Property market expected
to slow down next year
The government’s decision not to extend measures to
stimulate the property business will put a brake on the real estate market
growth next year, according to the Kasikorn Research Center (KRC).
The think tank said that the decision to end the
collection of special business tax rates at 0.11 on property and to resume
the normal tax at 3.3% would affect the real estate business, but not
adversely because the market had already absorbed the news.
However, it is expected that property developers,
particularly of housing projects, would accelerate building houses to ensure
completion of the projects by the end of this year; so they could take
advantage of high demand for houses for now to increase sales as much as
The KRC projected that the high demand for houses would
gain momentum until the end of the year since many potential buyers would
decide to purchase houses before the state stimulus measures for property
business ended. It said the rush to buy houses this year would be a main
reason for the expected slowdown in the property market growth next year. As
well, higher costs of developers in terms of rising prices of building
materials and land, and stricter regulations on construction and consumer
protection would affect the growth to a certain extent. (TNA)
EGAT eyes LNG in
place of oil for generating stations
The Electricity Generating Authority of Thailand (EGAT)
is scrambling to search for new means of fuel to power its generating
stations in the future, as fears grow that fuel oil use could soar to 3
billion liters and that generating costs could reach as high as 10 billion
baht over the next two years.
EGAT is considering the use of LNG gas for use in new
generating stations, now that several sources of LNG have been discovered in
countries, including China and Malaysia and is currently conducting
feasibility studies on the use of LNG.
Warning that national electricity demand looked set to
skyrocket over the next couple of years, EGAT Governor, Sithiporn
Rattanophat, said that this would, in turn, increase fuel use and this could
raise fuel oil usage way above the present rate of 200-300 million liters
and push up generating costs.
“In order to avert a potential crisis, EGAT will begin
using electricity from the Phu Horn station as soon as possible, while also
negotiating the purchase of fuel oil with a sulphur content of 3.5 percent
or higher, compared to 2 percent at present. At the same time, EGAT will
burn fuel oil at its Ratchaburi and Krabi generating stations, which already
has the capacity to run off fuel oil,” Sithiporn said. (TNA)
opens first community bank
Thailand edged closer to the government’s dream of
eliminating poverty within the next six years when Deputy Finance Minister
Varathep Ratanakorn opened the nation’s first community bank in the
southern province of Krabi, in what is likely to provide a blueprint for
communities across the nation.
Varathep stressed that the bank had emerged through the
cooperation of local savings groups, which had developed their operations
until they formed the nation’s first community bank.
Expressing confidence that other communities would be
able to draw on the bank for inspiration, he spoke of a new era in which the
public would be able to administer the finances of their local communities.
Varathep said, “The government is confident that the
community bank scheme will be an important driver to ensure the success of
its policies to eliminate poverty in the future. Several agencies have
discussed how local funds could be used to their maximum benefit, with the
Bank of Thailand (BOT) proposing several forms of community-managed finance
such as savings cooperatives.”
Hinting that legislation might be issued to support such
projects in the future, Varathep said that the community bank would act as a
pilot project, and an example for other villages until such legislation was
Trade war looms if EU
obstructs Thai rice imports
The government has threatened to shelve plans to purchase
European Airbus aircraft if the European Union persists in obstructing
imports of Thai rice. Speaking at a seminar to mark World Hom Mali Rice Day,
Agriculture and Cooperatives Minister Somsak Thepsuthin urged all agencies
under the auspices of the ministry to work to boost sales of Thai rice.
Revealing that the government hoped to export 7.6 million
tons of rice next year, Somsak said that the government would focus on
penetrating markets which had never previously imported Thai rice, in order
to avoid the obstacle of trade barriers. He noted that during a recent
Cabinet meeting, Prime Minister Thaksin Shinawatra had threatened that
Thailand would not purchase European Airbus aircraft if the EU put trade
barriers in the way of Thai rice imports.
