s rising inflation rate.
The Repo rate has been raised because the Thai economy
has grown more slowly than projected because of hefty oil prices, the
tsunami disaster and the violent unrest in the country’s southern border
provinces, BOT’s deputy governor, Bandid Nijathaworn, told TNA on
Thursday.
Rising fuel prices pushed up Thailand’s basic inflation
rate to 1.2% in May, from 0.8% in April.
Inflation is likely to continue to rise because of high
oil prices and increased production costs, he said.
“Inflationary pressure has mounted considerably. So
monetary policy is being used to control the inflation rate and ensure it
won’t affect the economy,” he said.
The Thai economy should continue to expand satisfactorily
despite the negative factors, Bandid said.
Private spending will still play a key role in
stimulating the Thai economy.
The BOT’s increase in the Repo rate is a signal to
commercial banks that they can now increase their interest rates.
How quickly these rates rise will be depend on the
individual banks’ liquidity, he said.
The BOT was particularly concerned about the current
trade deficit of US$3 billion in the first four months of the year.
Thailand’s current account deficit is expected to
continue this year because of high imports of fuel and capital goods.
Government agencies have been instructed to supervise the
deficit and the economy should continue to grow by 4.5-5.5%, Bandid said.
(TNA)
Million treasures of Rayong
is finger lickin’ good
Chatchanan Chaisree
Suan Yason (Khon Khoey Ma), a village style restaurant in
Rayong where customers eat with their fingers instead of using a spoon and
fork, opened five years ago said owner Uthaiwan Ngernbookkhon. Members of
the family and neighbours do the cooking. Customers are from the province
and from as far away as Chantaburi and Trat, the latter tending to call in
over the weekend for lunch.
Customers
seated in a circle to enjoy khaw karb mark.
The signature dish of the house is “khaw karb mark”,
or “the million treasures of Rayong”, made from rice with shrimp paste,
zalacca, onions, fresh chillies and grilled fish.
To prepare, said Uthaiwan, first mix the shrimp paste, zalacca, onions
and fresh chillies with the hands, then put in the cooked rice and eat with
the grilled fish and cooked vegetables. Don’t use a spoon to eat it:
instead, enjoy the texture of the food on your fingers. Khaw karb mark is a
rural convenience food often taken when going out into the countryside to
work, or when travelling, as it stays fresh for a long time.
World Bank praises Thai economic growth and investment environment
The head of the World Bank in Thailand has praised
Thailand’s economic growth. He said the country had developed a more
promising investment atmosphere than either India or Brazil.
Thailand’s economic growth has been impressive and the
country’s investment environment internationally renowned, the World
Bank’s director for Thailand, Ian Potter, told a seminar in Bangkok.
Thailand ranked after Malaysia but ahead of India and
Brazil, according to the World Bank’s two-year economic survey of 50
countries.
But the World Bank director warned Thailand that
government red tape and the country’s bureaucratic culture could hinder
investment growth.
Thailand should improve its workforce’s foreign
language and computer skills, he suggested.
It is difficult to maintain an impressive economic growth
rate in the face of competition from other countries, especially the
emerging East European nations, where the costs of investment are relatively
low, he warned.
Meanwhile, a senior economist at the World Bank said
Thailand still lacked enough professional workers and basic infrastructure.
Thailand needs to improve its capacity to compete with
other nations by relaxing its tough government regulations, which have
proved a significant obstacle to foreign investment, he said.
Bangkok’s investment environment is far more
encouraging to foreign investors than other parts of the country, he said.
Half of Bangkok’s businesses use the Internet and
information technology (IT), compared to only 30 percent of Thai companies
in the South and the Northeast, he said.
Thailand must improve the ability of its workforce even
though it is likely to push up capital costs by 15 percent.
The country needs to improve in several areas to stay
competitive in the view of foreign investors, the deputy secretary general
of the National Economic and Social Development Board (NESDB), Arkhom
Termpittayapaisith said.
‘’We need to do more to increase the country’s
production capacity, improve the workforce’s skills, and reduce the
customs process, to allow imports and exports to flow more quickly,” he
said. (TNA)
Thailand committed to valuable labour
Thailand is fully committed to promoting basic labour
rights, Labour Minister Sora-at Klinpratoom has told the International
Labour Organization (ILO).
Addressing delegates at an ILO meeting in the Swiss city
of Geneva, Sora-at spoke of Thailand’s recognition of the importance of
the value of labour through the promotion of basic labour rights, support
for social arbitration, the upgrading of educational achievements and the
expansion of employment opportunities for women and young people.
He also noted that the Thai government was working to
create new entrepreneurs among small-scale industries within the framework
of the government’s overarching policy of poverty elimination.
