Finance Ministry assures strong baht not yet hurting exports
Finance Minister Suchart Jaovisidha is assuring exporters
that the strong baht is unlikely to be a hindrance to exports for the near
Traders anticipated the Bank of Thailand (BOT) will
intervene to avoid the strengthening of the baht and its negative impact on
the country’s economic growth.
The US dollar has been reeling from the slowing US
economy and the sell-off of dollar contracts by global fund manager George
Thailand’s economic growth is largely dependent on
exports and domestic consumption. Export and industry analysts have been
concerned about the strengthening of the Thai baht against the US dollar.
“The weaker dollar is a result from heavy selling.
However, it is not weak enough to create any adverse effect at the
moment,” said the finance minister.
Suchart conceded that if the dollar becomes too weak it
will have some impact on the world economy, particularly the economy of
European countries. He added that Soros, who had been offloading his dollar
accounts, has predicted that the weak dollar could do serious damage to
Suchart admitted that a stronger baht could raise the price of Thai
goods. “But it will also help lower the price of imported oil” he said.
PTT predicts fuel demand will exceed supply
PTT’s president Viset Choopiban recently stated that
demand for natural gas among local power producers is likely to exceed its
original projection on the back of a continued economic recovery of economy.
PTT is Thailand’s largest oil and gas conglomerate and has projected it
may not have enough natural gas to supply local power plants in the next two
to three years.
“To meet the rising demand for natural gas among local
power producers, PTT will speed up its construction of a third pipeline
network linking its sources in the Gulf of Thailand to onshore points in the
southern province of Songkhla,” said Viset.
The investment cost for PTT’s third pipeline is based
on a growth of about 3 percent a year for the Thai economy over the next 6
years; however growth has been greater than expected.
PTT’s vice-president Prasert Bunsumpun said PTT’s
existing dual main gas pipelines can pipe a maximum of 2,700 million cubic
feet daily of natural gas. But if growth continues at its present rate local
power producers’ demand is likely to reach 50 million cubic feet daily, a
demand higher than PTT can supply.
Prasert projected domestic power producers will continue
to use natural gas of around 2,750 million cubic feet daily for fueling
their power plants until 2005. Then the industry may need about 1,000 liters
of bunker oil a year to fuel their power plants to make up for the
Lack of computer use hampers Thai businesses
Thai businesses are not growing as fast as they should
due to an extremely low level of computer and information technology use,
with nearly 46 percent of businesses surveyed failing to use computers in
their day-to-day operations, according to a recent report published by the
University of the Thai Chamber of Commerce (UTCC).
Thanawan Pholwichai, director of the UTCC’ s Center for
Economic and Business Forecasting, said that a recent survey of 608
businesses in Bangkok and the surrounding provinces, ranging from small and
medium-sized enterprises to large-scale companies, showed that as many as
46.4 percent did not use computers.
Thanawan said that Thailand should focus on product
innovation and quality, rather than trying to compete with low prices.
Computer usage in Thailand is extremely low compared to
other countries, where the use of computers reduces costs and facilitates
communication. Many Thai companies see computers as high initial costs. They
also lack skilled personnel and the high budgets needed to train them.
The survey found that in the trade sector 47 percent of companies did not
use computers, compared to 31 percent in the service sector and 20 percent
in the manufacturing sector. Moreover, most computers were used for data and
accounting operations, and few companies had plans to use computers to
expand their businesses.
Japanese keen on investing in Thai SMEs
A recent investment road show in Japan revealed many
small- and medium-size enterprises in Japan have shown interest in boosting
investment and trade with Thai counterparts, according to the Board of
Board of Investment (BOI) secretary general Sompong
Wanapa said, “Many Japanese investors would like to invest, particularly
in Thailand’s automobile and electronics industries. It is possible more
than 100 SMEs could decide to follow major investors in shifting their
investment to Thailand this year.”
Discussions with potential Japanese investors revealed
the epidemic of the Severe Acute Respiratory Syndrome has renewed their
interest in investing in Thailand after they had previously focused
investment on China.
The BOI chief said meetings with several major
electronics operators in United States also proved fruitful, saying they
showed interest in shifting their production base, particularly for
hard-disk products, to Thailand. To give the investors confidence, BOI said
it might need to plan a road show in the US again. (TNA)