Wichai Sriprasert, president of the Association of Rice
Exporters, noted, “World rice prices remain low due to technological
advancements which have served to boost rice yields. As a result, the price
of rice had drooped from US$1,600 per ton to a mere US$200 per ton over the
past 10 years. Even though Thailand is one of the world’s top rice
exporters, its rice farmers are still poor.”
Wichai said the government should work to reduce
production costs on a sustainable basis, educate farmers on correct
harvesting methods and reduce delays in exporting rice. (TNA)
‘Smart Cards’ to be in use next April
Deputy Prime Minister Gen. Chavalit Yongchaiyudh recently
announced that Thai citizens will be able to use new ‘Smart Cards’ as
their identity cards from April 2004 onwards, with the single card valid for
a range of services, including amendments to house registration documents,
bill payments, lottery purchases, and public Internet payments.
Gen. Chavalit said the Smart Card scheme remains on
schedule, with all preparatory work likely to be completed by February or
March next year, and the cards ready for use around April.
Noting that Thailand could be the first country in the
world to introduce Smart Cards, he said that in the future the cards would
also be used as border passes, as they contained a complete range of
information on cardholders.
Asked how the government proposed to prevent identity
fraud, Gen. Chavalit said that he had received assurances that a large
number of systems would be in place to protect against possible
counterfeiting. However, he conceded that counterfeiting could not be ruled
out, and said that the government would keep a close eye on the issue.
To date six agencies have asked to use the information
contained on the new cards - the Office of the Civil Service Commission
(OCSC), the Social Security Office (SSC), the National Health Insurance
Office, the Revenue Department, the Office of Agricultural Economics and the
Department of Local Administration.
A number of other agencies, including the Royal Thai
Police and the Royal Thai Army could also use the information if agreements
are worked out in time.
Gen. Chavalit hinted that the cards might also be used to
pay road tolls in the future; saying that around 100,000 multi-purpose
machines (MPMs) would be installed in various locations across the country.
By placing the cards in the MPMs, the public will be able
to perform operations, including amending house registration documents,
purchasing lottery tickets, and using public Internet services, he said,
adding that the Smart Cards might also be used for voting in the future.
The government has set aside a budget of 400-500 million
baht to administer the Smart Cards over this year and next year, a figure
which the deputy prime minister described as ‘extremely inexpensive’.
Thais lukewarm about investment in Iraq
Prime Minister Thaksin Shinawatra has reiterated the
government’s commitment to support Thai businesspeople wishing to invest
in Iraq, while conceding that no one had yet expressed any interest as the
booming Thai economy was keeping investors at home.
Speaking in response to the United States’ declaration
of Thailand as a country allowed investment in Iraq, Thaksin said that few
Thai investors were excited by the prospect of investing their money abroad
since the growing Thai economy meant that most investors were more
interested in putting their money into domestic projects.
However, he stressed that the government would offer full
support for anyone wishing to invest in Iraq, noting that Thai construction
companies now had the potential to engage in large-scale overseas
BOT brushes off concerns
about household debt levels
Bank of Thailand (BOT) Governor Pridiyathorn Devakula
recently stated that the present figures of household debt do not present a
cause for worry. He pointed out that Thailand’s overall household debt was
still lower than South Korea’s and Malaysia’s.
“Despite that, BOT will keep a close watch on firms
providing personal loans and credit cards, to ensure the country’s overall
household debt remained at a manageable level,” Pridiyathorn said.
“Currently, household debt accounts for only 54.5 percent of Thailand’s
GDP, compared with 60 percent of the GDP before the economic crisis in
1997,” he pointed out.
The BOT governor said the central bank will continue its
stringent regulations on credit cards. “If credit card issuers play by the
rules by charging lending rates of not more than 18 percent a year there
should be no problem. However, BOT will impose a penalty against firms that
flaunt the regulations,” Pridiyathorn said.
BOT’s deputy-governor Tarisa Watanagase pointed out
that Thailand’s average ratio of household debt to monthly salary remained
at 50 percent and is lower than many other Asian countries and that most of
this debt stemmed from home and car financing. (TNA)