At the same time, he said, the Thai government attached
extreme importance to the problem of human trafficking, and had already
signed agreements with Cambodia, Laos and Cambodia to legalise the status of
workers from these countries, giving them the same rights as Thai workers.
The Thai government had also signed agreements with
Cambodia, Laos, China, Vietnam and Myanmar concerning human trafficking in
the Mekong sub-region, he added. (TNA)
PM to open nation’s first
community biodiesel plant
Thailand received its first community biodiesel
production plant last Saturday when Prime Minister Thaksin Shinawatra
officially opened the project in the northern province of Chiang Mai.
The project represents a cooperative effort involving the
Department of Alternative Energy Development and Efficiency and several
other bodies currently conducting research into the use of biodiesel as an
alternative fuel.
A pilot scheme for the project has seen the production
plant combine used oil from a potato chip factory with conventional diesel
fuel at a ratio of 2:98.
Able to produce 100,000 litres of the fuel each day, the
plant will cost the fuel Bt0.50 (50 satang) per litre below the price of
diesel.
According to Boonthong Ungtrakul, head of Chiang Mai’s
biodiesel research project, tests on over 1,000 vehicles have shown that
biodiesel does not harm vehicle engines, and in fact reduces emissions.
Biodiesel is already on sale in two Chiang Mai petrol
stations, and will be sold in another three stations in the province by the
end of this month.
Research will now begin into formulas which use
proportionately more vegetable oil – much of it derived from local cafes -
and less diesel.
Glycerine, a by-product of the production process, will
also be used to make soap and shampoo in the future, when the Department of
Alternative Energy Development and Efficiency hopes to expand the project to
other areas. (TNA)
‘S Car’ to be materialized in one month
The design for the Thai government’s new model
‘energy-saving car’ has been completed and the project to build it will
be launched within a month, Industry Minister Watana Muangsook told
journalists on Wednesday.
The government plans to use tax incentives to encourage
motorists and government agencies to use the model car, dubbed the ‘S
Car’, he said.
“The government wants government agencies and taxi
drivers to be the first to use the ‘S Car’ and hopes other motorists
would follow suit,” Watana said.
The government plans to raise the excise taxes on various
types of pick-up trucks to offset the reduced tax revenue from the sales of
the ‘model car’.
“The planned increase in excise duties on pick-up
trucks will be around 2-3 percent, or about 8,000 to 10,000 baht each,
depending on the models. This is expected to have a minimal effect on truck
owners, as it is relatively small compared to the purchase price of the
trucks,” the minister said. (TNA)
No need to panic over economic woes
Prime Minister Thaksin Shinawatra has urged the public
not to panic over the economic problems currently facing the country.
The government will work even harder to deal with them,
he said on Friday.
Rising fuel prices, the violent unrest in the country’s
southern border provinces, the impact of the last December tsunami disaster,
the current account deficit and higher inflation has eroded confidence in
the country’s economy, the prime minister conceded.
“It is normal that everybody should feel upset with the
current economic woes. But don’t panic and be cool, because the government
will work harder to cope with them,” Thaksin said.
But people need to be prepared to contribute too.
“We will do our best. However, everyone needs to try to
help themselves as well,” he said.
The prime minister said he had asked government agencies
to consider any request from transport operators who have been adversely
affected by the rising oil prices. (TNA)
Leading economist warns
of US bubble economy
The economic bubble in the United States is likely to
burst next year as a result of inflated property prices and the country’s
persistent current account deficits, according to a leading economist.
The US economy is experiencing difficulties in many
areas, the president of Phatra Securities Plc, Supavut Saichue, told a
seminar in Bangkok on the US economist Paul Krugman’s analysis.
Apart from the chronic current account deficits, the US
is facing a marked decline in direct investment and investment in stocks, he
said.
Asian central banks, especially the Bank of China, have
invested more than US$500 billion in US bonds.
The US property sector is in the throws of a bubble
growth cycle, which could burst at any time and affect the economy, he said.
“Many analysts predict that US bubble growth will burst
in 2006. Personally, I agree with this projection,” he said.
Two issues need to be closely monitored, he said.
The first is who will be the new Federal Reserve (FED)
chairman and whether he can ease the country’s huge current account
deficit of more than US$800 billion.
The second is China’s response to US pressure to adjust
the value of the yuan.
“Despite the fact that China has huge investments in US
bonds, serious problems may occur if there is change in the relative value
between the renminbi and the dollar,” he said.
The US government is likely to significantly revamp the
economy soon, he predicted.
In particular, it will try to reduce imports and increase
exports, which, in turn, will affect countries that export goods to the US.
This would seriously affect many countries around the
world, causing an economic slowdown, he said. (TNA)
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