Vol. II No. 41 Saturday October 11 - October 17, 2003
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BUSINESS NEWS
HEADLINES [click on headline to view story]:

Baht volatility worries labor-intensive exporters

Thailand’s factory working conditions to be upgraded

IMF suggestion on inflation brushed aside

Baht volatility worries labor-intensive exporters

The government should attempt to closely supervise the baht to curb its volatility; otherwise the export of labor-intensive products, including textiles, would be adversely affected, according to an industry executive.

Suchart Chandranakaraj, President of the Association of Thai Garment Industry, said that the textile export grew around 8-9% in the first seven months of this year and that it was projected that the export of the product would enjoy 6-7% growth for the whole year since the global economic direction had improved. He added that the competitiveness of exporters had been enhanced since the government began assisting them in seeking new export destinations.

“However, what should be of concern now is the continued appreciation of the baht. The situation, if allowed to go unchecked, will have a negative impact on the export, particularly labor-intensive products such as textiles. It will also reduce competitiveness of other industries with those of foreign countries,” Suchart warned.

Suchart projected that if the situation persists for six months to one year, some textile operators might have to close business or halt business expansion plans.

“Right now, the effect of the stronger baht may not be clear. But if the baht strengthens and stays at 39 to the US dollar for a while, some operators will suffer losses and have to close their business”, he said. (TNA)


Thailand’s factory working conditions to be upgraded

The Federation of Thai Industries (FTI) is teaming up with the Thai Health Promotion Foundation (ThaiHealth) to upgrade working conditions in the nation’s factories in a bid to boost the quality and quantity of production and ensure better conditions for production plant workers.

After signing an agreement with ThaiHealth, FTI President Praphad Phodhivorakhun said, “Both organizations realized the importance of upgrading the quality of life for factory workers. They are aware that good physical and mental health of workers serves to boost production in terms of quantity and quality, as well as having a beneficial impact on workers and their families.”

Deputy FTI President Niphon Suraphongrakcharoen added that FTI would offer support to the Quality for Work Life program in the form of ideas, labor, venues and funding.

Niphon said that two committees will be set up to determine the program’s goals, with factory standards expected to be drawn up over the next couple of years. He also stressed that factories would not have to incur any additional expenses in order that the standards be met.

Meanwhile, ThaiHealth Manager Dr. Suphakorn Buasai expressed confidence that the program would act as an important strategy in the sustainable improvement of factory working conditions, having a long term impact on Thailand’s industrial competitiveness.

Under the program, workers will be encouraged to participate in management decisions. Pilot studies will be carried out in 20-30 selected factories, while the two organizations will promote the establishment of a network of factories across the country aimed at improving working conditions. (TNA)


IMF suggestion on inflation brushed aside

The Bank of Thailand (BOT) and the National Economic and Social Development Board (NESDB) have brushed aside a suggestion by the International Monetary Fund (IMF) that the country raise the target inflation rate from zero to prevent possible deflation.

Previously, the IMF had projected the Thai economy would continue to grow this year. However, it said the government should closely supervise the economic development since the financial and business sectors remained engulfed with non-performing loans.

The IMF also suggested that the BOT consider increasing the target minimum inflation rate from zero to stand in positive territory because the inflation rate, if allowed to stay very low, would put the economy under the pressure of deflation should there be any crisis.

BOT’s Governor M.R. Pridiyathorn Devakula said still saw no need for the country to raise the target inflation rate.

Chakramon Phasukavanich, NESDB’s Secretary-General, said that he did not think the Thai economy was on the path to deflation, adding that inflation would increase automatically when the economy continued to grow. “We should not accelerate consumption in an excessive manner. The consumption will grow naturally when the economy expands,” he concluded. (TNA)



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